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Income Tax Officer Ward 1 (2) , Meerut Versus Mrs. Deepali Sehgal

2014 (9) TMI 1073 - ITAT DELHI

Unexplained cash deposits in the Saving Bank - Held that:- AO in his remand report could not bring out any fact that the cash withdrawn from Saving Bank Account and partnership overdraft account was used for other purpose anywhere else then, merely because there was a time gap between withdrawal of cash and its further deposit to the bank account, the amount can not be treated as income from undisclosed sources u/s 69 of the Act in the hands of the assessee.AO rejected the explanation of the ass .....

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nd it deposit to same bank account after a substantial gap of time, as unexplained income u/s 69 A of the Act. Hence, we reach to a conclusion that the AO made addition without any legal and justified reason which was rightly deleted by the CIT(A). - Decided in favour of assessee - I.T.A .No.-5660/Del/2012 - Dated:- 5-9-2014 - SHRI G. D. AGRAWAL, HON BLE VICE-PRESIDENT AND SHRI C. M. GARG, HON BLE JUDICIAL MEMBER Revenue by:-Smt. Ashima Neb, Sr. DR Assessee by:-Sh. Rama Kant Jain, CA. ORDER PER .....

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ithdrawn form partnership firm which itself withdrew the cash from its bank ale out of business OD account with Corporation Bank where debit balance remained in the range of 57 lac to 64 lac on whch heavy interest was paid by the firm and thus the alleged withdrawals by the partner did not relate to firm's business in any way. 2. Whether in the facts and circumstances of the case the Ld. CIT(A) has erred in law in holding hat there was no negative cash balance and that there is no law of lan .....

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ITR 801 (SC) ii) Durga Prasad Morya Vs CIT 82 ITR 540 (1971) 3. That the appellant craves leave to add, modify and / or delete any ground(s) of appeal. . 4. In the facts and circumstances of the case, the order of the Commissioner of Income-tax(Appeals) may be set aside and that of the A.O restored. 2. Briefly stated the facts giving rise to this appeal are that the Assessing Officer (AO) noted that the assessee has withdrawn huge cash from bank account and the same amount has been deposited to .....

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sessee from undisclosed sources and the AO made an addition of ₹ 24,38,000/- u/s 69 of the Income Tax Act, 1961 (for short the Act) for A.Y. 2009-10. 3. The aggrieved assessee preferred an appeal before CIT(A) which was allowed by passing the impugned order. Now the aggrieved Revenue is before this Tribunal with the grounds as reproduced herein above. Ground No. 1 & 2 of the Revenue 4 Apropos these grounds we have heard arguments of both the sides and carefully perused the relevant mat .....

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r assessee did not relate to firms business in any manner. The D.R. further contended that the CIT(A) also ignored the fact that the Capital account of the assessee in the firm always remained in negative before impugned withdrawals as well as during and after such withdrawals and also the withdrawals made by the firm from overdraft was increasing heavy debit balance resulting into heavy interest liability on the firm which is not in accordance with behavior of a man of ordinary prudence rather .....

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ccount creating interest liability against the partnership firm and the AO rejected the explanation of the assessee deeming the same to be impractical and illogical but the cash flow statement clearly show that the assessee withdrew cash of ₹ 19 lacs and 13 lacs from her saving bank account with HDFC Bank and from capital account of partnership firm M/s Shakti Traders, Meerut, respectively but this fact was not appreciated by the AO and the CIT(A) was quite justified in accepting the expla .....

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deration of above submissions and contention we observe that the AO made addition u/s 69A of the Act with following conclusion: From the perusal of return and the various documents submitted by the assessee during the course of assessment proceedings, it is gathered the assessee has made huge cash deposits in saving bank a/c bearing no.0285130002853 at HDFC Bank, W.K. Road, Meerut. The cash flow statement submitted by the assessee has many lacunae. From the said cash flow statement, it is gather .....

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- withdrawn on 3/10/2008 and deposited on 4/3/09. 2. no reason has been offered by the assessee in respect of cash deposits of ₹ 5,00,000/- made on 16/3/2009; ₹ 8,00,000/- made on 25/3/2009 and ₹ 3,38,000/- made on 26/3/2009. I, therefore, treat this above-mentioned cash deposit of ₹ 24,38,000/- as Unexplained money u/s 69A of the I.T. Act, 1961, since the assessee has been found to be the owner of this money and has not offered any explanation about the nature and source .....

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red the facts of the case, AR's submissions, AO's remand report, AR s rejoinder and further submissions of the AR carefully. The only reason harped on the AO for the addition is that it was hard to believe by her that cash was kept by the assessee for deposit back in the bank. She has noted that the explanation offered by the assessee appeared to be impractical and illogical. The AR has placed on record the cash flow statement both during the assessment proceedings as well as the appella .....

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fferent dates. There is no negative cash balance at any point of time. It is not the case of the AO that the amounts withdrawn were utilized anywhere else. The AR has also placed on record the audit report of M/s. Shakti Traders along with the ledger account of the appellant. In view of material placed on record, no adverse inference can be drawn against the appellant for explanation that.cash withdrawn from the bank and the capital account of her partnership firm was deposited in bank. It is no .....

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