Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2018 (2) TMI 596

bank account. Particularly when, the AO himself accepted the deposits of ₹ 15,20,900/- in various bank accounts out of the said cash in hand available with the assessee, so there was no occasion to doubt the deposits of ₹ 26,55,000/- out of the cash in hand amounting to ₹ 49,30,572/- available with the assessee as on 01.04.2010. Therefore, considering the totality of the facts, delete the addition made by the AO and sustained by the CIT(A). - Decided in favour of assessee. - ITA No. 1439/Del/2017 - Dated:- 6-2-2018 - Sh. N. K. Saini, Accountant Member For The Assessee : Sh. Gautam Jain, Adv. And Sh. Piyush Kumar Kamal, Adv. For The Revenue : Ms. Ashima Neb, Sr. DR ORDER This is an appeal by the assessee against the order dated 21.02.2017 of ld. CIT(A)-11, New Delhi. 2. Following grounds have been raised in this appeal: 1. The learned AO as well as the CIT(A) have erred on facts as well as in law in sustaining the addition of ₹ 26,55,000/- even though the same is supported by cash flow statement and Balance sheet of which the Hon ble Delhi High Court has taken the cognizance. 2. The learned AO as well as the CIT(A) have proceeded on surmises and have not take .....

X X X X X X X

Full Text of the Document

X X X X X X X

able properties. The AO again asked the assessee to furnish the source of cash reflected in cash book as opening balance and also to furnish tax audit report of any of the previous year, justifying the cash in cash book. In response, the assessee furnished the cash books for the assessment years 2008-09 to 2011-12 and also furnished final account of the proprietorship of the firm namely, M/s Trade India for the period from 01.04.2008 to 31.03.2010. The cash position of the assessee emerged as under: Sr. No. AY Cash in hand Total Cash in hand Individual capacity Prop. Firm 1 2008-09 (as on 3 1.03.2008) 46,03,075/- 797842/- ₹ 54,00,917/- 2 2009-10 (as on 3 1.03.2009) 53,48,524/- 1397198/- ₹ 67,45,722/- 3 2010-11 (as on 31.03 .2010) 49,62,269/- 31697/- ₹ 49,62,269/- 6. The AO asked the assessee to provide the copy of Wealth Tax Returns for the assessment years 2008-09 to 2010-11 showing cash in hand and payment of Wealth Tax thereto. The AO observed that the assessee failed to file the Wealth Tax Returns for the above mentioned assessment years and that no assessment was framed u/s 143(3) of the Act prior to this year, thus, the assessee failed to provide satisfactor .....

X X X X X X X

Full Text of the Document

X X X X X X X

36. i) It is, therefore, prayed that the above addition made by the Learned A.O. may kindly be deleted." 8. It was further submitted that the assessee was not having any business during the year under consideration as no order for work was received by him. It was stated that the assessee was preparing balance sheet on regular basis but the same was not filed with the return of income and that the cash deposits had been made out of the brought forward cash in hand which was reflected in the balance sheet of the assessee. The reliance was placed on the judgment of the Hon ble Delhi High Court in the case of CIT Vs Kulwant Rai reported at (2007) 291 ITR 36. 9. The ld. CIT(A) after considering the submissions of the assessee observed that the assessee had made the deposits on 14 different dates from April 2010 to March 2011 and the amounts deposited vary from ₹ 10,000/- to ₹ 5,00,000/- and that the total amount deposited in two bank accounts was ₹ 26,55,000/-. The ld. CIT(A) further observed that the assessee was not having any regular source of income although he was engaged in the business under the name of M/s Trade India and the returns filed by the assessee .....

X X X X X X X

Full Text of the Document

X X X X X X X

ision making could be done based on the surrounding circumstances and by applying the test of human probabilities. The ld. CIT(A) confirmed the addition made by the AO by observing in paras 4.2.6 to 4.2.10 as under: 4.2.6 In the present case, the circumstances enumerated above relating to the regular use of various bank accounts by the appellant clearly establish that the appellant does not have any reason to keep large amounts of cash in hand. Moreover, the frequent cash withdrawals through ATM in the light of claim of huge cash availability does not accord with human probabilities. Further, the appellant has failed miserably to discharge his onus to prove the genuineness of his claims. The balance sheets and the cash books etc. produced by the appellant are nothing but self serving documents. From this, it is quite apparent that the cash deposits in the bank accounts have been made from the income earned by the appellant from undisclosed sources. 4.2.7 The test of human probabilities and surrounding circumstances when applied to the conduct of the appellant wherein he is seen to be withdrawing meager amounts of ₹ 500 - ₹ 10000/- at regular intervals through ATM also e .....

X X X X X X X

Full Text of the Document

X X X X X X X

st-worthy, even if the department does not lead any evidence on such an issue. 4.2.9 In addition to the 'reasonableness' factor as quoted by the P & H High Court in the supra, there is also the 'rationale thinking' factor which helps in applying this test of human probabilities. In the present case, all the surrounding circumstances discussed in detail above lead me to believe that the appellant has failed to prove satisfactorily the source of cash deposits in the bank accounts. 4.2.10 Therefore, based upon all the facts, the surrounding circumstances and the test of human probabilities along with the legal position as discussed above, 1 am of the opinion that the source of the cash deposits in the bank accounts of the appellant remains unexplained and hence, the addition made by the AO treating the same as income from undisclosed sources is hereby confirmed and the ground of appeal is dismissed. 10. The reliance was also placed on the following case laws: * Smt. Shelly Passi, Kudhiana Vs Assessee (2012) ITAT Chandigarh in ITA No. 1151/Chd./2011 *Ram Lubhaya Vs ACIT 52 TTJ 21 (ITAT Del.) * Sumati Dayal Vs CIT 214 ITR 801 (SC) * CIT Vs Durga Prasad More (1971) 82 .....

X X X X X X X

Full Text of the Document

X X X X X X X

lowing case laws: * Union of India Vs British India Corporation 268 ITR 481 (SC) * CIT Vs Jayantkumar Motichand Doshi 217 Taxmann 247 (Guj.) * CIT Vs Mohan Lal Agarwal 217 Taxman 29 (All) * CIT Vs Illaben Jayant Kumar Doshi, ITA No. 564/2012 (Guj.) 15. As regards to the cases relied by the ld. CIT(A), the ld. Counsel for the assessee submitted that facts of those cases were distinguishable from the facts of the assessee s case. It was also stated that the source of cash deposits by the assessee were withdrawals from the banks and there was income declared in the shape of sales in the business of M/s Trade India, year after year and there was also sale of properties in the earlier years. 16. In her rival submission, the ld. Sr. DR reiterated the observations made by the authorities below and further submitted that the assessee could not explain the reason for depositing the amount throughout the year when he was having six bank accounts and there was no regular income available to the assessee. Therefore, the addition made by the AO and sustained by the ld. CIT(A) was fully justified. Reliance was placed on the judgment of the Hon ble Punjab & Haryana High Court in the case of K .....

X X X X X X X

Full Text of the Document

X X X X X X X

been spent. As per the cash book maintained by the assessee, a sum of ₹ 10,000 was being spent for household expenses every month and the assessee has withdrawn from bank a sum of ₹ 2 lakhs on December 4, 2000 and there was no material with the Department that this money was not available with the assessee. It has been held by the Tribunal that in the instant case the withdrawals shown by the assessee are far in excess of the cash found during the course of search proceedings. No material has been relied upon by the Assessing Officer or the Commissioner of Income-tax (Appeals) to support their view that the entire cash withdrawals must have been spent by the assessee and accordingly, the Tribunal rightly held that the assessment of ₹ 2.5 lakhs is legally not sustainable under section 158BC of the Act and the same was rightly ordered to be deleted. 19. In the present case also, the AO has not brought on record that the cash in hand available with the assessee was not utilized for depositing in the various bank account. Particularly when, the AO himself accepted the deposits of ₹ 15,20,900/- in various bank accounts out of the said cash in hand available with .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||