TMI Blog2023 (11) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... rties, then in the backdrop of the aforesaid factual position the availability of the said funds as cash in hand with her during the year for making cash deposit in her bank account did not merit acceptance. It is incomprehensible that the amount of Rs. 21.60 lacs (supra) withdrawn by the assessee in the period relevant to A.Y.2015-16 would have been exploited by giving the same as short-term interest-bearing advances to third parties and, at the same time, be available with her for sourcing the cash deposits in her bank account. Assessee had neither in the course of the assessment proceedings nor before the CIT(Appeals) or in the course of proceedings before me, placed on record the cash flow statement a/w. documentary evidence, which would establish that the short-term interest-bearing advances that she had given in the preceding year to third parties out of her cash withdrawals of Rs. 21.60 lac (supra) made from her bank account in the year 2014 were received back and lying available with her to, inter alia, source the cash deposit of Rs. 23 lac (supra) on 01.12.2016 in her bank account during the year under consideration. The legal heir of the assessee had failed to disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the Circumstances of the case the learned CIT(A) erred in holding that cash in hand on 31.03.2015 has not been reflected in return for the A.Y. 2015-16 ignoring the fact that the return in form No. 1 applicable and filed by the appellant does not have any column to disclose cash in hand while the Balance Sheet required and filed during assessment proceedings duly shows available cash in hand amounting to Rs. 21,60,301/- on 31.03.2015. 6. On the facts and in the Circumstances of the case the learned AO as well as CIT(A) erred in not accepting availability of cash in hand duly shown in return form No.4S for the A.Y. 2016-17 filed by the assessee, which required to disclose the assets and liabilities, on the ground that return has been filed on 02.12.2016 i.e. one day after cash deposited in Bank. 7. On the facts and in the Circumstances of the case the learned AO as well as CIT (A) erred in objecting that the part of interest income shown as business income and another part of interest income shown as income from other sources, while the interest income estimated and shown at Rs. 3,00,000/- earned on advancing money to various persons was very much income earne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.03.2016 in her return of income for A.Y. 2016-17 that was filed on 02.12.2016, i.e., during the demonetization period after the cash deposit of Rs. 23 lac (supra) in old currency notes was made by her during the year under consideration. Again, the A.O. called for the assessee to justify the factual position. Also, it was observed by the A.O that during the A.Y. 2015-16 and A.Y. 2017-18, the assessee had filed her return of income in ITR-1(SAHAJ) wherein she had in the said respective returns of income disclosed the interest income under the head income from other sources but had during the demonetization period filed her return of income for A.Y. 2016-17 in ITR-4S (SUGAM), wherein apart from having income from other sources she had, disclosed business income. The A.O. called upon the assessee to furnish the nature and details of the business activity she had carried out during A.Y. 2016-17. In response, the assessee submitted that she had given amounts kept as cash in hand to various persons at interest for a short period, and the interest income earned on the same was shown as business income, while the interest income that was earned on the amount that was given to M/s Manga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome, and was in receipt of interest income on bank deposits and deposit with M/s Mangal Tyres (supra). The A.O further observed that the assessee has not clarified that in her return of income for the A.Y. 2016-17, why the interest income received from M/s Mangal Tyres (supra) was not treated as business income whereas interest received on the amounts advanced to various person was treated as business income. The A.O. observed that the assessee had also not furnished the list of the various persons to whom the money was given and interest income was earned. Also, on perusal of the return of income filed by the assessee for the last ten years, it is observed by the A.O. that the assessee had never filed the return of income disclosing any business income, and was only in receipt of interest income during all the years. The A.O also observed that only in the return of income for A.Y. 2016-17, which the assessee had filed during the demonetization period, i.e., on 02.12.2016 after cash was deposited by her in her bank account in old currency notes on 01.12.2016, that the assessee had shown the business income by giving a differential treatment to the interest income. The A.O further o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the FY 2014-15 which again has been deposited during the demonetization period amounting to Rs. 23,00,000/- It is further stated that this amount has been shown as cash on hand ending 31.03.2016 in her return of income. However, the explanation of the appellant has been rejected by the AO stating that no reason has been provided as to why the said cash has been kept with the appellant for about 32 months. It is further stated by the AO that appellant had deposited cash in her bank account during the demonetization period on 01.12.2016 whereas the return of income for the AY 2016-17 was filed on 02.12.2016 one day after deposited cash in the bank. Therefore, the submission of the appellant with regard to disclosing cash on hand as on 31.03.2016 has not been accepted by the AO considering it as on after thought action on the part of the appellant. Before me, appellant has submitted same submissions as had been made before the AO. In this regard, AO had given opportunities of being heard and in response appellant had also submitted explanations to the queries raised by the AO. On perusal of the assessment order I have noticed that AO has considered the evidence and explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on 31.03.2015 was duly disclosed. The Ld. A.R. further submitted that as for A.Y 2016-17, considering the streams of income of the assessee, the latter was required to file her return of income in Form 4S , wherein there was an innate requirement to disclose the assets and liabilities; therefore, the assessee had while filing her return of income for the said preceding year complied with the statutory requirement and disclosed the amount of cash in hand that was available with her on 31.03.2016. The Ld. A.R further submitted that the assessee had rightly shown part of the interest income that was received by her from the business of money lending under the head business income while for that earned on her deposit with M/s Mangal Tyres (supra) under the head income from other sources. The Ld. AR, in support of his aforesaid contention, had relied on the following judicial pronouncements: 9. Per contra, the Ld. Departmental Representative (for short, DR ) relied on the orders of the lower authorities. 10. I have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces to third parties and, at the same time, be available with her for sourcing the cash deposits in her bank account. A heavy onus was cast upon the assessee to establish the availability of an amount of Rs. 23 lac on the date on which the same was claimed to have been redeposited, i.e., on 01.12.2016. I do not say that no part of the funds sourced out of the aforesaid cash withdrawals by the assessee from her bank account in A.Y.2015-16 would have been available with her on 01.12.2016 (supra), but in the absence of the requisite details, which would evidence that the interest-bearing short term advances on which she had garnered interest income of Rs. 3 lacs in the immediately preceding year, were liquidated and available with her as cash in hand on the date of deposit, i.e., on 01.12.2016, the aforesaid claim of the assessee cannot be summarily accepted on the very face of it. 12. At this stage, I may herein observe that the assessee had neither in the course of the assessment proceedings nor before the CIT(Appeals) or in the course of proceedings before me, placed on record the cash flow statement a/w. documentary evidence, which would establish that the short-term interest- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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