TMI Blog2024 (2) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed. The judicial view in such circumstances has consistently been that where the cash deposits is explained out of cash withdrawals and there is no case of the Revenue of the cash withdrawn as having been utilized elsewhere, there is no reason for doubting the explanation of the assessee. It is not the case of the ld. PCIT that the cash withdrawn has been utilized elsewhere. Therefore, the acceptance of the explanation offered by the assessee to the Assessing Officer cannot be faulted or for that matter doubted. Onus of explaining the source of cash deposits was not discharged by the assessee - We are not in agreement with the same. The ld. PCIT has himself noted the deposits to have been made by banking channels. There arises, therefore, no question of any doubt regarding their sources which is through transparent sources only. Even otherwise, we failed to understand how the source of these deposits would in any way affect the genuineness of their withdrawals and subsequent re-deposits. Neither has the ld. PCIT demonstrated as to how the source of these deposits effect the genuineness of the subsequent deposits. Therefore, we are not in agreement with this finding of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by observing that proper inquiry for cash deposit was not made ignoring fact that the one of the reasons for selection of case into scrutiny was cash deposit and order was passed after adequate inquiry 5. Ld. PCIT erred in observing that AO passed an order without making any enquiry ignoring notices u/s 142(1) of the Act and it's replied by appellant. 6. Ld. PCIT erred in law and on facts in invoking revision jurisdiction ignoring fact that Assessment Order is merged with CIT(A) and accordingly revision is not permissible as per principle of merger. 3. A perusal of the ld. PCIT s order reveals that the revisionary powers were exercised by the ld. PCIT finding the assessment order erroneous on account of the cash deposits of Rs. 30 lakhs in the bank account of the assessee not having been examined by the Assessing Officer with respect to its source. 4. The facts of the case are that during the impugned year the assessee has made cash deposits to the tune of Rs. 52 lakhs odd, of which Rs. 30 lakhs was deposited in the bank account prior to demonetization of specified bank notes declared by the government and Rs. 22 lakhs deposited during demonetization period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the assessee had furnished an explanation regarding the source of cash deposit of Rs. 30 lakhs as being out of opening cash balance and out of cash withdrawals made in the month of April and May 2016, evidenced with necessary documentary evidences. The relevant paragraph No.5 of the order of the ld. PCIT noting the aforesaid facts is as under:- 5. Submission filed by the assessee alongwith the evidences/details viz. Cash Book copy, copy of Bank Statement etc. have been duly considered and details available on assessment records have been thoroughly verified. Issue in this case is very limited i.e whether source of cash deposit of Rs. 30,00,000/- made in Bank A/c. on 27.05.2016 was explained or not. The assessee has basically tried to explain the source as (i) out of Opening Cash Balance and (ii) out of cash withdrawals made in the months of April May, 2016. It is true that during the assessment proceedings, the then AO raised query and issued a Show Cause Notice dated 09.12.2019 asking the assessee as to why cash deposits (including Rs. 30 Lacs) should not be treated as unexplained in absence of genuine explanation supported by documentary evidence but this remaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 95,109/-) and cash withdrawals made in months of April and May on various dates. In view of the above, explanation furnished by the assessee is not found acceptable, hence, rejected. The assessee has argued that this issue was examined by erstwhile Assessing Officer and she being satisfied, no addition was made on this count, but there is no whisper in the assessment order to accept this contention. So presumption of the assessee is based on conjuncture and surmises Neither the then AO has left any notings or Office Note to draw an inference that addition of Rs. 30 Lacs was not made by AO after proper application of mind. On face of it, one can draw a conclusion that inadvertently she failed to make addition although she was not satisfied with the explanation of the assessee because common explanation was furnished by the assessee for cash deposit of Rs. 22,00,000/- (during monetization period) which was treated unexplained and addition was made but the AO fail to take action with regard to cash deposit of Rs. 30,00,000/- (made during non-demonetization period). Most importantly the assessee has failed to discharge his onus to satisfactorily explain the source of cash deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, there is no reason for doubting the explanation of the assessee. It is not the case of the ld. PCIT that the cash withdrawn has been utilized elsewhere. Therefore, the acceptance of the explanation offered by the assessee to the Assessing Officer cannot be faulted or for that matter doubted. 11. Now, coming to the point made by the ld. PCIT that since the assessee had not explained the source of deposits in the bank which were subsequently withdrawn in cash and redeposited, the onus of explaining the source of cash deposits was not discharged by the assessee - we are not in agreement with the same. The ld. PCIT has himself noted the deposits to have been made by banking channels. There arises, therefore, no question of any doubt regarding their sources which is through transparent sources only. Even otherwise, we failed to understand how the source of these deposits would in any way affect the genuineness of their withdrawals and subsequent re-deposits. Neither has the ld. PCIT demonstrated as to how the source of these deposits effect the genuineness of the subsequent deposits. Therefore, we are not in agreement with this finding of the ld. PCIT. 12. Coming to the other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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