TMI Blog2023 (8) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... il 2016. We are also in agreement with the conclusion of ld. CIT(A) that as per audited books and return of income filed by the assessee before demonetization declaration, and amount of cash withdrawals from 01.04.2016 to till demonetization period amounting to Rs. 2,63,10,000/- which was higher than the cash withdrawals during immediately preceding FY 2015-16 amounting to Rs. 55,50,000/-. Keeping in view above noted factual position which has not been controverted by the AO or by DR we are inclined to agree with the conclusion drawn by the ld. CIT(A) that the assessee has successfully demonstrated source of cash deposit to its bank account during demonetization period and hence not addition is called for. We are unable to see any ambiguity perversity or any valid reason to interfere with the findings arrived by the ld. CIT(A) and thus we uphold the same. Accordingly, grounds of revenue are dismissed. - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER For the Revenue: Shri Amit Katoch, CIT(DR) For the Assessee : Shri Akshat Jain, CA ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed against the order of CIT(A)-31, New Delhi dated 06.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial period and there was not reason to keep such huge cash in hand for the assessee. He vehemently pointed out that on the facts and in the circumstances of the case, the Ld.CIT(A) erred in law on facts, ignoring that the assessee only submitted that the impounded documents containing cash balance available at site offices maintained at the corporate headquarter for various exigencies but again the assessee did not produce any documentary evidences in order to establish its claim. It is not acceptable that such a going on concern i.e. company/flagship company does not maintain or keep record of such details of cash alongwith its purposes for each of the company sites separately. 4. The ld. Senior DR supporting the assessment order submitted that the ld. CIT(A) has also erred in ignoring glaring factual position against the assessee and granted relief to the assessee without discussing the cash in hand as per impounded documents in the first appellate order rather accepted the explanation of assessee without any verification and examination. Therefore the ld. Senior DR submitted that the impugned first appellate order may kindly be set aside by restoring that of the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, are as follows: 5.2.1. The AO has observed that cash withdrawals made by the assessee are not near the dates of cash deposits, and further that if the assessee had withdrawn cash for wage payments/ deals, it is not understandable as to why such expenses were not actually incurred. The AO has observed that the assessee company being a running concern, could not have mounted cash for so long and hence the assessee cannot be given favour in a case where the cash is withdrawn long time back. In this regard, it is important to consider the following comparative charts incorporating monthly opening cash balance, cash sales, cash withdrawals, cash deposits, cash expenses and monthly closing cash balance as per the cash books of the appellant for F.Ys. 2015-16 and 2016- 17 submitted during the appellate proceedings: 5.2.2. It is pertinent to mention here that similar comparative charts for F. Ys. 2015-16 and 2016-17 were also submitted during assessment proceedings, with supporting cash books and bank statements. At para 6.4. of the assessment order, the AO has observed that the assessee had not produced comparative charts with earlier years. However, from the assessment record I fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awals from bank accounts and cash deposits into bank accounts are also comparable for the two financial years under consideration. The cash withdrawal from bank accounts of the appellant was Rs. 55,50,000/- during F.Y. 2015-16 and the same was Rs. 2,63,10,000/-during F.Y. 2016-17. Similarly cash deposited into bank accounts was Rs. 1,00,00,000/ - during F.Y. 2015-16 as compared to cash deposit of Rs. 2,59,50,000/- (normalized to Rs. 1,25,00,000 after adiusting for the forced deposit of Rs. 1,24,50,000 due to demonetization) during F.Y. 2016-17. Therefore, the trend of cash withdrawal and deposit was similar in both the years. Infact, substantial cash withdrawals as well as deposits into the bank accounts is very much a regular feature of the business of the appellant and hence there is nothing unusual in either the cash withdrawals or the cash deposits made during the year under consideration. It is also observed that the appellant has a low or negligible level of cash receipts through sales and also a low level of cash expenses as seen from the comparative charts. In this regard, it is noteworthy that the assessee has not tried to explain the post-demonetization cash deposits by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of the view that withdrawals were spent for some other purpose, the Tribunal was right in treating the withdrawals as source of cash found. Similar is the case of the assessee where cash withdrawals from bank accounts are the source of subsequent cash deposits into such bank accounts. Further, in the case of Jaya Aggarwal, the jurisdictional Court held that where the assessee withdrew cash of Rs. 2 lakhs from bank account to buy property and re-deposited cash of Rs. 1,60,000/-from the amount withdrawn after more than 7 months as the deal could not be finalized, principle of preponderance of probability as a test is to be applied and is sufficient to discharge the onus. The case of the assessee is also similar since cash withdrawals from bank are shown as source for subsequent cash re-deposit even if made at a gap of a few months. It is therefore held that holding substantial cash balances for extended periods of time and re-deposit of such cash into bank accounts was a routine business practice of the appellant company and there was nothing unusual about the same considering the nature of the business as well as trends in the preceding year. 5.2.6. The AO has further observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant itself has not shown any meaningful or unusual cash sales in the attempt to explain the cash deposited during demonetization. Infact, the cash sales are of Rs. 2,12,410/- only for F.Y. 2016-17. Therefore, this argument does not carry any force. 5.2.8. It has also been observed by the AO that the flagship company, M/s Omaxe Ltd has surrendered a huge amount as unaccounted income, however, the assessee has not disclosed any such unaccounted income. The said observation is not rational, firstly since any disclosure made by the flagship company does not automatically translate into any acceptance of tax evasion by the appellant. Secondly, the surrender/disclosure made by the flagship company, M/s Omaxe Ltd, is on account of a totally different issue as evident from the statement of Sh. Rohtas Goel, CMD, Omaxe Ltd, the relevant portion of which is extracted below: 5.3. It is therefore evident that the cash deposited post-demonetization is duly explained by the available cash balance as on 08.11.2016, which was in turn built up by cash withdrawals from bank accounts, which are undisputed, and the opening cash balance at the beginning of the year, which is also undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or DR did not dispute above noted factual position and figures noted by the ld. CIT(A), based on audited financial statements, balance sheet and bank statements of assessee, before granting relief to the assessee. 9. We further observe that the ld. CIT(A) after considering the cash withdrawals from the banks as per bank statements and cash book noted that the same cannot be manipulated in any manner. In view of above, we are in agreement with the conclusion drawn by the ld. CIT(A) that the appellant has duly given the site cash books as well as main cash book showing cash balance of Rs. 1,24,68,418/- and the cash deposited to its bank account was created due to huge opening cash balance of Rs. 10,95,290/- as on 01.04.2016, which was enhanced to Rs. 60,02,427/- after inclusion of cash withdrawal Rs. 50,50,000/- and deduction of some expenses during April 2016. We are also in agreement with the conclusion of ld. CIT(A) that as per audited books and return of income filed by the assessee before demonetization declaration, and amount of cash withdrawals from 01.04.2016 to till demonetization period amounting to Rs. 2,63,10,000/- which was higher than the cash withdrawals during immedia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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