TMI Blog2023 (8) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... ch withdrawn amount may have spent by the assessee for some other purpose without any adverse positive material showing such facts. Hon ble jurisdictional High Court held that in absence of any material in support of the view that withdrawals were spent for some other purpose, the conclusion of Tribunal has to be held has right in treating the cash withdrawals from the bank as source of cash found. Thus, as we have noted above, the AO has ignored main cash book while disputing the source of cash and making addition and the ld. CIT(A) considered entire facts and circumstances in the right prospective, no valid reason to interfere with the findings arrived by the ld. CIT(A) - Decided against revenue. - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER For the Revenue: Shri Paresh Johri, CIT(DR) For the Assessee : Shri Akshat Jain, CA Shri Rajat Jain, CA ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed against the order of CIT(A)-30, New Delhi dated 31.10.2022 for A.Y. 2017-18. 2. The grounds raised by the revenue are as under:- i) Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is right in deleting addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Replying to the above, the ld. AR submitted that the AO made addition on the basis of his own whims and fancies without any relevant and reliable positive material against the assessee and the ld. CIT(A) after appreciating the entire facts and circumstances of the case deleted the baseless addition therefore the first appellate order may kindly be upheld. Further drawing our attention towards conclusion of ld. CIT(A) in paras 9.2 to 9.12 of first appellate order the ld. AR submitted that the assessee successfully demonstrated that the cash deposited post demonetization period was duly explained with the available cash balance on 8.11.2016 which was created due to earlier cash withdrawals from banks accounts and keeping in view such undisputed facts and the opening cash balance available with the assessee in the beginning of the year the amount of cash deposit was tallied with the cash balance as on 31.03.2016 which was brought as opening balance on 01.04.2016 as per audited financial statements signed on 21.05.2016 i.e. prior to demonetization period therefore the ld. CIT(A) was right in deleting the addition. The ld. AR submitted that appeal of revenue may kindly be dismissed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or complete financial years 2015-16 and 2016-17, it is observed that the appellant usually maintains a hish cash balance in the books of account. This is evident from the opening cash balance of Rs. 70,18,114/ - as on 01.04.2015, which is also corroborated by the cash balance as on 31.03.2015 as per the IT and audit report for A.Y. 2015-16, which was filed much before demonetization and is therefore not a subject matter of manipulation. 9.6 It is also observed from the chart for F.Y. 2016-17 that the opening cash balance as on 01.04.2016 was of Rs.4,34,574/- that is verifiable from the audited balance sheet for the F.Y. 2015-16 signed on21.05.2016. It is also noted that the appellant company is subsidiary of M/s Omaxe Ltd which is listed on BSE and NSE. The consolidated financial statements of M/s Omaxe Ltd were signed on 24.05.2016 for A.Y.2016-17 and filed with BSE and NSE on 24.05.2016, therefore was not subject to manipulation. The cash balance as on 01.04.2016, has been further increased to higher level by way of bank withdrawals which can also not be manipulated. The cash balance has been maintained at a higher level for the remaining F.Y. upto the date of demonetization, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emarked in a generalized manner that cash is normally withdrawn for immediate expenses such as wage payments, which have not been shown by the appellant. The said observation is not well-founded since substantial amount of cash expenses have been shown by the appellant and more importantly the A has not established that wage payments or any other expenses of meaningfully higher magnitude were being made in cash earlier and have now not been shown. Such generalized allegations without marshaling appropriate facts are not proper. It is thus seen that there was no unusual trend in cash withdrawals, cash deposits, cash sales, cash expenses and level of cash balances during the year under consideration as compared to the preceding year. The AO's observation that the assessee company being a running concern, could not have mounted cash for so long, amounts to mere surmises since the fact of maintenance of high cash balances across extended period of several months is duly established from the ITs and audit reports as well as cash withdrawals of the appellant from its bank accounts, both of which are a matter of record and are not subiect to manipulation. It is an established principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rby cash withdrawals can be shown as cash deposited during demonetization. In this regard, it is a matter of fact that the. bank withdrawals or deposits are reflected in the bank accounts statements as well as cash book and cannot be manipulated in any manner. The appellant has duly given the site cash books as well as main cash book whose total cash balance as on 08.11.2016 is Rs.2,07,23,542/-. The said cash balance has mostly been 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 undisputed since the same tallies with the cash balance as on 31.03.2016 as per the IT for AY. 2016-17. The AO has ignored the main cash book of the assessee and has considered only the site cash books in arriving at the figure of cash balance as on 08.11.2016. The appellant has stated that the existence of the main cash book cannot be denied since most of the bank transactions, whether deposits or withdrawals, have been routed through the main cash book, which is the reason why the main cash book has the bulk of cash balance. It is further submitted by the appellant that cash in hand as on 01.04.2016 as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the addition of Rs.2,00,00,000/- on account of unexplained cash deposited during demonetization, is untenable and is accordingly deleted. Ground nos.1 to 3 are allowed. 6. On careful consideration of basis taken by the AO for making addition and conclusion drawn by the ld. CIT(A) in favour of the assessee deleting the addition we note that before us. It is not the case of the AO that the assessee did not file details and documentary evidence before him and the same was filed before the ld. CIT(A) which was relied by him while granting relief to the assessee. Thus, we safely presume that entire evidence which was before the ld. CIT(A) was also produced before the AO during assessment proceedings. After observing said factual position of proceedings before the authorities below when we evaluate the impugned first appellate order then we find that the ld. CIT(A) firstly gathered from the audited financial statement of assessee that at the beginning of the financial period opening cash balance was Rs. 4,34,574/- as on 01.04.2016. He, based on copies of bank statements and cash books of assessee, further noted that the cash balance was further increase to higher level by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose, the conclusion of Tribunal has to be held has right in treating the cash withdrawals from the bank as source of cash found. In the present case said preposition rendered by the Hon ble High Court of Delhi supports the conclusion of ld. CIT(A) that the source of cash deposited during demonetization period by the assessee was opening cash balance and cash withdrawals during pre demonetization period which are higher than the amount of cash deposited by the assessee. As we have noted above, the AO has ignored main cash book while disputing the source of cash and making addition and the ld. CIT(A) considered entire facts and circumstances in the right prospective and thereafter considering the totality of facts and circumstances and prepositions rendered by Hon ble jurisdictional High Court of Delhi (supra) granted relief to the assessee. Thus, we are unable to see any ambiguity perversity or any valid reason to interfere with the findings arrived by the ld. CIT(A) and hence we uphold the same. Accordingly, grounds of revenue being devoid of merits are dismissed. 9. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 18.08.2023. - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
