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TMI Blog2024 (6) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12, in respect of the proceedings u/s 143(3) and proceedings u/s 271AAA respectively. So far as the appeal in respect of the proceedings u/s 271AAA is concerned the same is consequential, hence we proceed to decide the main appeal that is in respect of the proceedings of 143(3) of the Income Tax Act( hereinafter referred to as Act). 2. The assessee is a salaried employee working under Karnataka Forest Department, searched by Income-tax department on 25/10/2010 (relevant to AY 2011-12). Thereafter, the case of the impugned assessment year, being searched year, was selected for scrutiny u/s 143(3). During the course of assessment proceedings, the AO observed that during the course of search, cash of Rs. 4,06,700/- was found from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, drawn the attention of the bench towards bank statements and annexed paper book page 11. 6. The ld. DR relied upon the order of the authorities below and contended that the cash was withdrawn by the assessee in the financial year 2009-10. However, the impugned year is financial year 2010-11 relevant to the assessment year 2011-12. 7. We have heard the rival contentions of both the parties and perused the materials available on record. On perusal of the bank statement filed by the assessee, (annexed in Paper Book at Page 11). We find that approximately Rs 4,85,000/- have been withdrawals by the assessee starting from December 2009 to May 2010, which means when the last financial year i.e. 2009-10 relevant to AY 2010-11 was abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawal of the amount from the bank account and re-deposit of the same in the loan account. Secondly, on the ground that, it is risky to keep large amount of cash on hand. Thirdly, they are of the view that the explanation offered Such as having borrowed a gold loan, yet another loan of Rs. 2,00,000/- and sale of paddy are not established by proper evidence." It is in this context, it is useful to refer to a judgment of this Court in the case of S.R VENKATARATNAM Vs. COMMISSIONER OF INCOME-TAX, KARNATAKA-1 AND ANOHTER reported in ITR (127) 1981 Page 807. where a learned Single. Judge held as under: "Once the petitioner assessee disclosed the ,,tire° as having; come from the withdrawal made on a given, cite from a given bank, it was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Once money is shown to be in the account and withdrawn what the assessee did with that money till it was actually deposited, is not the concern of the Department. As long as the source is explained and established and when the money is withdrawn from a savings bank account and paid to discharge loan by deposit into a loan account, it is not possible to hold that the source is not explained. In that interregnum period, if the very same money is utilized for other purpose and thereafter, it is appropriated towards discharge of a loan that cannot be held against the assessee. In that view of the matter, the finding recorded by the Tribunal is erroneous and requires to be set aside. Therefore, the said substantial question of law is also hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier financial year 2015-16 & 2016-17, it is not possible to hold that the said amount is not available to assessee to redeposit into bank account. Considering the quantum of withdrawals made by the assessee in earlier financial years, I am of the opinion that the amount of Rs. 3.96 lakhs addition sustained by the AO has been sourced by the earlier withdrawals and due credit to be given. Accordingly, considering the meagre amount of Rs. 3.96 lakhs, which addition is made by the AO, the amount withdrawn by assessee on earlier occasion has been unutilized and available to the assessee to redeposit to the bank account and according to me the source has been explained by the assessee by earlier withdrawals and the addition sustained by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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