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TMI Blog2024 (9) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case in making an addition of Rs. 1325000.00/- on account of unexplained money deposited during the demonetization period by way introduction of capital through partners within the meaning of Section 69A r.w.s. 115BBE of the Income Tax Act, 1961 and ld Commissioner of Income-Tax (Appeals)-IV has erred in sustaining a sum of Rupees 1225000.00 out of the same. 2.1 Both the grounds raised by the appellant are interconnected and interrelated and relates to challenging the order of ld. CIT(A) in confirming and sustaining the addition made by the AO on account of unexplained money deposited during the demonetisation period. Therefore the Bench has decided to dispose off these Grounds through the present common order The Bench has heard the Counsel for both the parties and have also perused the material/documents placed on record, judgements cited by the respective parties as well as orders passed by the revenue authorities. From the records, the Bench noticed that the assessee filed the return of income declaring Nil and Agriculture Income of Rs. 16,25,700/-. During the year under consideration, the following five partners of the assessee introduced capital on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on the decision of Vivek & Jajodiya Vs. ITO (2010) 123 ITR 136 for preponderance of probability, decision of Hon'ble Supreme Court in case of Sreelekha Banerjee Vs. CIT (1963) 49 ITR 112, Madras High Court in case of Durai Murugan Kathir Anand Vs. Addl. CIT (2022) 443 ITR 423 to hold that onus is on the assessee to prove that funds deposited in his bank account are from the sources from which it is being claimed but assessee has not discharged the onus of showing the genuineness of transaction and identity of the transaction. vi. AO is not required to show the source of money deposited in the bank account. The explanation of the assessee is to be seen in totality and as a whole. The claim of assessee is not supported by preponderance of probability in its favour. The cash flow statement of three partners does not show the true picture and are not reliable. 2.3 During the course of hearing, the ld.AR of the assessee filed a written submission praying therein to delete the addition confirmed by the ld.CIT(A). 2.4 On the other hand, the ld. DR supported the order of the ld.CIT(A). 2.5 After having minutely going through the facts of the case I noticed that the AO made the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition was made u/s 69. The Tribunal, however, held that even though the explanation about the nature and sources of the purchase money was not satisfactory but in the facts and circumstances of the case it was not possible for the assessee to earn the amount invested in the properties and that by no stretch of imagination could the assessee be credited with having earned this income in the course of the assessment year or was even in a position to earn it for a decade or more. The Tribunal took the view that although the explanation of the assessee was liable to be rejected, s. 69 of the Act conferred only a discretion on the ITO to deal with the investment as income of the assessee and that it did not make it mandatory on his part to deal with the investment as income of the assessee as soon as the latter's explanation happened to be rejected. According to the High Court, the Tribunal had not committed any error in taking into account the complete absence of resources of the assessee and also the fact that having regard to her age and the circumstances in which she was placed she could not be credited with having made any income of her own and in these circumstances the Tribunal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee without bringing on record an iota of evidence. Even otherwise to my mind, there is no bar that if earlier partners have not contributed capital in cash they cannot contribute the capital subsequently in cash. The Peculiar urgency cannot be a reason to doubt the capital contributed by the partners in cash and an important fact which skipped from the attention of the revenue authorities that all the five partners who introduced the capital are regularly assessed to tax. In case of Sh. Niranjan Lal Data, Sh. Saurabh Data and Sh. Vijay Data cash flow statement is submitted. The same is backed by availability of opening cash in hand disclosed in the income tax return and their bank statement (Pg 4-32 of Paper Book filed with appeal papers). No discrepancy has been found in such cash flow statement except pointing out variation in the household withdrawals in different years. It may be noted that such withdrawal has been accepted in the hands of these persons in the assessment framed u/s 153A of the Act. Thus the capital contribution by these 3 partners is verifiable from their cash flow statement. In any case when all the 5 partners have accepted the capital contributi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k interest and also earning rent from property as Karta of HUF. He had deposited cash of Rs. 63.63 lakhs in his bank account during demonetization. Assessee explained that he was in the habit of withdrawing the money and keeping in the form of cash at home and amount was deposited out of withdrawals from the same account from time to time made during the years 2014, 2015 and 2016, because of his serious illness and old age. AO however disbelieved assessee and made additions to income of assessee. CIT(A) gave part and restricted the addition to Rs. 44.13 lakhs after holding that cash withdrawn from account from 1st April, 2016 to 9th Nov., 2016 for sums aggregating to Rs. 19.50 lakhs can be held to be out of money withdrawn from the bank account which was deposited after demonetization. It was held that assessee had no source of income apart from rental or pension income and some interest amount and same income earned regularly has been withdrawn regularly leaving very less cash in the bank account and even after household withdrawal there was a huge amount available with assessee in form of cash. In absence of any adverse material, it cannot be presumed that cash deposited by asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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