ABDULLA MOHAMED YUSUF PATEL,MUMBAI V. NFAC, DELHI

ITA 3133/MUM/2024

AI Insights

The case involves appeals by Abdulla Mohamed Yusuf Patel against the orders of the CIT(A) for the assessment years 2011-12 and 2012-13, which confirmed the additions made by the Assessing Officer under section 68 of the Income Tax Act, 1961, treating certain cash deposits as unexplained. The Tribunal examined the cash flow statements and bank records provided by the assessee, which detailed the withdrawals and subsequent deposits. The Tribunal noted that the assessee had explained the source of the cash deposits as withdrawals from his own accounts, a claim that was not satisfactorily countered by the revenue. Consequently, the Tribunal allowed the appeals, removing the additions made as unexplained cash credits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 38066 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-10-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 11-06-2024
• Other Referred Cases: CIT V. P. Mohankala [2007] 291 ITR 278 (SC), A. Govindarajulu Mudaliar [1958] 34 ITR 807 (SC), Income tax Officer v. Solid Machinery Co. (P.) Ltd.[2022] 143 taxmann.com, CIT v. Durga Prasad More [1971] 82 ITR 540, Sumati Dayal v. CIT [1995] 80 Taxman 89/214 ITR 801 (SC), D [1963] 49 ITR 112 (SC), Sreelekha Banerjee V. CIT [1963] 49 ITR 112 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: HARI S. RAHEJA
• Keywords: Set aside; Reassessment proceedings; Unexplained cash credit; Rectification of order; Initiation of penalty proceedings
• Section: 148; 154; 271(1)(c); 68; 234B; 37

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA Nos. 3132 & 3133/MUM/2024 Assessment Years: 2011-12 & 2012-13 Abdulla Mohamed Yusuf Patel, 1101, A1-Hashmi, 24, Motibai Street, Agripada, Mumbai-400 008. Vs. NFAC, ACIT 20(1), Piramal Chamber, Mumbai. PAN NO. ACYPA 9986 H Appellant Respondent Assessee by : Mr. Hari S. Raheja Revenue by : Mr. Ram Krishn Kedia, Sr. DR Date of Hearing : 24/10/2024 Date of pronouncement : 28/10/2024 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee are directed against separate orders, both dated 16.05.2024, passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment years 2011-12 and 2012-13 respectively. As the identical grounds are involved in both these appeals, therefore same way of this consolidated order for convenience. ITA No. 3132/Mum/2024 for AY 2011 2. The grounds raised by the assessee in assessment year 2011 12 are reproduced as under: 1. On the facts and in the circumstances proceedings initiated by issuance of notice u/s. 148 of the I.T. Act is invalid and bad in law. 2. On the facts and in the circumstances of the case and in law, the assessment order passed u/s. 143(3)Rs. r.w.s. 147 of the I.T. 1961 is erroneous, invalid and bad in law. 3. Without prejudice On the facts and in the circumstances of the case (Appeals) erred in confirming the addition of Rs. 53,94,608/ taxable Income and assessing the appellant at Rs against the returned Income of Rs. 62,63,110/ 4. Without prejudice On the facts and in the circumstances of the caseRs. 3 and in law, the CIT (Appeals) erred in holding that the appellant had failed to substantiate the nature and sourc added as « Unexplained cash credits u/s. 68 of the Act » to the Total Income, without pointing out any flaw in the explanation and not considering and appreciating the Appellant's explanation in proper context and meaning 5. Without prejudice On the facts and in the circumstances of the case (Appeals) erred in not cance u/s. 271(1)(c) of the I.T. Act, 1961. 6. Without prejudice On the facts and in the (Appeals) erred in the not charging of interest u/s. 234B and 234C of the I.T. Act, 1961. ITA Nos. 3132 & 3133/MUM/2024 therefore same were heard together and disposed off by way of this consolidated order for convenience. ITA No. 3132/Mum/2024 for AY 2011-12 The grounds raised by the assessee in assessment year 2011 12 are reproduced as under: 1. On the facts and in the circumstances of the case and in law, the proceedings initiated by issuance of notice u/s. 148 of the I.T. Act is invalid and bad in law. 2. On the facts and in the circumstances of the case and in law, the assessment order passed u/s. 143(3)Rs. r.w.s. 147 of the I.T. 1961 is erroneous, invalid and bad in law. Without prejudice On the facts and in the circumstances of the case and in law, the CIT (Appeals) erred in confirming the addition of Rs. 53,94,608/ taxable Income and assessing the appellant at Rs. 1,18,75,195/ against the returned Income of Rs. 62,63,110/-. Without prejudice On the facts and in the circumstances of the caseRs. 3 and in law, the CIT (Appeals) erred in holding that the appellant had failed to substantiate the nature and source of the amount of Rs. 53,94,608/ added as « Unexplained cash credits u/s. 68 of the Act » to the Total Income, without pointing out any flaw in the explanation and not considering and appreciating the Appellant's explanation in proper context and meaning thereof. 5. Without prejudice On the facts and in the circumstances of the case and in law, the CIT (Appeals) erred in not cancelling the initiation of penalty proceedings u/s. 271(1)(c) of the I.T. Act, 1961. Without prejudice On the facts and in the circumstances of the case and in law, the CIT (Appeals) erred in the not directing the Assessing Officer to delete the charging of interest u/s. 234B and 234C of the I.T. Act, 1961. Abdulla Mohamed Yusuf Patel 2 ITA Nos. 3132 & 3133/MUM/2024 were heard together and disposed off by The grounds raised by the assessee in assessment year 2011- of the case and in law, the proceedings initiated by issuance of notice u/s. 148 of the I.T. Act is 2. On the facts and in the circumstances of the case and in law, the assessment order passed u/s. 143(3)Rs. r.w.s. 147 of the I.T. Act, and in law, the CIT (Appeals) erred in confirming the addition of Rs. 53,94,608/- to the . 1,18,75,195/- as On the facts and in the circumstances of the caseRs. 3 and in law, the CIT (Appeals) erred in holding that the appellant had failed to e of the amount of Rs. 53,94,608/- added as « Unexplained cash credits u/s. 68 of the Act » to the Total Income, without pointing out any flaw in the explanation and not considering and appreciating the Appellant's explanation in proper and in law, the CIT the initiation of penalty proceedings circumstances of the case and in law, the CIT directing the Assessing Officer to delete the charging of interest u/s. 234B and 234C of the I.T. Act, 1961. 3. Briefly stated, facts of the case are that the assessee filed its return of income on 27.07.2011 declaring total income at Rs.62,63,110/-. In view of information received from the Investigation Wing of Mumbai that assessee had deposited cash in bank account, the assessment in the case of assessee by way of notice issue u/s 148 of the Income ‘the Act’) dated 28.03.2018 assessee submitted that cash deposited was withdrawn out of bank accounts only. The assessee submitted cash flow statements but the Ld. Assessing Officer did not accept the contention of the assessee for the reason that invested in unaccounted activity, cash actually with the assessee statement, thirdly, somewhere else and the unaccounted cash bank. The Assessing Officer examined the cash flow produced by the assessee showing observed maximum cash balance of 04.02.2011. Accordingly dated 21.12.2018, unexplained cash credit u/s 68 of the Act. 4. On further appeal, the Ld. CIT(A) also upheld the finding of the Assessing Officer that there is no rationale behind withdrawal by ITA Nos. 3132 & 3133/MUM/2024 Briefly stated, facts of the case are that the assessee filed its rn of income on 27.07.2011 declaring total income at In view of information received from the Investigation Wing of Mumbai that assessee had deposited cash in he assessment in the case of assessee e issue u/s 148 of the Income-tax Act, 1961 (in short e Act’) dated 28.03.2018. In reassessment proceedings, the assessee submitted that cash deposited was withdrawn out of bank only. The assessee submitted cash flow statements but ssing Officer did not accept the contention of the assessee for the reason that firstly, the cash must have been vested in unaccounted activity, Secondly, there might not be any with the assessee as shown in the cash flow the cash withdrawn must have been used somewhere else and the unaccounted cash was bank. The Assessing Officer examined the cash flow produced by the assessee showing day wise cash balance and maximum cash balance of Rs.52,93,608/ ccordingly, in the order passed u/s 147 of the Act dated 21.12.2018, he held amount of Rs, 52,93,608/ unexplained cash credit u/s 68 of the Act. On further appeal, the Ld. CIT(A) also upheld the finding of the ssing Officer that there is no rationale behind withdrawal by Abdulla Mohamed Yusuf Patel 3 ITA Nos. 3132 & 3133/MUM/2024 Briefly stated, facts of the case are that the assessee filed its rn of income on 27.07.2011 declaring total income at In view of information received from the Investigation Wing of Mumbai that assessee had deposited cash in he assessment in the case of assessee was reopened tax Act, 1961 (in short In reassessment proceedings, the assessee submitted that cash deposited was withdrawn out of bank only. The assessee submitted cash flow statements but ssing Officer did not accept the contention of the , the cash must have been , there might not be any as shown in the cash flow the cash withdrawn must have been used was re-deposited in bank. The Assessing Officer examined the cash flow statement cash balance and Rs.52,93,608/- as on in the order passed u/s 147 of the Act amount of Rs, 52,93,608/- as On further appeal, the Ld. CIT(A) also upheld the finding of the ssing Officer that there is no rationale behind withdrawal by the assessee and re-deposite relevant finding of the Ld. CIT(A) is reproduced as under: “8. Grounds No. 3 and 4 of appeal relate to the appellant's contenti against determination of total income at Rs. 1,18,75,195/ the returned income of Rs.62,63,110/ the addition of Rs.53,94,608/ of the Act on account of cash deposit in Ba These grounds of appeal are taken up together for adjudication for the sake of clarity and brevity. Credible information was received from the Investigation Wing regarding cash deposits having been made by the appellant in his b assessment order the appellant was asked to explain the source of cash deposits amounting to Rs.85.97 lakhs during the year in his HDFC bank accounts. He submitted that these deposits were made out of withdrawals of cash from his own accounts. However the AO did not find the explanation of the appellant to be satisfactory on various grounds, such as, what was the rationale and intention for withdrawing cash regularly from bank accounts and re same despite having sufficient cash balances available; the appellant's line of business did not require such frequent cash withdrawals. During appellate proceedings, the appellant repeated the same explanation regarding source of cash deposits being from wit accounts. As regards the rationale for the same, he stated certain personal reasons relating to familial dispute for the same which had also been raised before the AO. not found to be satisfacto nature of the cash deposits made by him. In the assessment order the AO examined the cash book produced by the appellant showing daily cash balances and found that there was maximum cash balance of Rs.53,94,608/- appellant would have earned was being ploughed back into the appellant's business and the appellant would have, at most, earned income to the extent of the maximum cash balance as per his cash book, the AO treated this maximum cash balance to be unexplained cash credit under section 68 of the Act and added it to the total income of the appellant for the year. As mentioned earlier, during appellate proceedings also, the appellant failed to substantiate the na source of the cash deposits made by him as per his contention raised in the grounds of appeal. He thus failed to discharge the onus cast upon him. The fact is that money has no colour and merely making a claim without any corroborative documentary same does not help the case. In view of the factual matrix of the case, I find no infirmity in the addition made be pertinent to mention here (as referred to earlier in this order) that vide subsequent rectification order under section 154 of the act dated 18/03/2023 the total income of the appellant for the year was rectified to Rs. 1,24,71,710/ ITA Nos. 3132 & 3133/MUM/2024 deposite again into the same bank account. The relevant finding of the Ld. CIT(A) is reproduced as under: Grounds No. 3 and 4 of appeal relate to the appellant's contenti against determination of total income at Rs. 1,18,75,195/ the returned income of Rs.62,63,110/-. The appellant has challenged the addition of Rs.53,94,608/- as unexplained credits under section 68 of the Act on account of cash deposit in Bank account during the year. These grounds of appeal are taken up together for adjudication for the sake of clarity and brevity. Credible information was received from the Investigation Wing regarding cash deposits having been made by the appellant in his bank accounts during the year. As seen from the assessment order the appellant was asked to explain the source of cash deposits amounting to Rs.85.97 lakhs during the year in his HDFC bank accounts. He submitted that these deposits were made out of als of cash from his own accounts. However the AO did not find the explanation of the appellant to be satisfactory on various grounds, such as, what was the rationale and intention for withdrawing cash regularly from bank accounts and re-depositing the e despite having sufficient cash balances available; the appellant's line of business did not require such frequent cash withdrawals. During appellate proceedings, the appellant repeated the same explanation regarding source of cash deposits being from withdrawals from his own accounts. As regards the rationale for the same, he stated certain personal reasons relating to familial dispute for the same which had also been raised before the AO. However, the appellant's explanation is not found to be satisfactory or sufficient to establish the source and nature of the cash deposits made by him. In the assessment order the AO examined the cash book produced by the appellant showing daily cash balances and found that there was maximum cash balance of - on 04.01.2011. Considering that whatever income appellant would have earned was being ploughed back into the appellant's business and the appellant would have, at most, earned income to the extent of the maximum cash balance as per his cash book, treated this maximum cash balance to be unexplained cash credit under section 68 of the Act and added it to the total income of the appellant for the year. As mentioned earlier, during appellate proceedings also, the appellant failed to substantiate the na source of the cash deposits made by him as per his contention raised in the grounds of appeal. He thus failed to discharge the onus cast upon him. The fact is that money has no colour and merely making a claim without any corroborative documentary evidence to substantiate the same does not help the case. In view of the factual matrix of the case, I find no infirmity in the addition made by the AO in this regard. It may be pertinent to mention here (as referred to earlier in this order) that bsequent rectification order under section 154 of the act dated 18/03/2023 the total income of the appellant for the year was rectified to Rs. 1,24,71,710/- instead of Rs. 1,18,75, 195/-. Abdulla Mohamed Yusuf Patel 4 ITA Nos. 3132 & 3133/MUM/2024 again into the same bank account. The relevant finding of the Ld. CIT(A) is reproduced as under: Grounds No. 3 and 4 of appeal relate to the appellant's contentions against determination of total income at Rs. 1,18,75,195/- as against . The appellant has challenged as unexplained credits under section 68 nk account during the year. These grounds of appeal are taken up together for adjudication for the sake of clarity and brevity. Credible information was received from the Investigation Wing regarding cash deposits having been made by the ank accounts during the year. As seen from the assessment order the appellant was asked to explain the source of cash deposits amounting to Rs.85.97 lakhs during the year in his HDFC bank accounts. He submitted that these deposits were made out of als of cash from his own accounts. However the AO did not find the explanation of the appellant to be satisfactory on various grounds, such as, what was the rationale and intention for depositing the e despite having sufficient cash balances available; the appellant's line of business did not require such frequent cash withdrawals. During appellate proceedings, the appellant repeated the same explanation hdrawals from his own accounts. As regards the rationale for the same, he stated certain personal reasons relating to familial dispute for the same which had However, the appellant's explanation is ry or sufficient to establish the source and nature of the cash deposits made by him. In the assessment order the AO examined the cash book produced by the appellant showing daily cash balances and found that there was maximum cash balance of 04.01.2011. Considering that whatever income appellant would have earned was being ploughed back into the appellant's business and the appellant would have, at most, earned income to the extent of the maximum cash balance as per his cash book, treated this maximum cash balance to be unexplained cash credit under section 68 of the Act and added it to the total income of the appellant for the year. As mentioned earlier, during appellate proceedings also, the appellant failed to substantiate the nature and source of the cash deposits made by him as per his contention raised in the grounds of appeal. He thus failed to discharge the onus cast upon him. The fact is that money has no colour and merely making a claim evidence to substantiate the same does not help the case. In view of the factual matrix of the case, I by the AO in this regard. It may be pertinent to mention here (as referred to earlier in this order) that bsequent rectification order under section 154 of the act dated 18/03/2023 the total income of the appellant for the year was rectified 8.1 In CIT V. P. Mohankala [2007] 291 ITR 278 (SC) the Hon'ble Apex Court held that 1961, suggests that i) there has to be credit of amounts in the books maintained by the assessee; (ii) such credit has to be a sum of money during the previous year; and (ili) either (a explanation about the nature and source of such credits found in the books or (b) the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory. It is only then that the sum so credited may b that previous year. The expression \"the assessee offers no explanation\" means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. 8.2 In A. Govindarajulu Supreme Court held that Section 68 casts liability on assesse assessee has to prove amounts of cash received is entitled to draw the inference that the receipts are of an assessable nature. 8.3 In the case of Income tax Officer v. Solid Machinery Co. (P.) Ltd.[2022] 143 taxmann.com while deciding in Supreme Court's observation in the case of 'CIT v. Durga Prasad More [1971] 82 ITR 540, to the effect that \"Science has not yet invented any instrument to test the reliability of the tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities\". Similarly, in a later decision in the case of Sumati Dayal v. CIT [1995] 80 Taxman 89/214 ITR 801 (SC), Hon'ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that, \"This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human Similarly the observation.... that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes plac would be rarely available In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim abo amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the amounts has been rejected unreasonably\". We will be superficial in our approach in case we examine the claim o basis of documents filed by the unusual pattern in the documents filed by the assessee and be oblivious of the ground realities. As Hon'ble Supreme Court has observed, in the case of D an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a recital in a deed has to establish the truth of those recital ITA Nos. 3132 & 3133/MUM/2024 8.1 In CIT V. P. Mohankala [2007] 291 ITR 278 (SC) the Hon'ble Apex Court held that - A bare reading of section 68 of the Income 1961, suggests that i) there has to be credit of amounts in the books maintained by the assessee; (ii) such credit has to be a sum of money during the previous year; and (ili) either (a) the assessee offers no explanation about the nature and source of such credits found in the books or (b) the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory. It is only then that the sum so credited may be charged to Income-tax as the income of the assessee of that previous year. The expression \"the assessee offers no explanation\" means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books tained by the assessee. In A. Govindarajulu Mudaliar. [1958] 34 ITR 807 (SC) the Hon'ble Supreme Court held that Section 68 casts liability on assesse assessee has to prove satisfactorily the source and nature of certain amounts of cash received during the accounting year and if not, the ITO is entitled to draw the inference that the receipts are of an assessable In the case of Income tax Officer v. Solid Machinery Co. (P.) 143 taxmann.com 293 (Mumbai - Trib.), the Hon'ble while deciding in favour of Revenue, placed reliance on the Hon'ble Supreme Court's observation in the case of 'CIT v. Durga Prasad More [1971] 82 ITR 540, to the effect that \"Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities\". Similarly, in a later decision in the case of Sumati Dayal v. CIT [1995] 80 Taxman TR 801 (SC), Hon'ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that, \"This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human probabilities... Similarly the observation.... that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim abo amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the amounts has been rejected unreasonably\". We will be superficial in our approach in case we examine the claim of the assessee solely on the basis of documents filed by the assessee and overlook clear the unusual pattern in the documents filed by the assessee and be oblivious of the ground realities. As Hon'ble Supreme Court has observed, in the case of Durga Prasad More (supra),.........\"it is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it Abdulla Mohamed Yusuf Patel 5 ITA Nos. 3132 & 3133/MUM/2024 8.1 In CIT V. P. Mohankala [2007] 291 ITR 278 (SC) the Hon'ble Apex A bare reading of section 68 of the Income- tax Act, 1961, suggests that i) there has to be credit of amounts in the books maintained by the assessee; (ii) such credit has to be a sum of money ) the assessee offers no explanation about the nature and source of such credits found in the books or (b) the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory. It is only then that the sum so income of the assessee of that previous year. The expression \"the assessee offers no explanation\" means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books 34 ITR 807 (SC) the Hon'ble Supreme Court held that Section 68 casts liability on assesse - the satisfactorily the source and nature of certain accounting year and if not, the ITO is entitled to draw the inference that the receipts are of an assessable In the case of Income tax Officer v. Solid Machinery Co. (P.) Trib.), the Hon'ble ITAT favour of Revenue, placed reliance on the Hon'ble Supreme Court's observation in the case of 'CIT v. Durga Prasad More [1971] 82 ITR 540, to the effect that \"Science has not yet invented any evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities\". Similarly, in a later decision in the case of Sumati Dayal v. CIT [1995] 80 Taxman TR 801 (SC), Hon'ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that, \"This, in our opinion, is a superficial approach to the problem. The probabilities... Similarly the observation.... that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning e in secret and direct evidence about such purchase would be rarely available In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably\". We will be superficial in our f the assessee solely on the assessee and overlook clear the unusual pattern in the documents filed by the assessee and pretend to be oblivious of the ground realities. As Hon'ble Supreme Court has urga Prasad More (supra),.........\"it is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a s, otherwise it will be very easy to make self executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents\". 8.4 In Sreelekha Banerjee V. CIT Supreme Court held that it entry in the books of accounts does not bear the character of income. At that stage the Department is required to prove nothing. 8.5 It was also seen that the appellant had shown income on account of rent received from various telecom tower operators under the head income from business and profession and income from other sources instead of income from house property, and claimed deduction of expenses there in. On being asked during assessment proceedings why the same should not be disallowed, the appellant responded by saying that he had done the accounting as per the advice of his CA. thus treated Rs. 4,59,246/ property and disallowed expenses claimed at Rs. 11,56,714/ section 37 of the Act. not made any submission on this matter. I do not find any infirmity in the action of the AO in treating the income under the correct head and disallowing the expenses claimed. These therefore found untenable and dismissed. 5. Before us, on behalf of the assessee, the Ld. counsel did not pressed ground No. 1 and 2 of the appeal challenging the validity of the reassessment. The ground No of the addition of Rs.53,94,608/ referred to the Paper Book page 37 which is cash book or cash flow statement for the year under consideration indicating withdrawal of the money from the bank accounts as well as bank accounts. He available from pages the assessee accordingly submitted that source of the cash ITA Nos. 3132 & 3133/MUM/2024 will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the ocuments produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents\". In Sreelekha Banerjee V. CIT -[1963] 49 ITR 112 (SC), the Hon'ble Supreme Court held that it is the assessee that has to prove that an entry in the books of accounts does not bear the character of income. At that stage the Department is required to prove nothing. It was also seen that the appellant had shown income on account of from various telecom tower operators under the head income from business and profession and income from other sources instead of income from house property, and claimed deduction of expenses there in. On being asked during assessment proceedings why me should not be disallowed, the appellant responded by saying that he had done the accounting as per the advice of his CA. thus treated Rs. 4,59,246/- rental income as income from house property and disallowed expenses claimed at Rs. 11,56,714/ section 37 of the Act. During appellate proceedings the appellant has not made any submission on this matter. I do not find any infirmity in the action of the AO in treating the income under the correct head and disallowing the expenses claimed. These grounds of appeal are therefore found untenable and dismissed.” Before us, on behalf of the assessee, the Ld. counsel did not pressed ground No. 1 and 2 of the appeal challenging the validity of the reassessment. The ground Nos. 3 and 4 are in relation of the addition of Rs.53,94,608/-. The Ld. counsel for the assessee referred to the Paper Book page 37 which is cash book or cash flow statement for the year under consideration indicating withdrawal of the money from the bank accounts as well as re- also referred to detailed bank statement 12 to 35 of the Paper Book. The Ld. counsel for the assessee accordingly submitted that source of the cash Abdulla Mohamed Yusuf Patel 6 ITA Nos. 3132 & 3133/MUM/2024 serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the ocuments produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in [1963] 49 ITR 112 (SC), the Hon'ble is the assessee that has to prove that an entry in the books of accounts does not bear the character of income. At It was also seen that the appellant had shown income on account of from various telecom tower operators under the head income from business and profession and income from other sources instead of income from house property, and claimed deduction of expenses there in. On being asked during assessment proceedings why me should not be disallowed, the appellant responded by saying that he had done the accounting as per the advice of his CA. The AO rental income as income from house property and disallowed expenses claimed at Rs. 11,56,714/- under During appellate proceedings the appellant has not made any submission on this matter. I do not find any infirmity in the action of the AO in treating the income under the correct head and grounds of appeal are Before us, on behalf of the assessee, the Ld. counsel did not pressed ground No. 1 and 2 of the appeal challenging the validity of . 3 and 4 are in relation to merit . The Ld. counsel for the assessee referred to the Paper Book page 37 which is cash book or cash flow statement for the year under consideration indicating withdrawal of -deposit in said also referred to detailed bank statement, 12 to 35 of the Paper Book. The Ld. counsel for the assessee accordingly submitted that source of the cash deposited has been duly explained by the withdraw account by the assessee. He submitted that Assessing Officer merely presumed that money else without no documentary evidence in support of presumption 6. The Ld. Departmental Representative (DR) submitted that there is no rationale for thereafter again re-deposit in bank account. surrounding circumstances should be looked into in such cases and therefore, he prayed be upheld. In the rejoinder, the Ld. counsel for the assessee submitted that there was a family dispute in the case of the assessee, for which he is with him. He submitted that finally ther family and his wife took divorce with mutual sufficient amount alumni divorce certificate, which is available on Paper Book page 44. 7. We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is the source of the cash deposits in the bank account. We find that assessee has filed the cash book for the year under consideration explaining the source of the cash deposits as out of cash withdrawal from the bank accounts. The assessee has also duly shown the drawing for the household withdrawal by the Assessing Officer ITA Nos. 3132 & 3133/MUM/2024 deposited has been duly explained by the withdraw the assessee. He submitted that Assessing Officer that money withdrawn was invested no documentary evidence in support of presumption The Ld. Departmental Representative (DR) on the other hand submitted that there is no rationale for withdrawing deposit in bank account. He surrounding circumstances should be looked into in such cases prayed that order of the lower authorities should be upheld. In the rejoinder, the Ld. counsel for the assessee submitted that there was a family dispute in the case of the he was advised to keep sufficient bank balance is with him. He submitted that finally there was a separation in the family and his wife took divorce with mutual consent sufficient amount alumni paid by him. The Ld. counsel referred to which is available on Paper Book page 44. We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is the source of the cash deposits in the bank account. We find that assessee has filed the cash book for the year under consideration explaining the source of the cash deposits as out of cash withdrawal from the bank accounts. The assessee has also duly shown the drawing for the household withdrawal, which has not been disputed by the Assessing Officer. We also note that the Assess Abdulla Mohamed Yusuf Patel 7 ITA Nos. 3132 & 3133/MUM/2024 deposited has been duly explained by the withdrawal from bank the assessee. He submitted that Assessing Officer has invested somewhere no documentary evidence in support of presumption on the other hand withdrawing the cash and submitted that surrounding circumstances should be looked into in such cases wer authorities should be upheld. In the rejoinder, the Ld. counsel for the assessee submitted that there was a family dispute in the case of the advised to keep sufficient bank balance e was a separation in the consent with the . The Ld. counsel referred to which is available on Paper Book page 44. We have heard rival submission of the parties and perused the relevant material on record. The issue in dispute is the source of the cash deposits in the bank account. We find that assessee has filed the cash book for the year under consideration satisfactorily explaining the source of the cash deposits as out of cash withdrawal from the bank accounts. The assessee has also duly shown the has not been disputed that the Assessing Officer has not been able to substantiate whether the assessee has invested the cash withdrawn for household expenses evidences, it cannot be presumed that said cash was not avail with the assessee for re circumstances explained by the Ld. counsel for the assessee reject the contention of the Ld. DR for considering surrounding circumstances while deciding the issue of source of cash deposit In view of the above discussion, the finding of the Ld. CIT(A) on the issue in dispute is set aside and the addition of cash deposit of Rs.53,94,608/- treated as unexplained cash ground Nos. 3 and 4 of the appeal are accordingly a ground No. 5 of the appeal relates to initi proceedings which is premature at this stage and dismissed as infructuous. The gro charging of interest u/s 234B and 234C of the consequential in nature infructuous. The ground No. 7 of the appeal is and same is dismissed as infructuous. ITA No. 3133/Mum/2024 for AY 2012 8. In assessment year 2012 of cash deposits of R by the ld CIT(A). The Ld. counsel for the assessee has referred to the Paper Book filed for the year under consideration and ca ITA Nos. 3132 & 3133/MUM/2024 has not been able to substantiate whether the assessee has the cash withdrawn somewhere else or utilized the money for household expenses. In absence of any such documentary it cannot be presumed that said cash was not avail with the assessee for re-deposit. In view of the circumstances explained by the Ld. counsel for the assessee reject the contention of the Ld. DR for considering surrounding circumstances while deciding the issue of source of cash deposit In view of the above discussion, the finding of the Ld. CIT(A) on the issue in dispute is set aside and the addition of cash deposit of treated as unexplained cash credit . 3 and 4 of the appeal are accordingly a ground No. 5 of the appeal relates to initiating proceedings which is premature at this stage and therefore dismissed as infructuous. The ground No. 6 of the appeal relates charging of interest u/s 234B and 234C of the in nature and the therefore, same is dismissed as infructuous. The ground No. 7 of the appeal is general in nature and same is dismissed as infructuous. 3133/Mum/2024 for AY 2012-13 In assessment year 2012-13, the assessee has raised of cash deposits of Rs.38,60,323/- held as unexplained cash credit . The Ld. counsel for the assessee has referred to the Paper Book filed for the year under consideration and ca Abdulla Mohamed Yusuf Patel 8 ITA Nos. 3132 & 3133/MUM/2024 has not been able to substantiate whether the assessee has somewhere else or utilized the money . In absence of any such documentary it cannot be presumed that said cash was not available deposit. In view of the facts and circumstances explained by the Ld. counsel for the assessee, we reject the contention of the Ld. DR for considering surrounding circumstances while deciding the issue of source of cash deposits. In view of the above discussion, the finding of the Ld. CIT(A) on the issue in dispute is set aside and the addition of cash deposit of credit is deleted. The . 3 and 4 of the appeal are accordingly allowed. The of the penalty therefore same is und No. 6 of the appeal relates to charging of interest u/s 234B and 234C of the Act, which is and the therefore, same is dismissed as general in nature 13, the assessee has raised the issue held as unexplained cash credit . The Ld. counsel for the assessee has referred to the Paper Book filed for the year under consideration and cash flow statement available consideration also the assessee has explained the source of the cash deposits as out from the withdrawal statement. As the facts and circumstances in the year under consideration being identical to facts and circumstances in assessment year 2011 assessment year 2011 in dispute in the year under consideration addition made of Rs.38,60,323/ the assessee are accordingly adjudicated mutatis mutandis to assessment year 2011 9. In the result, both the appeals of the assessee are allowed. Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 28/10/2024 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA Nos. 3132 & 3133/MUM/2024 on Paper Book page 47. In the year under consideration also the assessee has explained the source of the cash deposits as out from the withdrawals appearing in the facts and circumstances in the year under nsideration being identical to facts and circumstances in assessment year 2011-12, therefore, following our fin assessment year 2011-2, the findings of the Ld. CIT(A) on the issue in dispute in the year under consideration are set aside and the tion made of Rs.38,60,323/- is deleted. The grounds raised by the assessee are accordingly adjudicated mutatis mutandis to assessment year 2011-12. In the result, both the appeals of the assessee are allowed. ronounced in the open Court on 28 Sd/- (RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Abdulla Mohamed Yusuf Patel 9 ITA Nos. 3132 & 3133/MUM/2024 on Paper Book page 47. In the year under consideration also the assessee has explained the source of the appearing in bank the facts and circumstances in the year under nsideration being identical to facts and circumstances in therefore, following our finding in of the Ld. CIT(A) on the issue set aside and the is deleted. The grounds raised by the assessee are accordingly adjudicated mutatis mutandis to In the result, both the appeals of the assessee are allowed. 28/10/2024. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "