Shri Jaysukh Nanjibhai Gajera, Surat V. Income-tax Officer Ward-3(3)(2)/Surat, Surat

ITA 123/SRT/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5241 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 03-07-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 04-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 142(1); 250; 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JIDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.123/SRT/2024 Assessment Year: (2017-18) (Hybrid Processing Hearing) Shri Jaysukh Nanjibhai Gajera 10, Gajera Park Society, Nr. Patel Samaj Wadi, Varachha Road, Surat-395006 Vs. Income Tax Officer, Ward- 3(3)(2), Surat, Aayakar Bhavan, Majura Gate, Surat-395001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ABCPG 0699 Q (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Assessee by Shri Ashwin K. Parekh, CA िनधाŊįरती की ओर से /Revenue by Shri Vinod Kumar, Sr. DR अपील पंजीकरण/Appeal instituted on 05.02.2024 सुनवाई की तारीख /Date of Hearing 04.07.2024 घोषणा की तारीख /Date of Pronouncement 07.08.2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order of the Learned Commissioner of Income Tax(Appeals) / National Faceless Appeal Centre, Delhi (NFAC) [in short, “CIT(A)”] under section 250 of the Income-tax Act, 1961 (in short, “the Act”) dated 15.12.2023 for assessment year (AY) 2017-18. The grounds of appeal raised by the assessee are as under:- 2 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera “1. The Learned Commissioner of Income-tax (Appeals) has grievously erred in law and on facts in confirming the addition of Rs.16,00,000/- u/s 69A of the Act without appreciating the evidences of source of cash deposited submitted during the course of assessment proceedings. The addition of Rs.16,00,000/-should therefore, be deleted. 2. The Learned Commissioner of Income-tax (Appeals) has grievously erred in law and on facts in confirming the addition of Rs.16,00,000/- without appreciating the facts that the appellant had sufficient cash balance which could have been verified from the Income tax return of A.Y 2016-17. The addition of Rs.16,00,000/-should therefore be deleted. 3. The Learned Commissioner of Income-tax (Appeals) has grievously erred in law and on facts in charging the tax u/s 115BBE of the Act on cash deposited without appreciating the satisfactory explanation on source of cash deposit. The appellant reserves the right to add, alter, modify, amend or withdraw any grounds of appeal before hearing.” 2. Facts of the case in brief are that assessee e-filed his return of income (ITR) for AY 2017-18 on 16.09.2017 declaring total income of Rs.2,86,509/-. The case was selected for scrutiny through compulsory manual selection for cash deposited during the demonetization period. The AO issued statutory notices u/s 143(2) and 142(1) to the assessee requiring him to produce various details. The assessee submitted details but source of cash deposited of Rs.16,00,000/- in his bank account maintained with Surat Peoples Co-Op. Bank Ltd. during demonetization period was not explained. The explanation that the source of cash deposited was earlier cash withdrawal as well as his accumulated savings was not accepted by AO. In the subsequent reply, assessee stated that he had sold his property in December, 2015 for which payment was received in March, 2016 and he had withdrawn 3 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera cash from the bank which was again deposited in the bank during demonetization period. The AO issued final show-cause notice to the assessee on 21.12.2019 and fixed for hearing on 23.12.2019. The assessee did not file any reply in response to the above show-cause notice. Therefore, AO added Rs.16,00,000/- u/s 69A of the Act. He has also initiated penalty u/s 271AAC of the Act. Aggrieved by the addition made by AO assessee preferred appeal before Ld. CIT(A). 3. Before Ld.CIT(A) assessee stated that source of cash deposit was out of cash withdrawals from Surat Peoples Co-Op. Bank Ltd. (Rs.3,30,000/-) and Vijaya Bank (Rs.8,56,500/-). The assessee had thus withdrawn cash of Rs.11,86,500/- which was deposited in his bank account. The remaining deposit of Rs.4,13,500/- was out of opening cash-on-hand. It was submitted that in AY 2016-17, assessee had sold land and received sale consideration of Rs.31,91,500/- and from the said amount, he had made withdrawals and kept cash-in-hand. The CIT(A) found no merit in the submission of the assessee for the reasons that assessee had not explained why cash was withdrawn periodically and kept in hand when he did not require the same. The CIT(A) also observed that assessee has not explained the purpose of cash withdrawals supported by bank statement. He observed that the explanation is an afterthought and the documents cannot be treated as 4 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera evidence. The Ld.CIT(A) confirmed the action of AO. Aggrieved by this order of Ld.CIT(A), assessee has filed present appeal before the Tribunal. 4. Before us, Ld.AR of the assessee filed paper book which containing 33 pages including written submission to CIT(A) and AO and copies of ITR, cash book, bank statements. He made similar submission as was made before the lower authorities. He submitted that closing cash balance as on 31.03.2016 was Rs.29,49,979/- which is evident from the return of income filed for AY 2016-17. 5. On the other hand, Ld.Sr-DR of the Revenue has supported the order of lower authorities. He submitted that assessee has not explained as to why he had withdrawn various amounts in cash ranging from Rs.90,000/- to Rs.98,000/- per day from Vijaya Bank if he had opening balance of Rs.29,49,979/-. No third party evidence has been given to support the claim of the assessee. The details and documents submitted by the assessee are self-serving documents which cannot be relied upon. He requested to confirm the addition made by the AO which has been rightly sustained by CIT(A). 6. We have heard both the parties and perused the record carefully. It is an undisputed fact that assessee had deposited cash of Rs.15,00,000/- 11.11.2016 and Rs.1,00,000/- 05.12.2016 in his bank 5 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera account No.104141163761 maintained with Surat Peoples Co-Op. Bank Ltd. The explanation given by assessee before the lower authorities was cash withdrawal from his two bank accounts with Surat Peoples Co-Op. Bank Ltd. and Vijaya Bank and the remaining amount was out of the opening cash-in-hand. As per the detail given by the assessee it had withdrawn of Rs.8,56,500/- from Vijaya Bank and Rs.3,30,000/- from Surat Peoples Co-Op. Bank Ltd. The same is as under: Date Amount of cash withdrawal from Surat Peoples Co-op. Bank Ltd. Amount of cash withdrawal from Vijaya Bank 02.04.2016 -- 90,000/- 012.04.2016 -- 95,000/- 05.04.2016 -- 95,000/- 06.04.2016 -- 90,000/- 07.04.2016 -- 95,000/- 08.04.2016 -- 98,000/- 11.04.2016 -- 98,500/- 12.04.2016 -- 97,000/- 13.04.2016 -- 98,000/- 23.04.2016 50,000/- -- 25.04.2016 50,000/- -- 23.05.2016 50,000/- -- 29.06.2016 40,000/- -- 27.09.2016 40,000/- -- 15.10.2016 50,000/- -- 05.11.2016 50,000/- -- Total 3,30,000/- 8,56,500/- 6.1 It is seen from the above table that the assessee had withdrawn cash nine times totaling to Rs.8,56,500/- within a short period of 11 days from 02.04.2016 to 13.04.2016 from Vijaya Bank. He has also withdrawn Rs.3,30,000/- from Surat Peoples Co-Op. Bank Ltd. during 23.04.2016 to 05.11.2016. The assessee has claimed that it had closing cash balance of Rs.29,49,979/- was out of the sale consideration of 6 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera Rs.31,91,500/- from sale of land bearing Revenue Survey No.357, TP Scheme No.4, F.P.No.441A of Katargam Surat on 14.12.2015. However, copies of sale deed and bank statement have not been given to support the above claim. Further, as submitted by the Ld.Sr.AR why would the assessee regularly withdraw Rs.90,000/- to Rs.98,500/- per day in April itself if he had opening cash balance of Rs.29,49,979/- on April, 2016. Such conduct of the assessee has not been satisfactorily explained by the assessee before the lower authorities and the Tribunal. It is a clear case where principle of “Human Probabilities” is applicable. The “Human Probabilities” is a standard of proof used in Income-tax Law. It is a concept that recognize that in some situations, it is not possible to provide conclusive evidence to prove a case, but rather a judgment must be made on probabilities and common sense. A reasonable person from the evidence of repeated withdrawals in April 2016, would conclude that the assessee did not have the opening cash balance of Rs.24,49,979/-. The explanation of opening cash balance is not supported by any evidence apart from the return of income which alone would not constitute credible and acceptable explanation in absence of necessary supporting evidence. It may be stated that in the said return of income filed by the assessee, the “revenue from operation” including sales and other income is shown at 7 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera Rs.Nil each. As stated earlier, assessee has also not submitted copies of sale deed and bank statement of preceding assessment year. The assessee has also not submitted copies of the complete set of documents of the ITR for AY 2016-17. Therefore, claim of opening cash balance of Rs.29,49,979/- cannot be accepted. In fact, the assessee himself has stated that out of the total cash deposit of Rs.16,00,000/- during demonetization period, opening cash-in-hand of Rs.4,13,500/- was used and the balance of Rs.11,86,500/- (Rs.3,30,000/- + Rs.8,56,500/-) was out of cash withdrawals from Vijaya Bank and Surat Peoples Co-Op. Bank Ltd. In view of these facts, the explanation of the assessee cannot be accepted in toto. The withdrawal of Rs.50,000/- each on 15.10.2016 and 05.11.2016 are accepted for subsequent deposits during demonetization period on 11.11.2016 because they had been withdrawn within a month prior to the demonetization period. The assessee is also allowed further benefit of Rs.2,50,000/- in view of CBDT Instruction No.03/2017 dated 21.2.2017. Thus, cash deposit of Rs.3,50,000/-is accepted and the remaining amount is treated as unexplained cash. Accordingly, the AO is directed to delete Rs.3,50,000/- from the addition of Rs.16,00,000/-. This ground is partly allowed. 8 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera 7. So far as taxing the addition u/s 115BBE of the Act at enhanced rate of tax @ 60% u/s 15BBE of the Act is concerned, we find that the Division Bench of this Tribunal in cases of Samir Shantilal Mehta vs. ACIT (ITA No.42/SRT/2022, Arjunsinh Harisinih Thakor vs. ITO (ITA No.245/SRT/2021, Jitendra Nemichand Gupta vs. ITO (ITA No.211/SRT/2021 and Sanjaybhai Mansukhbhai Patel vs. DCIT (ITA No.869/SRT/2023; Indore Bench in DCIT vs. Punjab Retail Pvt. Ltd. (ITA No.677/Ind/2019 and Jabalpur Bench in ACIT vs. Sandesh Kumar Jain (ITA No.41/Jab/2020) held that applicability of amended provision of Section 115BBE of the Act is not retrospective. Thus, the AO is directed to tax the remaining addition at normal rate of tax and applicable surcharges and cess, if any. Thus, the assessee is allowed relief against taxing the addition at higher rate u/s 115BE of the Act. This ground is allowed. 8. In the result, appeal filed by the assessee is partly allowed. Order is pronounced on 07/08/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER hhhhhhhhhh स ू रत/Surat Ǒदनांक/ Date: 07/08/2024 DKP Outsourcing Sr.P.S 9 ITA No.123/SRT/2024 AY.17-18 Sh.Jaysukh N Gajera Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat