Sanjeev Kumar, New Delhi V. ITO WARD - 50(1), New Delhi

ITA 1394/DEL/2020

AI Insights

The case revolves around an appeal by Sanjeev Kumar against the order of the Commissioner of Income Tax (Appeals)-42, New Delhi, which confirmed the addition of Rs.16,69,900 to the assessee's income for the assessment year 2011-12 under section 68 of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer after noticing unexplained cash deposits in the assessee's bank account. The assessee contended that these deposits were from earlier cash withdrawals, a claim that was not accepted by the tax authorities. The Tribunal, after reviewing the submissions and evidence, concluded that the authorities had not properly considered the assessee's explanations and thus allowed the appeal.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 113330 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2022
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: SMC
• Next Hearing Date: 20-11-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 06-07-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAKESH GUPTA
• Section: 147; 68

Judgement Text

I.T.A.No.1394/Del/2020 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC” NEW DELHI SHRI SAKTIJIT DEY, JUDICIAL MEMBER आ.अ.स ं /.I.T.A No.1394/Del/2020 िनधा रणवष /Assessment Year: 2011-12 Sanjeev Kumar 32/38, West Patel Nagar, New Delhi. बनाम Vs. ITO Ward 50(1) New Delhi. PAN No. ABLPK8367Q अपीलाथ Appellant यथ /Respondent िनधा रतीक ओरसे /Assessee by Dr. Rakesh Gupta, Adv. Shri Saksham Agarwal, CA राज वक ओरसे /Revenue by Shri Toufel Tahir, Sr. DR स ु नवाईक तारीख/ Date of hearing: 21.11.2022 उ ोषणाक तारीख/Pronouncement on 28.12.2022 आदेश /O R D E R This is an appeal by the assessee against order dated 06.03.2020 of learned Commissioner of Income Tax (Appeals)-42, New Delhi for the assessment year 2011-12. 2. The dispute in the present appeal is confined to addition of an amount of Rs.16,69,900/- under section 68 of the Income Tax Act, 1961. 3. Briefly the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee did not file any I.T.A.No.1394/Del/2020 2 return of income originally. Subsequently, the Assessing Officer received information from departmental sources that in the year under consideration the assessee had deposited cash amounting to Rs.16,69,900/- in his savings bank account maintained with Punjab National Bank. Further, he noticed, in addition to bank interest of Rs.43,191/- the assessee had receipts of Rs.65,200/- from M/s ABC Leathers. Based on these informations, the Assessing Officer formed a belief that there is escapement of income assessable to tax. Accordingly, he reopened the assessment under section 147 of the Act. In course of assessment proceeding, on perusal of bank statement, he noticed that the assessee in aggregate had deposited cash amounting to Rs.16,69,900/- in his bank account on three different dates. He, therefore, called upon the assessee to explain the source of such cash deposits. Alleging that the assessee could not explain the source of cash deposits, the Assessing Officer treated the entire cash deposit of Rs. 16,69,900/- as unexplained cash credit under section 68 of the Act and added back to the income of the assessee. Against the addition so made, the assessee preferred an appeal before learned Commissioner (Appeals). However, the addition was confirmed. I.T.A.No.1394/Del/2020 3 4. Before me, learned Counsel appearing for the assessee submitted, the assessee used to withdraw cash regularly from his bank account and the cash deposits were made out of such cash withdrawals. In this context, he drew my attention to the copy of the bank statement. He submitted, though, assessee in his reply dated 28 th September 2018 furnished before the Assessing Officer clearly brought this fact on record, however, the Assessing Officer has completely ignored the submissions of the assessee. He submitted, even, learned Commissioner (Appeals) did not give credence to assessee’s submissions. He submitted, when the Revenue has failed to prove that the earlier withdrawals were used for some other specific purpose and not available with the assessee for re-deposits, assessee’s explanation cannot be rejected on conjecture and surmises. Thus, he submitted, addition made should be deleted. 5. Learned Departmental Representative strongly relied upon the observations of learned Commissioner (Appeals). Further, he specifically drew my attention to the observations made by learned Commissioner (Appeals) in paragraph 9.3 of the impugned order. 6. I have considered rival submissions in the light of decisions relied upon and perused the materials on record. I.T.A.No.1394/Del/2020 4 7. Undisputedly, in the year under consideration the assessee had deposited cash aggregating to Rs.16,69,900/- into a single savings bank account maintained with Punjab National Bank in the following manner: • 18.08.2010 Rs. 8,65,000/- • 21.08.2010 Rs.7,55,000/- • 10.02.2011 Rs. 49,900/- 8. While explaining the source of cash deposits in course of assessment proceedings, the assessee in his reply dated 28.09.2018 had submitted that the cash deposits were out of the withdrawals made earlier from the bank account as under: Date Amount (in Rs.) 02.01.2010 3,00,000/- 09.01.2010 15,00,000/- 18.01.2010 9,50,000/- 26.02.2010 6,000/- 16.03.2010 1,00,000/- 19.03.2010 1,20,000/- 12.05.2010 28,00,000/- 17.05.2010 80,000/- 29.07.2010 50,000/- 01.09.2010 1,59,000/- 10.11.2010 1,32,000/- 04.01.2011 1,70,000/- 9. However, a perusal of the assessment order reveals that the Assessing Officer has considered only part of assessee’s submission while completely ignoring the other part explaining the source of deposits from earlier withdrawals. This is evident from the I.T.A.No.1394/Del/2020 5 observation of the Assessing Officer that the assessee could not explain the source of cash deposit. In fact, a perusal of assessee’s reply makes it clear that assessee did explain the source of cash deposits, though, it is another matter whether such explanation is acceptable to the Assessing Officer or not. Be that as it may, in course of hearing before the First Appellate Authority the assessee had reiterated the stand taken before the Assessing Officer. However, learned Commissioner (Appeals) rejected assessee’s plea of availability of cash from earlier withdrawals for re-depositing on the reasoning that regular cash withdrawals made by the assessee must be for the purpose of meeting household/personal expenses or expenses incurred for specific reason of ongoing renovation and improvement of residential house. He has further observed that no reasonable person would withdraw cash from the bank account at regular intervals just to accumulate cash in hand for the purpose of depositing cash in the bank account. 10. In my view, the aforesaid observations of learned Commissioner (Appeals) are merely on conjectures and surmises and not based on any cogent material brought on record. Learned Commissioner (Appeals) has speculated that the cash withdrawals must have been used for specific purposes and not available as cash I.T.A.No.1394/Del/2020 6 in hand. When there is no material on record to suggest that the assessee has utilized the entire cash withdrawal for specified purposes, assessee’s claim that a part of such withdrawal amounting to Rs.16,69,900/- was available as cash in hand on different dates cannot be rejected in toto. As could be seen from the details furnished, the first cash deposit of Rs.8,65,000/- was made on 18.08.2010. Prior to this date, the assessee had withdrawn cash of Rs.59,06,000/-, even, after the first date of cash deposit on 19.08.2010, the assessee has made further cash withdrawals till 04.01.2011. Even, assuming that part of such cash withdrawals were utilized for personal expenses and renovation expenses, as alleged by learned Commissioner (Appeals), it cannot be ruled out that the entire amount was not utilized by the assessee. It could be possible that part of the earlier withdrawals was available with the assessee as cash in hand and were deposited again in the bank account. In absence of any contrary material brought on record to disprove assessee’s claim, benefit of doubt has to be given to the assessee. 11. In view of the aforesaid, I delete the addition made of Rs.16,69,900/- under section 68 of the Act. 12. In the result, appeal is allowed. I.T.A.No.1394/Del/2020 7 Order pronounced in the open court on 28/12/2022 Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 28.12.2022 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi