Shri Rajinder Singh, New Delhi V. ACIT, New Delhi

ITA 1439/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3889 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Gift; Business income; Income from undisclosed sources; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 1439 /DEL/2017 : ASSTT. YEAR : 2011 - 1 2 RAJINDER SINGH, A - 54, GROUND FLOOR, GULMOHAR PARK, NEW DELHI - 110049 VS ACIT, CIRCLE - 24(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AATPS6764N ASSESSEE BY : SH. GAUTAM JAIN, ADV. & SH. PIYUSH KUMAR KAMAL, ADV. REVENUE BY : MS. ASHIMA NEB , SR. DR DATE OF HEARING : 11 .12 .201 7 DATE OF PRONOUNCEMENT : 06 .02 .201 8 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 21.02 .2017 OF LD. CIT(A) - 11 , NEW DELHI . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. TH E LEARNED AO AS WELL AS THE CIT(A) HAVE ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING THE ADDITION OF RS.26,55,000/ - EVEN THOUGH THE SAME IS SUPPORTED BY CASH FLOW STATEMENT AND BALANCE SHEET OF WHICH THE HON BLE DELHI HIGH COURT HAS TAKEN THE COGNIZANCE. 2. THE LEARNED AO AS WELL AS THE CIT(A) HAVE PROCEEDED ON SURMISES AND HAVE NOT TAKEN INTO CONSIDERATION PRAGMATIC VIEW OF THE MATTER. IT IS THEREFORE PRAYED THAT ADDITION MADE MAY KINDLY BE DELETED. 3. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPE AL RELATES TO THE SUSTENANCE OF ADDITION OF RS.26,55,000/ - MADE BY THE AO ON ACCOUNT OF CASH DEPOSIT ED IN BANK ACCOUNT. ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 2 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 17.09.2011 DECLARING AN INCOME OF RS.22,62,889/ - WHIC H WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON THE RETURNED INCOME. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE WAS NOT HAVING AN Y REGULAR SOURCE OF INCOME AND HAD EARNED INCOME FROM SHORT TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTIES. HE FURTHER OBSERVED THAT AN AIR INFORMATION WAS RECEIVED, WHICH REVEALED THAT THE ASSESSEE HAD MADE CASH DEPOSITS IN THE BANK A/C NO. 6350 AND 32 84 MAINTAINED WITH ICICI BANK AMOUNTING TO RS.14,95,000/ - AND RS.11,60,000/ - RESPECTIVELY AS PER THE FOLLOWING DETAILS: DATE PARTICULARS AMOUNT(RS.) 8 TH APRIL,2010 CASH DEPOSIT IN ICICI BANK A/ C NO. 6350 5,00,000/ - 13 TH MAY, 2010 CASH DEPOSIT HI ICICI BAN K A/ C NO. 6350 4,00,000/ - 28 TH JULY, 2010 CASH DEPOSIT IN ICICI BANK A/C NO. 6350 2,00,000/ - 3 RD AUGUST, 2010 CASH DEPOSIT IN ICICI BANK A/C NO. 6350 25,000/ - 3 1 ST AUGUST,2010 CASH DEPOSIT IN ICICI BANK A / C NO. 6350 1,50,000/ - 1 ST SEPTEMBER 2010 CASH DE POSIT IN ICICI BANK A/ C NO. 6350 2.00,000/ - 04 TH JANUARY 2011 CASH DEPOSIT IN ICICI BANK A/C NO. 6350 10,000/ - 04 LH MARCH 2011 CASH DEPOSIT IN ICICI BANK A/C NO. 6350 10,000/ - 19 - 07 - 2010 CASH DEPOSIT IN ICIC I BANK A/C NO. 3284 3,00,000/ - 24 - 07 - 2010 CASH DEPOSIT IN ICICI BANK A/C NO. 3284 2,50,000/ - 10 - 08 - 2010 CASH DEPOSIT IN ICICI BANK A/C NO. 3284 1,50,000/ - 12 - 08 - 2010 CASH DEPOSIT IN ICICI BANK A/C NO. 3284 3,00,000/ - 20 - 08 - 2010 CASH DEPOSIT IN ICICI BANK A/C NO. 3284 1,00,000/ - 27 - 08 - 2010 CASH DEP OSIT IN ICICI BANK A/C NO. 3284 60,000/ - GRAND TOTAL 26,55,000/ - 5. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSIT S IN HIS BANK ACCOUNTS. IN RESPONSE, THE ASSESSEE SUBMITTED THAT THERE WAS OPENING CASH BALANCE OF RS.49,30,572/ - AS ON 0 1.04.2010 IN HIS CASH BOOK AND THE DEPOSITS WERE MADE OUT OF THE SAID FUND. IT WAS FURTHER STATED THAT THE ASSESSEE HAD EARNED INCOME FROM SHORT TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTIES. ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 3 THE AO AGAIN ASKED THE ASSESSEE TO FURNISH THE SOURCE OF CAS H REF LECTED I N CASH BOOK AS OPENING BALANCE AND ALSO TO FURNISH TAX AUDIT REPORT OF ANY OF THE PREVIOUS YEAR, JUSTIFYING THE CASH IN CASH BOOK. IN RESPONSE, THE ASSESSEE FURNISHED THE CASH BOOKS FOR THE ASSESSMENT YEARS 2008 - 09 TO 2011 - 12 AND ALSO FURNISHE D FINAL ACCOUNT OF THE PROPRIETORSHIP OF THE FIRM NAMELY, M/S TRADE INDIA FOR THE PERIOD FROM 01.04.2008 TO 31.03.2010. THE CASH POSITION OF THE ASSESSEE EMERGED AS UNDER: SR. NO. AY CASH IN HAND TOTAL CASH IN HAND INDIVIDUAL CAPACITY PROP. FIRM 1 2008 - 09 (AS ON 3 1.03.2008) 46,03,075/ - 797842/ - RS. 54,00,917/ - 2 2009 - 10 (AS ON 3 1.03.2009) 53,48, 524/ - 1397198 / - RS. 67,45,722/ - 3 2010 - 11 (AS ON 31.03 .2010) 49,62,269/ - 31697/ - RS. 49,62,269/ - 6. THE AO ASKED THE ASSESSEE TO PROVIDE THE COPY OF WEALTH TAX RETURN S FOR THE ASSESSMENT YEARS 2008 - 09 TO 2010 - 11 SHOWING CASH IN HAND AND PAYMENT OF WEALTH TAX THERETO. THE AO OBSERVED THAT THE ASSESSEE FAILED TO FILE THE WEALTH TAX RETURN S FOR THE ABOVE MENTIONED ASSESSMENT YEARS AND THAT NO ASSESSMENT W AS FRAMED U/S 143(3 ) OF THE ACT PRIOR TO THIS YEAR, T HUS, THE ASSESSEE FAILED TO PROVIDE SATISFACTORY EXPLANATION AS TO THE NATURE AND SOURCE OF THE SUM FOUND CREDITED IN HIS BOOK S . HE, THEREFORE, TREATED THE CASH DEPOSITS IN ICICI BANK AMOUNTING TO RS.26, 65,000/ - AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE S AND MADE THE ADDITION. 7. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: IN REGARD TO YOUR REQUIREMENTS, IT IS SUBMITTED AS UNDER: 1. COPY OF ACKNOWL EDGEMENT OF RETURNS FOR ASSESSMENT YEARS 2008 - 09 TO 2011 - 12 ARE ATTACHED ALONGWITH COMPUTATION OF ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 4 INCOME, BALANCE SHEET AND TRADING & PROFIT AND LOSS A/C. IF THERE WAS BUSINESS, FOR EACH OF THESE YEARS. 2. THE APPELLANT IS ENGAGED IN BUSINESS UNDER NAME M /S. TRADE INDIA AND HE HAS SHOWN SAME IN YEARS IN WHICH HE RECEIVED ORDERS ETC. DURING THE YEAR UNDER CONSIDERATION, HE HAD NO BUSINESS AS NO ORDER OR WORK WAS RECEIVED. THE APPELLANT PREPARED BALANCE SHEET EVERY YEAR. HOWEVER IN YEAR IN WHICH HE HAS BUS INESS, BALANCE SHEET IS ALSO PREPARED SEPARATELY FOR BUSINESS WHICH, IS ALSO REFLECTED IN PERSONAL BALANCE SHEET PREPARED FOR EACH YEAR. SINCE AS PER INSTRUCTIONS, NO ENCLOSURES ARE FILED WITH RETURNS, IT CANNOT BE SAID THAT BALANCE SHEET WAS ALSO FILED WI TH RETURN BUT POSSIBLY THE DETAILS OF BALANCE SHEET MAY BE AVAILABLE IN RETURN FOR WHICH THE ASSESSEE HAS NO RECORD. HOWEVER AS SAID ABOVE HE PREPARES AND HAS GOT BALANCE SHEET FOR EVERY YEAR. 3. THE CASH AVAILABLE AT THE END OF THE YEAR IS CLEAR FROM CAS H FLOW STATEMENT, COPIES OF WHICH FOR EACH YEAR ARE ATTACHED. 4. PRIOR TO ASSESSMENT YEAR 2011 - 12, THERE WAS NO SCRUTINY ASSESSMENT. 5. COPIES OF FOLLOWING 6 BANK ACCOUNTS ARE ATTACHED: A) COPY OF THE ICICI BANK ACCOUNT NO. 3284. B) COPY OF ICICI BANK A CCOUNT NO. 6350 C) COPY OF ICICI BANK ACCOUNT NO. 00697 D) COPY OF ICICI BANK ACCOUNT NO. 0069 8 E) COPY OF OBC BANK ACCOUNT. F) COPY OF HDFC BANK ACCOUNT. G) IN REGARD TO GROUND OF APPEAL, THE ONL Y POINT INVOLVED IS ADDITION OF RS.26,55,000 / - DEPOSITED IN THE BANK, AS DETAILED IN THE ASSESSMENT ORDER. SOURCES FOR THIS CASH ARE CLEAR FROM CASH FLOW STATEMENT WHICH IS ALREADY ATTACHED AS STATED IN PARA 3 SUPRA. IN SUPPORT OF THIS COPY OF CA SH BOOK FOR THIS YEAR IS ALSO ATTACHED. H) IT IS SETTLED LAW AND AS PER ACCOUNTANCY PRINCIPLES WHERE THE DEPOSITS ARE AS PER CASH FLOW STATEMENT, THE SAME SHOULD BE ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 5 ACCEPTED. FOR THIS RELIANCE IS PLACED ON HON'BLE DELHI HIGH COURT JUDGMENT REPORTED AT 291 ITR 36. I ) IT IS, THEREFORE, PRAYED THAT THE ABOVE ADDITION MADE BY THE LEARNED A.O. MAY KINDLY BE DELETED.' 8. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS NOT HAVING ANY BUSINESS DURING THE YEAR UNDER CONSIDERATION AS NO ORDER FOR WORK WAS RECEIVED BY HIM. IT WAS STATED THAT THE ASSESSEE WAS PREPARING BALANCE SHEET ON REGULAR BASIS BUT THE SAME WAS NOT FILED WITH THE RETURN OF INCOME AND THAT THE CASH DEPOSITS HAD BEEN MADE OUT OF THE BROUGHT FORWARD CASH IN HAND WHICH WAS REFLECTED IN THE BALANCE SH EET OF THE ASSESSEE. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS KULWANT RAI REPORTED AT (2007) 291 ITR 36. 9. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HA D MADE THE DEPOSITS ON 14 DIFFERENT DATES FROM APRIL 2010 TO MARCH 2011 AND THE AMOUNTS DEPOSITED VARY FROM RS.10,000/ - TO RS.5,00,000/ - AND THAT THE TOTAL AMOUNT DEPOSITED IN TWO BANK ACCOUNTS WAS RS.26,55,000/ - . THE LD. CIT(A) FURTHER OBSERVED THAT THE A SSESSEE WAS NOT HAVING ANY REGULAR SOURCE OF INCOME ALTHOUGH HE WAS ENGAGED IN THE BUSINESS UNDER THE NAME OF M/S TRADE INDIA AND THE RETURNS FILED BY THE ASSESSEE FOR THE EARLIER YEARS REVEALED THAT HE WAS HAVING SMALL TYPE CONSTRUCTION AND FABRICATION BU SINESS AND THAT DURING THE YEAR UNDER CONSIDERATION NO ORDER FOR WORK WAS RECEIVED BY THE ASSESSEE. THE LD. CIT(A) ALSO OBSERVED THAT THE ASSESSEE WAS MAINTAINING AT LEAST SIX BANK ACCOUNTS WHICH REVEALED THAT ALL THE ACCOUNTS WERE BEING USED BY THE ASSESS EE ON REGULAR BASIS AND THERE WERE FREQUENT TRANSFER OF FUNDS THROUGH ISSUE OF CHEQUES AND ELECTRONIC CLEARING SERVICES (ECS). HE FURTHER OBSERVED THAT THE BANK STATEMENT S REVEALED THAT THE ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 6 ASSESSEE HAD FR EQUENTLY WITHDRAWN CASH FROM THO SE BANK ACCOUNTS US ING ATM CARDS , THE AMOUNTS WITHDRAWN VARY FROM RS.500/ - TO 10,000/ - AND SUCH CASH WITHDRAWALS THROUGH ATM WERE BEING MADE AFTER EVERY FEW DAYS , EVERY MONTH ON REGULAR BASIS FROM VARIOUS ACCOUNTS. THEREFORE, IT WAS QUITE OBVIOUS TH AT THE ASSESSEE WAS NOT SH Y OF U S ING BANK ACCOUNTS FOR HIS FINANCIAL TRANSACTIONS AND NOTHING WAS BROUGHT ON RECORD WHICH COULD EXPLAIN THE CONDUCT OF THE ASSESSEE FOR KEEPING HUGE AMOUNTS OF CASH IN HAND AND DEPOSITING THE SAME IN BANK AS SOON AS IT WAS RECEIVED . THE LD. CIT(A) OB SERVED THAT EVEN IF, IT WAS TO BE ACCEPTED THAT THE CASH WAS DEPOSITED OUT OF THE BROUGHT FORWARD CASH FROM EARLIER YEARS, IT WAS NOT UNDERSTOOD AS TO WHY THE WHOLE CASH AVAILABLE WITH THE ASSESSEE HAD NOT BEEN DEPOSITED AT ONE GO AND WHY THE CASH HAD BEEN DEPOSITED IN VARIOUS INSTALLMENTS IN DIFFERENT BANK ACCOUNTS AND THAT TOO OVER A PERIOD OF ONE YEAR RANGING FROM 8 TH APRIL 2010 TO 4 TH MARCH 2011. THE LD. CIT(A) HELD THAT THE ASSESSEE WAS MERELY MAKING AN EXCUSE BY STATING THAT THE CASH WAS DEPOSITED FRO M THE BROUGHT FORWARD CASH IN HAND AND THE BEHAVIOR OR THE CONDUCT OF THE ASSESSEE WAS NOT COHERENT WITH THE MANNER IN WHICH A PRUDENT MAN WILL BEHAVE IN SIMILAR CIRCUMSTANCES. THEREFORE, BY APPLYING THE TEST OF HUMAN PROBABILITIES, IT WAS DIFFICULT TO ACC EPT THAT A PERSON HAVING SIX BANK ACCOUNTS, HUGE CASH IN HAND FOR A LONG PERIOD AND WHEN HE DECIDED TO DEPOSIT THE SAME IN THE BANK, DID SO IN VARIOUS INSTALLMENTS ON VARIOUS DATES IN AMOUNTS RANGING FROM RS.10,000/ - TO RS.5,00,000/ - . THE LD. CIT(A) ALSO O BSERVED THAT THE ASSESSEE CLAIMED TO HAVE HUGE AMOUNTS OF CASH AVAILABLE WITH HIM AT ALL TIMES, STILL SEEN TO WITHDRAW MEAGER AMOUNTS OF CASH THROUGH ATMS FROM HIS DIFFERENT BANK ACCOUNTS. IN SUCH A SITUATION, EVALUATION OF THE EVIDENCE AND DECISION MAKING COULD BE DONE BASED ON THE SURROUNDING CIRCUMSTANCES AND BY APPLYING THE TEST OF HUMAN PROBABILITIES. THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO BY OBSERVING IN PARAS 4.2.6 TO 4.2.10 AS UNDER: ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 7 4.2.6 IN THE PRESENT CASE, THE CIRCUMSTANCES ENUMER ATED ABOVE RELATING TO THE REGULAR USE OF VARIOUS BANK ACCOUNTS BY THE APPELLANT CLEARLY ESTABLISH THAT THE APPELLANT DOES NOT HAVE ANY REASON TO KEEP LARGE AMOUNTS OF CASH IN HAND. MOREOVER, THE FREQUENT CASH WITHDRAWALS THROUGH ATM IN THE LIGHT OF CLAIM OF HUGE CASH AVAILABILITY DOES NOT ACCORD WITH HUMAN PROBABILITIES. FURTHER, THE APPELLANT HAS FAILED MISERABLY TO DISCHARGE HIS ONUS TO PROVE THE GENUINENESS OF HIS CLAIMS. THE BALANCE SHEETS AND THE CASH BOOKS ETC. PRODUCED BY THE APPELLANT ARE NOTHING B UT SELF SERVING DOCUMENTS. FROM THIS, IT IS QUITE APPARENT THAT THE CASH DEPOSITS IN THE BANK ACCOUNTS HAVE BEEN MADE FROM THE INCOME EARNED BY THE APPELLANT FROM UNDISCLOSED SOURCES. 4.2.7 THE TEST OF HUMAN PROBABILITIES AND SURROUNDING CIRCUMSTANCES WHE N APPLIED TO THE CONDUCT OF THE APPELLANT WHEREIN HE IS SEEN TO BE WITHDRAWING MEAGER AMOUNTS OF RS.500 - RS.10000/ - AT REGULAR INTERVALS THROUGH ATM ALSO ESTABLISHES THE FACT THAT THE APPELLANT WAS NOT IN POSSESSION OF ANY BROUGHT FORWARD CASH IN HAND. HA D IT BEEN SO WHAT WAS THE NEED FOR FREQUENT CASH WITHDRAWALS OF SMALL AMOUNTS OF CASH BY THE APPELLANT? FROM THE ABOVE DISCUSSION, IT IS CLEARLY ESTABLISHED THAT THE REQUIREMENT OF PREPONDERANCE OF PROBABILITY IS FULFILLED WITH REGARD TO ESTABLISHING THAT THE APPELLANT WAS NOT HAVING ANY BROUGHT FORWARD CASH BALANCE TO JUSTIFY THE SOURCE OF CASH DEPOSITS IN HIS BANK ACCOUNTS. 4.2.8 THE TEST OF HUMAN PROBABILITY OFTEN COMES INTO PRACTICE IN CASES OF LARGE CASH DEPOSITS, CASH EXCESSES, BOGUS GIFTS, CASH GIFT S, INADEQUATE HOUSEHOLD WITHDRAWALS ETC. IN ONE OF ITS SPECIAL KINDS, THE TEST OF HUMAN PROBABILITY MADE AN ASSESSEE PAY HUGE AMOUNT OF TAX IN SOM NATH MAINI (2008) 30 6 ITR 414 (P&H). IN THIS CASE THE ASSESSEE IN HIS RETURN DECLARED LOSS FROM SALE OF GOLD JEWELLERY AND ALSO DECLARED A SHORT TERM CAPITAL GAIN FROM SALE OF SHARES SO THAT THE TWO ALMOST MATCH EACH OTHER. THIS SIMPLE TAX PLANNING BECAME INEFFECTIVE AFTER THE ASSESSING OFFICER DISBELIEVED THE ASTRONOMICAL SHARE PRICE INCREASE APPLYING THE TEST O F HUMAN PROBABILITY. THE AO OBSERVED THAT SHORT TERM CAPITAL GAINS WERE NOT GENUINE IN AS MUCH AS THE ASSESSEE HAD PURCHASED 45000 SHARES OF M/S ANKUR INTERNATIONAL LTD. AT VARYING RATES FROM RS. 2.06 TO RS, 3.1 PER SHARE AND SOLD THEM WITHIN A SHORT SPAN OF SIX - ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 8 SEVEN MONTHS AT THE RATE VARYING FROM RS. 47.75 PAISA TO RS.55. EVEN THOUGH THE TWO RESPECTIVE TRANSACTIONS FOR PURCHASE AND SALE OF SHARES IS ROUTED THROUGH TWO DIFFERENT BROKERS THE A O DID NOT BELIEVE THE ASTRONOMICAL RISE IN SHARE PRICE OF A COM PANY FROM RS.3 TO RS.55 IN A SHORT TERM. THE ASSESSEE LOST ITS CASE BEFORE THE TRIBUNAL. CONFIRMING THE ORDER OF THE TRIBUNAL, THE P & H HIGH COURT HELD THAT THE BURDEN OF PROVING THAT INCOME IS SUBJECT TO TAX IS ON THE REVENUE BUT ON THE FACTS, TO SHOW T HAT THE TRANSACTION IS GENUINE, BURDEN IS PRIMARILY ON THE ASSESSEE. AS PER THE COURT, THE AO IS TO APPLY THE TEST OF HUMAN PROBABILITIES FOR DECIDING GENUINENESS OR OTHERWISE OF A PARTICULAR TRANSACTION. MERE LEADING OF THE EVIDENCE THAT THE TRANSACTION W AS GENUINE, CANNOT BE CONCLUSIVE. ANY SUCH EVIDENCE IS REQUIRED TO BE ASSESSED BY THE AO IN A REASONABLE WAY. GENUINENESS OF THE TRANSACTION CAN BE REJECTED EVEN IF THE ASSESSEE LEADS EVIDENCE WHICH IS NOT TRUST - WORTHY, EVEN IF THE DEPARTMENT DOES NOT LEAD ANY EVIDENCE ON SUCH AN ISSUE. 4.2.9 IN ADDITION TO THE 'REASONABLENESS' FACTOR AS QUOTED BY THE P & H HIGH COURT IN THE SUPRA, THERE IS ALSO THE 'RATIONALE THINKING' FACTOR WHICH HELPS IN APPLYING THIS TEST OF HUMAN PROBABILITIES. IN THE PRESENT CASE, A LL THE SURROUNDING CIRCUMSTANCES DISCUSSED IN DETAIL ABOVE LEAD ME TO BELIEVE THAT THE APPELLANT HAS FAILED TO PROVE SATISFACTORILY THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNTS. 4.2.10 THEREFORE, BASED UPON ALL THE FACTS, THE SURROUNDING CIRCUMSTANCES AND THE TEST OF HUMAN PROBABILITIES ALONG WITH THE LEGAL POSITION AS DISCUSSED ABOVE, 1 AM OF THE OPINION THAT THE SOURCE OF THE CASH DEPOSITS IN THE BANK ACCOUNTS OF THE APPELLANT REMAINS UNEXPLAINED AND HENCE, THE ADDITION MADE BY THE AO TREATING THE SA ME AS INCOME FROM UNDISCLOSED SOURCES IS HEREBY CONFIRMED AND THE GROUND OF APPEAL IS DISMISSED. 10. THE RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASE LAWS: SMT. SHELLY PASSI, KUDHIANA VS ASSESSEE (2012) ITAT CHANDIGARH IN ITA NO. 1151/CHD./2011 RAM LUBHAYA VS ACIT 52 TTJ 21 (ITAT DEL.) ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 9 SUMATI DAYAL VS CIT 214 ITR 801 (SC) CIT VS DURGA PRASAD MORE (1971) 82 ITR 540 (SC) HERSH WIN CHADHA IN ITA NOS. 3088 TO 3098 & 3107/DEL/2005 (ITAT DEL.) 11. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASS ESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AO HIMSELF ADMITTED IN PARA 4.2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE FURNISHED CASH BOOK HAVING OPENING BALANCE OF RS.49,30,572 AS ON 01.04.2010 AND CAS H WAS DEPOSITED OUT OF THE SAID FUND. HE FURTHER SUBMITTED THAT THE AO ACCEPTED THE DEPOSITS IN ORIENTAL BANK OF COMMERCE AND HDFC BANK BUT DOUBTED THE DEPOSITS OF ICICI BANK ONLY BUT THAT TOO WITHOUT BRINGING ANY MATERIAL ON RECORD. OUR ATTENTION WAS DRAW N TOWARDS PAGE NOS. 26 TO 50 OF THE ASSESSEE S PAPER BOOK WHICH ARE THE BANK STATEMENT S OF VARIOUS BANKS . IT WAS FURTHER SUBMITTED THAT THE A O HAD NOT DISPUTED THE CASH BOOK FURNISHED BY THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS KULWANT RAI REPORTED AT (2007) 291 ITR 36. 12. IT WAS FURTHER SUBMITTED THAT NON - FILING OF THE WEALTH TAX RETURN BY THE ASSESS EE WOULD NOT BE A GROUND TO REJECT THE SOURCE OF THE DEPOSIT FURNISHED BY THE ASSESSEE WHICH WAS ESSENTIALLY OUT OF BANK WITHDRAWALS AND WAS ESTABLISHED THROUGH CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE. THEREFORE, THE ADDITION SUSTAINED BY THE LD. CIT (A) WAS NOT JUSTIFIED. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT VS BALDEV RAJ CHARLA 334 ITR 129 (DEL.) COCO COLA CORPORATION VS ITO 231 ITR 200 (SC) CHARANDAS HARIDAS & ANOTHER VS CIT 39 ITR 202 (SC) ACIT VS BALDEV RAJ CHARLA & ORS.N 121 TT J 366 (DEL.) ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 10 MANSUKLAL RATANLAL JAIN (CHOPRA) VS UOI 300 ITR 98 (MP) 13. IT WAS FURTHER SUBMITTED THAT EVEN THE LD. CIT(A) FAILED TO APPRECIATE THAT ONCE TOTAL CASH DEPOSITED IN THE BANK ACCOUNT AGGREGATED TO RS.41,75,900/ - OUT OF WHICH, RS.15,20,900/ - AS PER FOLLOWING DETAILS WERE TREATED AS EXPLAINED AND ACCEPTED: SR. NO. BANK ACCOUNT AMOUNT (RS.) 1. OBC BANK 8,22,400 2. ICICI 3,73,000 3. ICICI 3,25,500 14. IT WAS STATED THAT THE ASSESSEE HAD BEEN REGULARLY WITHDRAWING CASH AND DEPOSITING CASH YEAR AFTER YEAR WHICH CLAIM HAD NEVER BEEN FOUND TO BE OTHERWISE AND THUS ATTRIBUTE TO THE CONTRARY IN THE PRESENT YEAR WAS APPARENTLY UNTENABLE. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: UNION OF INDIA VS BRITISH INDIA CORPORATION 268 ITR 481 (SC) CI T VS JAYANTKUMAR MOTICHAND DOSHI 217 TAXMANN 247 (GUJ.) CIT VS MOHAN LAL AGARWAL 217 TAXMAN 29 (ALL) CIT VS ILLABEN JAYANT KUMAR DOSHI , ITA NO. 564/2012 (GUJ.) 15. AS REGARDS TO THE CASES RELIED BY THE LD. CIT(A), THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT FACTS OF THOSE CASES WERE DISTINGUISHABLE FROM THE FACTS OF THE ASSESSEE S CASE. IT WAS ALSO STATED THAT THE SOURCE OF CASH DEPOSITS BY THE ASSESSEE WERE WITHDRAWALS FROM THE BANKS AND THER E WAS INCOME DECLARED IN THE SHAP E OF SALES IN THE BUSINESS OF M/S TRADE INDIA , YEAR AFTER YEAR AND THERE WAS ALSO SALE OF PROPERTIES IN THE EARLIER YEARS. 16. IN HER RIVAL SUBMISSION, THE LD. SR. DR REITERATED THE OBSERVATIONS MADE BY THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT EXPLAIN THE REASON FOR DEPOSITING THE AMOUNT THROUGHOUT THE YEAR WHEN HE WAS HAVING SIX BANK ACCOUNTS AND THERE WAS NO REGULAR INCOME AVAILABLE TO THE ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 11 ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS FULLY JUSTIFIED. RELIANCE W AS PLACED ON THE JUDGMENT OF THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KAVITA CHANDRA VS CIT(A) & OTHERS IN ITA NO. 21/2016 (COPY OF WHICH IS PLACED ON THE RECORD). 17. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MAT ERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD SHOWN INCOME UNDER THE HEAD S LONG TERM CAPITAL GAIN AND BUSINESS INCOME . THE ASSESSEE CLAIMED THAT HE WAS HAVING OPENING CASH BALANCE OF RS.49,30,572/ - AS ON 01.04.2010 OUT OF THE SAID CASH BALANCE , T HE ASSESSEE DEPOSITED THE CASH IN VARIOUS BANKS I.E. ORIENTAL BANK OF COMMERCE, HDFC BANK AND ICICI BANK. THE AO ACCEPTED THE BANK DEPOSITS IN OBC AMOUNTING TO RS.8,22,400/ - AND ALSO ACCEPTED THE DEPOSITS OF RS.6, 98,500/ - IN ICICI BANK ALTHOUGH THE SOURCE OF THE DEPOSITS WAS SAME WHICH WAS RELATING TO THE IMPUGNED DEPOSITS OF RS.26,55,000/ - I.E. THE CASH IN HAND AVAILABLE WITH THE ASSESSEE FROM THE EARLIER YEARS WHICH WAS CLAIMED TO BE GENERATED FROM TIME TO TIME W ITHDRAWALS FROM THE BANK ACCOUNT S AND THE SALE OF THE PROPERTIES FROM WHICH SHORT TERM CAPITAL GAIN WAS EARNED BY THE ASSESSEE. THE AO DID NOT DOUBT THE AVAILABILITY OF THE CASH IN HAND AMOUNTING TO RS.49,30,572/ - AS ON 01.04.2010. HE HAD ALSO NOT DOUBTED THE SALE OF THE PROPERTIES BY THE ASSESSEE. HOWEVER, H E MADE THE ADDITIONS ONLY ON THIS BASIS THAT THE ASSESSEE HAS NOT FILED THE WEALTH TAX RETURN S, BUT NOTHING WAS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE OPENING CASH IN HAND AVAILABLE WITH THE ASSESSE E AS ON 01.04.2010 WAS UTILIZED ELSEWHERE AND NOT IN DEPOSITING IN THE BANK ACCOUNTS. MOREOVER, THE AO ACCEPTED DEPOSITS OF RS.15,20,900/ - OUT OF THE SAME CASH IN HAND BUT DOUBTED THE DEPOSITS OF RS.26,55,000/ - WITHOUT BRINGING ANY COGENT MATERIAL ON RECOR D TO SUBSTANTIATE THAT THE OPENING CASH IN HAND AVAILABLE WITH ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 12 THE ASSESSEE WAS USED ELSEWHERE AND NOT UTILIZED FOR DEPOSITING SUCH AMOUNTS OF RS.26,55,000/ - IN THE BANK ACCOUNT. 18. ON A SIMILAR ISSUE, THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS KULWANT RAI (SUPRA) HELD AS UNDER: 16. THIS CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER WHICH IS ON THE BASIS OF SUSPICION THAT THE ASSESSEE MUST HAVE SPENT THE AMOUNT FOR SOME OTHER PURPOSES. THE ORDERS O F THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER OF INCOME - TAX ARE COMPLETELY SILENT AS TO FOR WHAT PURPOSE THE EARLIER WITHDRAWALS WOULD HAVE BEEN SPENT. AS PER THE CASH BOOK MAINTAINED BY THE ASSESSEE, A SUM OF RS.10,000 WAS BEING SPENT FOR HOUSEHOLD EXPENSES EVERY MONTH AND THE ASSESSEE HAS WITHDRAWN FROM BANK A SUM OF RS. 2 LAKHS ON DECEMBER 4, 2000 AND THERE WAS NO MATERIAL WITH THE DEPARTMENT THAT THIS MONEY WAS NOT AVAILABLE WITH THE ASSESSEE. IT HAS BEEN HELD BY THE TRIBUNAL THAT IN THE INSTANT C ASE THE WITHDRAWALS SHOWN BY THE ASSESSEE ARE FAR IN EXCESS OF THE CASH FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. NO MATERIAL HAS BEEN RELIED UPON BY THE ASSESSING OFFICER OR THE COMMISSIONER OF INCOME - TAX (APPEALS) TO SUPPORT THEIR VIEW THAT THE ENTI RE CASH WITHDRAWALS MUST HAVE BEEN SPENT BY THE ASSESSEE AND ACCORDINGLY, THE TRIBUNAL RIGHTLY HELD THAT THE ASSESSMENT OF RS. 2.5 LAKHS IS LEGALLY NOT SUSTAINABLE UNDER SECTION 158BC OF THE ACT AND THE SAME WAS RIGHTLY ORDERED TO BE DELETED. 19. IN THE PRESENT CASE ALSO, THE AO HAS NOT BROUGHT ON RECORD THAT THE CASH IN HAND AVAILABLE WITH THE ASSESSEE WAS NOT UTILIZED FOR DEPOSITING IN THE VARIOUS BANK ACCOUNT. PARTICULARLY WHEN, THE AO HIMSELF ACCEPTED THE DEPOSITS OF RS.15,20,900/ - IN VARIOUS BANK ACC OUNTS OUT OF THE SAID CASH IN HAND AVAILABLE WITH THE ASSESSEE, SO THERE WAS NO OCCASION TO DOUBT THE DEPOSITS OF RS.26,55,000/ - OUT OF THE CASH IN HAND AMOUNTING TO RS.49,30,572/ - AVAILABLE WITH THE ASSESSEE AS ON 01.04.2010. I, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, DELETE THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A). ITA NO . 1439 /DEL /201 7 RAJINDER SINGH 13 2 0 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . (ORD E R P RON OUNCED IN THE COURT ON 06 /02 /201 8 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 06 /02 /2018 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR