VIKRAM DEOKISAN SARDA, MUMBAI V. ASST CIT 12(3)(2), MUMBAI

ITA 277/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9475 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 13-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 11-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PAL SINGH
• Keywords: Unexplained cash credit; Gift; Search and seizure; Principle of natural justice; Transactions in derivatives; Additional evidence; Corroborative evidences
• Section: 143(3); 133(6); 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.277/M/2012 ASSESSMENT YEAR:2008-2009 SHRI VIKRAM DEOKISAN SARDA, G-3 MANEK MAHAL, 90 VEER NARIMAN ROAD, CHURCHGATE, MUMBAI-400020. PAN:ABLPS 4487P VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, 12(3)(2), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAYUR KISNADWALA RESPONDENT BY : SHRI AJAY PAL SINGH, DR DATE OF HEARING: 19.10.2012 DATE OF ORDER: 5.12.2012 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 11.1.2012 IS D IRECTED AGAINST THE ORDER OF CIT(A)-23, MUMBAI DATED 2.11.2011 FOR THE ASSESSMEN T YEAR 2008-2009. 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. 1. WITHOUT CONSIDERING LAW, FACTS AND CIRCUMSTANCES OF THE CASE, THE ACIT, CIRCLE-12(3)(2), MUMBAI HAS ERRED IN ASSESSIN G INCOME RETURNED BY THE ASSESSEE OF RS. 12,51,010/- AT A HIGHER AMOUNT O F RS. 3,34,64,070 /- AND THE LD CIT (A)-23 HAS ERRED IN CONFIRMING THE SAME. 2. WITHOUT CONSIDERING FACTS AND CIRCUMSTANCES OF T HE CASE AND THE LAW OBTAINING, THE ACIT, CIRCLE-12(3)(2), MUMBAI HAS ERRED IN TREATING CASH DEPOSITS MADE OUT OF WITHDRAWALS FROM BANK ACCOUNTS, AS UNEXPLAINED CASH CREDIT UNDER PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961, AMOUNTING TO RS. 3,22,63,100/- AND T HE LD CIT (A)-23, HAS ERRED IN CONFIRMING THE SAME. 3. THE ACIT, CIRCLE-12(3)(2), MUMBAI HAS ERRED IN M AKING ASSESSMENT UNDER SECTION 143(3) DATED 30.12.2010 IN COMPLETE D ISREGARD TO FACTS AND EVIDENCE IN THE FORM OF BANK PASS BOOKS AND BOOKS OF A CCOUNT AND THE LD CIT (A)-23, HAS ERRED IN CONFIRMING THE SAME . 4. THE ORDER UNDER SECTION 143(3) DATED 2.11.2011 P ASSED BY THE ACIT, 12(3)(2), MUMBAI IS BAD IN LAW AND NEED TO BE SET A SIDE. 3. PRELIMINARY ISSUE ADDITIONAL EVIDENCE : SHRI MAYUR KISNADWALA, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE FILED ADDITIONAL EVIDENCE INVOKING THE PROVISIONS OF RULE 29 OF THE INCOME TAX RULES, 1962 AND PRAYED FOR ADMISSION OF THE SAME. THE SAID ADDITIONAL EVIDENCE RELATES TO THE CONFIRM ATION OF MR. VINOD SARAF DATED 2.7.2012 2 SHRI VIKRAM DEOKISAN SARDA AND IT IS RELEVANT IN CONNECTION WITH THE ADDITION OF CASH ADVANCE OF RS 15,11,000/-, WHICH IS CLAIMED TO HAVE BEEN PAID BY SRI SARAF IN THE CONT EXT OF A PROPOSED SALE OF LAND BY THE ASSESSEE AND THE LAND IS LOCATED AT KANNAMWAR, NASI K. THE EVIDENCE COULD NOT BE PRODUCED BEFORE THE REVENUE AUTHORITIES DUE TO NON-COOPERATI ON OF MR. VINOD SARAF AT THAT TIME. IN THIS REGARD, ASSESSEE ALSO FILED AN AFFIDAVIT WHICH WAS PLACED AT PAGE 240 OF THE PAPER BOOK. ASSESSEE PRAYED FOR ADMISSION OF THIS ADDITIONAL EV IDENCE IN THE INTEREST OF JUSTICE AND MENTIONED THESE EVIDENCE CONSTITUTES VERY CRUCIAL O NES AS THEY SUPPORTS THE CREDIBILITY OF THE EXPLANATION OF THE ASSESSEE QUA THE SOURCES OF THE CASH DEPOSITS FOUND IN THE BANK ACCOUNTS OF THE ASSESSEE. PER CONTRA, SHRI AJAY PAL SINGH, LD DR FOR THE REVENUE OPPOSED TO THE ADMISSION STATING THE ASSESSEE HAS NO RIGHT TO SUBMIT SUCH ADDITIONAL EVIDENCES AT THIS STAGE. REFERRING TO RELEVANT RULE 27 OF THE ITAT RU LES 1962, LD CIT DR MENTIONED THAT IT IS FOR THE TRIBUNAL TO DECIDE IF SUCH DOCUMENTS ARE RE QUIRED FOR ADJUDICATION OF THE APPEAL. FURTHER, LD DR MENTIONED THAT, IN CASE THE TRIBUNAL IDENTIFIES THE REQUIREMENT OF THESE PAPERS, THE ADDITIONAL EVIDENCES MUST BE SENT TO TH E FILES OF THE AO IN VIEW OF THE PRINCIPLES OF NATURAL JUSTICE. 4. WE HAVE PERUSED THE AFFIDAVIT DATED 29.6.2012 AN D ALSO THE LETTER DATED 2 ND JULY 2012 AND FIND THAT THE SAME CONSTITUTES CRUCIAL EVI DENCE FOR ESTABLISHING THE VERACITY OF THE VERSIONS OF THE ASSESSEE THAT THE CASH ON DEPOSITED IN THE BANK IS OUT OF THE CASH RECEIVED FROM THE LAND BUYERS SUCH AS MR SARAF AND ALSO THE ASSESSEES CLAIM THAT HE HAS MAINTAINED THE CASH WITH HIM ALWAYS FOR MEETING THE CASH REQUI REMENTS OF LAND DEALS PROPOSED TO BE ENTERED INTO BY THE ASSESSEE. CONSIDERING THE IMPOR TANCE OF THESE PAPERS, WE ARE OF THE OPINION, THAT THE SAID ADDITIONAL EVIDENCES ARE REQ UIRED AND THEREFORE, THEY ARE ADMITTED. 5. FURTHER, IT IS RELEVANT TO MENTION THAT THE AO M ADE ADDITION OF RS 3,22,63,100/- U/S 68 OF THE ACT AND IT INCLUDES THE ABOVE MENTIONED C ASH ADVANCE OF RS 15,11,000/- CLAIMED TO HAVE BEEN PAID BY SRI SARAF. DURING THE ASSESSM ENT PROCEEDINGS, ASSESSEE COULD NOT SUBMIT CONFIRMATION/AFFIDAVIT TO ESTABLISH THE GENU INENESS OF THE CASH TRANSACTION INVOLVING PROPOSED SALE OF LAND TO SRI SARAF. CONSIDERING THE INTEREST OF JUSTICE, WE HAVE ADMITTED THE SAID PAPERS AND REMANDED TO THE FILES OF THE AO MAK ING USE OF THE SAME IN THE SET ASIDE ASSESSMENT PROCEEDINGS. THEREFORE, THE SAID DOCUMEN TS ARE REQUIRED FOR ADMINISTRATION OF JUSTICE AND THEREFORE, WE CANNOT PROCEED TO ADJUDIC ATE THE CORRESPONDING ADDITION OF RS 15.11 LAKHS WITHOUT REMANDING THESE PAPERS TO THE F ILES OF THE AO. THUS, CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE, THE REVENUE OUGHT TO BE GIVEN AN OPPORTUNITY TO EXAMINE THE SAID ADDITIONAL EVIDENCES. ACCORDINGLY, ADDITIONAL EVIDENCES ARE ADMITTED AND REMANDED TO 3 SHRI VIKRAM DEOKISAN SARDA THE FILES OF THE AO FOR EXAMINING THEM AS WELL AS U SE OF THE SAME FOR DECIDING THE ISSUE AFRESH RELATING TO THE ADDITION OF RS 15,11,000/-, WHICH IS PART OF THE GROSS ADDITION OF RS. 3,22,63,100/-. THUS, THE PRELIMINARY ISSUE OF ADDITIONAL EVIDENCE IS DECIDED ACCORDINGLY . WE SHALL TAKE UP THE CORE ISSUES RAISED IN THE GROU NDS IN THE FOLLOWING PARAGRAPHS OF THIS ORDER. 6. WE SHALL NOW TAKE UP THE CORE ISSUES NARRATED IN THE GROUNDS RAISED BEFORE US. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME DECLARING THE INCOME AT RS. 12,51,010/-. ASSESSEE IS A DIRECTOR IN M/S. BASTIRAM NARAYANDAS SARDA PVT. LTD. AND M/S. SHRIRANG PRAKASAHAN PVT. L TD. ASSESSEE DECLARED THE INCOME ON ACCOUNT OF SALARY, HOUSE PROPERTY, TRADING IN FUTUR ES & OPTIONS (F&O), CAPITAL GAINS ETC AND MAINTAINS BANK ACCOUNTS IN VARIOUS BANKS. DURING T HE SCRUTINY ASSESSMENT, IN 14 BANK ACCOUNTS OF THE ASSESSEE, AO NOTICED REPEATED TRANS ACTIONS SHOWING THE CASH WITHDRAWALS AND DEPOSITS. SIMILARLY, THERE ARE CASH WITHDRAWALS /DEPOSITS FROM/INTO THE COMPANYS BOOKS OF ACCOUNT TOO. AS A RESULT OF THE SCRUTINY U/S 143 (3) OF THE ACT, AO MADE ADDITION OF RS. 3,22,63,100/- AS AN UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT. BEFORE MAKING ADDITIONS, AO REQUESTED THE ASSESSEE TO FURNISH THE EVIDENCES IN SUPPORT OF THE ALLEGED CASH CREDITS. IN RESPONSE, ASSESSEE FURNISHED WRITTEN EX PLANATION DATED 19.11.2010 WHICH SAYS THAT THE SAID CASH WITHDRAWALS REFERRED TO WERE MAD E TO MEET (I) THE HOUSE HOLD EXPENSES, (II) COMPANYS EXPENDITURE ON REIMBURSEMENT BASIS A ND (III) THE CASH REQUIREMENTS OF THE LAND DEALS ETC. THE SOURCES FOR THE DEPOSITS INCLUD E THE UNSECURED LOANS/REFUNDS, CASH ADVANCES RECEIVED IN CONNECTION WITH LAND DEALS, CA SH WITHDRAWALS FROM OTHER BANK ACCOUNTS OF THE ASSESSEE AND THE COMPANY. REFERRING TO THE C ASH WITHDRAWALS, ASSESSEE MENTIONED THAT THE UNUSED CASH WITHDRAWN OUT OF THE SAID ACCO UNTS OF BOTH THE ASSESSEE AND THE COMPANY WAS RE-DEPOSITED. EXPLAINING ABOUT THE CASH ADVANCES RECEIVED FROM PROSPECTIVE BUYERS, ASSESSEE MENTIONED THAT THERE ARE OCCASIONS OF UN-FRUCTIFIED TRANSACTIONS OF LAND DEALS. REFERRING TO THE HUGE CASH ON HAND, LD COUNS EL MENTIONED THAT THE SAME WAS MAINTAINED TO MEET THE CONTINGENCIES CONNECTED TO T HE LAND DEALS AGAIN AND WHEN THE SAID REQUIREMENTS ARE NOT THERE, THE SAID CASH WAS DEPOS ITED INTO THE BANK. HOWEVER, AO OBSERVED THAT THE ASSESSEES REQUIREMENT FOR MEETIN G HOUSE-HOLD EXPENSES DOES NOT MATCH THE CASH IN HAND AND QUESTIONED THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT THE CLAIMS. FURTHER, AO FOUND THAT THE ASSESSEE HAS NOT MADE ANY INVESTMENT IN LAND DURING THE YEAR AND QUESTIONED THE ASSESSEES EXPLANATION AND THE SAME CONSTITUTES A MAKE BELIEF STORY IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE. O N 28.12.2010, ASSESSEE FURNISHED THE SUMMARY OF CASH TRANSACTIONS REGARDING WITHDRAWALS AND DEPOSIT OF CASH IN THE B ANK 4 SHRI VIKRAM DEOKISAN SARDA ACCOUNTS. BASED ON THESE PAPERS, AO SCRUTINIZED SO ME TRANSACTIONS AND CAME TO THE OPINION THAT THE CASH WITHDRAWAL HAS NOTHING TO DO WITH THE CASH DEPOSITS. AS PER THE DISCUSSION GIVEN IN PARA 4.6 OF THE IMPUGNED ORDER, AO HAS NOTICED THAT ASSESSEE WITHDREW THE CASH AMOUNTING TO RS. 3,22,63,100/- AND THE SAM E WAS DEPOSITED IN THE BANK AS CASH DEPOSIT. HE DISCUSSED THE AVAILABILITY OF ATM MACHI NES FOR CASH WITHDRAWALS IN CASES OF CASH REQUIREMENTS AND URGENCIES FOR MEETING THE URGENT C ASH REQUIREMENTS IN THE ALLEGED LAND DEALINGS. FINALLY, AO TREATED THE WHOLE CASH CREDIT S AS UNEXPLAINED AND MADE ADDITION U/S 68 OF THE INCOME TAX ACT. AGGRIEVED WITH THE SAME, ASSESSEE FILED AN APPEAL BEFORE CIT(A). 7. BEFORE CIT (A), ASSESSEE SUBMITTED THAT THERE IS QUANTITATIVE MATCHING OF CASH WITHDRAWALS AND THE CASH DEPOSITS AND THERE EXISTS SOURCES EXPLAINING THE CASH DEPOSITS AND IN SUCH CASE, THERE IS NO CASE FOR ADDITION U/S 68 OF THE ACT. FOR EVERY CASH DEPOSIT, THERE IS CORRESPONDING CASH WITHDRAWALS FROM ONE OR MORE BAN K ACCOUNTS OF EITHER ASSESSEE OR HIS COMPANY. ALL THESE ACCOUNTS ARE DISCLOSED IN THE BO OKS OF ACCOUNT. FURTHER, ASSESSEE REASONED THAT IT IS NOT CASE OF THE AO THAT THE SAI D CASH WITHDRAWN WAS USED BY THE ASSESSEE IN OTHER UNACCOUNTED ASSET AND SOURCES FOR CASH ON HAND DEPOSITED REFERS TO OTHER UNACCOUNTED ONES. FURTHER ASSESSEE SUBMITTED IN WRI TING THAT THE SAID CASH WAS WITHDRAWN FOR THE SPECIFIED REASONS IE MEETING THE CASH REQUI REMENTS OF THE PROPOSED/UNFRUCTIFIED LAND DEALS, MEETING THE EXPENDITURE OF THE COMPANY ON RE IMBURSEMENT BASIS AND ALSO TO MEET THE DOMESTIC NEEDS, AND THE AO HAS FAILED TO REBUT THE SAME. AS PER THE ASSESSEE, INITIAL ONUS WAS DISCHARGED AND THE AO HAS NOT DONE HIS DUT Y DESPITE ENORMOUS POWERS HE ENJOYED FROM THE ACT. FURTHER, QUESTIONING THE AO S DECISION OF MAKING ADDITIONS U/S 68 OF THE ACT, ASSESSEE MENTIONED THAT ALL THE 14 ACCOUNT S ARE UNDISPUTEDLY ACCOUNTED IN THE BOOKS OF ACCOUNT AND THE ENTRIES IN THE BANK PASS B OOKS AND THE COMPANY BOOKS SUPPORTS THE CASH WITHDRAWN AND DEPOSITING, THERE IS NO CASE OF SUCH ADDITION. SECTION 68 IS NOT APPLICABLE IN RESPECT OF THE CASH CREDITS APPEARING IN THE BOOKS AND ALL THESE ENTRIES ARE BORNE IN THE BOOKS IN THIS CASE. THE ASSESSEE ALSO MENTIONED THE TRANSACTION OF SALE OF FLAT AND WHICH IS ALSO A PART OF THE SOURCE FOR THE DEPO SITS. IN THIS REGARD, THE ASSESSEE CITED THE CASH RECEIPT OF RS 15,11,000/- TO SUPPORT THE ARGUM ENT. FURTHER, THE ASSESSEE SUBMITTED THAT IT IS THE ASSESSING OFFICER WHO FAILED TO ESTA BLISH THAT THE CASH WITHDREW WAS USED ELSEWHERE AND HE ALSO FAILED TO ESTABLISH THAT THE ASSESSEE WAS DOING ANY OTHER UNACCOUNTED BUSINESS BEFORE RESORTING TO MAKING ADD ITIONS ON ACCOUNT OF THE CASH CREDIT. ASSESSEE RELIED ON CERTAIN DECISIONS IN THE CASE CI T VS. TANIA INVESTMENTS (P) LTD. (2010) 322 ITR 394 (BOM) AND CIT VS. SURESHKUMAR THAKKAR ( 2010) 324 ITR 331 (DEL) FOR THE PROPOSITION THAT MERE DISBELIEF AS TO THE SOURCE OF THE DEPOSIT CANNOT BE A BASIS FOR THE 5 SHRI VIKRAM DEOKISAN SARDA ADDITION. HE ALSO RELIED ON THE OTHER DECISION AS DISCUSSED IN PARA 2.2 OF THE IMPUGNED ORDER. 8. ON HEARING ASSESSEES SUBMISSIONS, CIT (A) CAME TO THE CONCLUSION THAT THE ASSESSEE FAILED TO EXPLAIN THE REASONS FOR THE REPEATED CASH WITHDRAWAL AND DEPOSITS IN VARIOUS ACCOUNTS. FURTHER, SHE ALSO DID NOT ENTERTAIN THE A SSESSEES ARGUMENT THAT THE SAID CASH DEPOSITS ARE EXPLAINABLE BY THE CASH WITHDRAWALS MA DE BY THE ASSESSEE FOR MEETING THE HOUSE HOLD EXPENSES, THE COMPANYS EXPENDITURE AS W ELL AS THE CASH REQUIREMENTS NEEDED FOR PURCHASE/SALE OF PLOTS / IMMOVABLE PROPERTIES. CIT (A) NOTED THAT THE ASSESSEE FAILED TO FURNISH ANY DETAILS OF ANY EXPENSES OR REIMBURSEMEN T OF THE EXPENSES THAT ARE ASSERTED BY THE ASSESSEE. ASSESSEES EXPLANATION REGARDING HOUS E-HOLD EXPENSES WAS ALSO DISMISSED BY THE CIT (A). CIT (A) WAS CRITICAL OF THE ABSENCE O F ANY EVIDENCE IN RESPECT OF CASH RECEIPTS FROM ONE MR. RAJKUMAR MAHALE ALLEGED TO BE FOR FLAT PURCHASE TRANSACTION AND CIT (A) WAS ALSO CRITICAL OF THE ASSESSEES FAILURE TO FURNISH ANY EVIDENCE THAT AN AMOUNT WAS RECEIVED FROM SHRI VINOD SRAF AGAINST THE LAND. FURTHER, CI T (A) NOTED THE NO SUPPORTING EVIDENCE WAS PRODUCED BY THE ASSESSEE TO SUBSTANTIATE THAT A N AMOUNT OF RS. 15 LAKHS WAS RECEIVED FROM MR. SATISH MITHULAL TIWARI RELATING TO LAND DE AL AND ASSESSEE COULD NOT FURNISH THE AGREEMENT COPIES. THE CIT (A) ENLISTED CERTAIN TRAN SACTIONS INVOLVING LARGE AMOUNTS TOO. FURTHER, CIT (A) WAS ALSO CRITICAL OF THE ASSESSEE S FAILURE TO FURNISH TRAVELLING BILLS IN SUPPORT OF THE CASH WITHDRAWN ON ACCOUNT OF TRAVELLING ADVA NCES AND THE ASSESSEES EXPLANATION THAT CASH WAS WITHDRAWN FOR COMPANYS EXPENDITURE AND TH E COMPANY REIMBURSED THE SAME. THE EXPLANATION OF THE ASSESSEE REGARDING CASH INVE STMENTS IN THE LANDS AND FOR TRAVELLING EXPENSES WERE ALSO DISMISSED IN THE LIGHT OF ABSENC E OF ANY EVIDENCE. THUS, THE CIT (A) CAME TO THE CONCLUSION THAT THE ADDITION U/S 68 SHO ULD BE CONFIRMED IN VIEW OF THE FOLLOWING REASONING GIVEN BY HIM IN HIS ORDER. THUS, THE NEXUS BETWEEN THE WITHDRAWALS FROM BANKS AND RE- DEPOSIT OUT OF THE WITHDRAWALS HAS NOT BEEN ESTABLIS HED, SINCE THE LINK BETWEEN THE WITHDRAWALS AND DEPOSITS, VIZ., THE PUR POSE HAS NOT BEEN SUBSTANTIATED BY ANY EVIDENCE. THE APPELLANT HAS N OT SUBMITTED THAT THE AMOUNTS WERE WITHDRAWN MERELY FOR RE-DEPOSIT, WHICH WOULD IN ANY CASE NOT BE PLAUSIBLE UNLESS THERE IS A PURPOSE BEHIND THE S AME. THE APPELLANT HAS EXPLAINED THAT WITHDRAWALS WERE FOR COMPANYS EXPEN SES AND INVESTMENT IN LAND AND RE-DEPOSITS WERE MADE THEREAFTER. THUS, IT CANNOT BE SAID THAT THE NEXUS BETWEEN THE WITHDRAWALS AND RE-DEPOSITS H AVE BEEN ESTABLISHED. IT IS NOT THE CASE THAT THE APPELLANT HAS MADE A SATISFACTORY EXPLANATION. WHERE THE APPELLANT MAKES A CLAIM, TH E ONUS LIES ON HIM TO SUBSTANTIATE THE CLAIM BY SUPPORTING DOCUMENTARY EV IDENCE. AS DISCUSSED IN THE ASSESSMENT ORDER AND AS ABOVE, THE APPELLANT HA S NOT FILED ANYTHING TO SUBSTANTIATE THE PURPOSE OF THE WITHDRAWALS OF THAT THE SOURCE OF 6 SHRI VIKRAM DEOKISAN SARDA DEPOSITS CAME OUT OF RECOUPMENT OF EXPENSES BORNE O N BEHALF OF THE COMPANIES OR WHEN LAND DEALS FELL THROUGH. 9. AGGRIEVED WITH THE SAME, ASSESSEE FILED THE PRES ENT APPEAL BEFORE US. 10. DURING THE PROCEEDINGS BEFORE US, ASSESSEE FILE D PAPER BOOKS AND ALSO COMPILATION OF VARIOUS JUDGMENTS TO SUPPORT HIS CONTENTION. SHRI MAYUR KISNADWALA, LD COUNSEL FOR THE ASSESSEE, EXPLAINED THE FACTS AND REITERATED THE AB OVE ARGUMENTS MADE BEFORE THE LOWER AUTHORITIES. LD COUNSEL MENTIONED THAT THE CASH DEP OSIT IN BANK ACCOUNTS IS EXPLAINED BY THE CASH WITHDRAWN FROM THE OTHER ACCOUNTS OF THE ASSES SEE AND HIS COMPANIES. ASSESSEE ALSO FURNISHED CASH FOLLOW STATEMENT SHOWING THAT CASH WITHDRAWN FROM THE COMPANY FOUND ITS WAY INTO THE BANK ACCOUNTS OF THE ASSESSEE AND THE CASH WITHDRAWN FROM THAT BANK WAS THE SOURCE OF DEPOSITS IN OTHER BANK ACCOUNTS. AS P ER THE CHRONOLOGY OF DATES OF THE CASH WITHDRAWALS EITHER FROM THE COMPANY ACCOUNTS OR FRO M THE BANK ACCOUNTS, THEY ARE EARLIER IN TIME/DATE VIS A VIS THE CASH DEPOSITS. LD COUNSE L RELIED ON CERTAIN DECISIONS, WHERE ONE (JM) OF IS A PARTY, TO SUGGEST THAT THE EXISTENCE F UNDS PRIOR TO INVESTMENT OR DEPOSITING IN THE BANK ACCOUNTS AND IN THAT CASE, THERE IS NO NEE D FOR MAKING ADDITIONS U/S 68/69 OF THE ACT. THEREFORE, CASH DEPOSIT OF RS. 3.22 CR IN THE BOOKS IS EXPLAINABLE BY VIRTUE OF CASH FLOW ANALYSIS. AO DID NOT REBUT ANY OF THE ASSESSEES EXPLANATIONS AND HE MERELY STATED THAT THERE IS NO EVIDENCE TO SUPPORT THE ASSESSEES EXPL ANATION INSTEAD OF APPRECIATING THE FACT THERE EXISTS CASH IN THE BOOKS OF THE ASSESSEE DULY WITHDRAWN FROM THE COMPANY/BANK ACCOUNTS. IT IS ALSO A FACT THAT A PROPOSED IMMOVAB LE PROPERTY TRANSACTIONS NEVER FRUCTIFIED AND THEREFORE, THE CASH IS REDEPOSITED BACK INTO TH E ACCOUNTS OF THE ASSESSEE. AS PER LD COUNSEL, THERE IS NO LAW PRECLUDING THE ASSESSEE FR OM KEEPING ANY AMOUNT OF CASH AT HOME AND CASH IN HAND IS ACCEPTED ACCOUNT IN THE BALAN CE SHEET. 11. ONUS : REFERRING TO ISSUE OF DISCHARGE OF ONUS , THE LD COUNSEL MENTIONED THAT THE ASSESSEE DISCHARGED THE SAME BY EXPLAINING IN WRITI NG THE REASONS FOR CASH WITHDRAWALS AND RE-DEPOSITING OF THE SAID CASH ON HAND BACK INTO TH E ACCOUNTS AS AND WHEN THE SAME WERE NOT REQUIRED. AO MERELY DISBELIEVED THE SAID EXPLAN ATION AND HE CANNOT MAKE ADDITIONS IN THE ASSESSMENTS MERELY ON THE BASIS OF SURMISES AND CONJECTURE. FURTHER, LD COUNSEL MENTIONED THAT THE ASSESSMENT IS MADE UNDER NORMAL PROVISIONS OF THE ACT AND NOT UNDER THE PROVISIONS RELATING TO SEARCH ASSESSMENT, WHICH PLACES THE ASSESSEE ON DIFFERENT PEDESTAL IN THE MATTERS RELATING TO ONUS. LD COUNSE L MENTIONED THAT WHEN ASSESSEE DISCHARGED THE INITIAL ONUS, IT IS FOR THE AO TO SH OW THE EVIDENCE THAT THE CASH WITHDRAWN FROM THE ACCOUNTS ARE UTILIZED ELSEWHERE FOR OTHER UNACCOUNTED PURPOSES. IT IS FOR THE AO TO 7 SHRI VIKRAM DEOKISAN SARDA ESTABLISH THAT THE CASH ON HAND HAS COME OTHER UNAC COUNTED SOURCES. FURTHER, WHEN THE AO HAS NOT BROUGHT ANY EVIDENCE TO CONTROVERT THE EXPL ANATION OF THE ASSESSEE, THE ADDITIONS MADE BY HIM ON MERE SURMISES ARE NOT SUSTAINABLE IN LAW AND THE JUDICIAL SCRUTINY. 12. REJECTION OF BOOKS : FURTHER, LD COUNSEL ARGUED THAT AO HAS NOT REJECT ED THE BOOKS OF ACCOUNT INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. THEREFORE, THE ASSESSING OFFICER CANNOT BOTH ACCEPT THE BOOKS OF A CCOUNT ON ONE SIDE AND MADE AN ADDITION U/S 68 OF THE ACT ON THE OTHER SIDE. LD CO UNSEL SUBMITTED THAT IT IS MERELY A CASE BASED ON SURMISES AND RELIED ON VARIOUS CASE LAWS T O DEMONSTRATE AND JUSTIFY THE ASSESSEE POSSESSING THE WITHDRAWN CASH FOR YEARS AS APPROVED BY THE JUDICIAL FORUMS. TRIBUNAL HAS ACCEPTED THE ASSESSEES SUBMISSIONS THAT THE CASH L YING WITH THEM FOR YEARS CAN BE ACCEPTED AS THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNTS AND THE PROVISIONS OF SECTIONS 68/69 OF THE ACT CANNOT BE INVOKED IN SUCH CASES. 13. ADEQUACY OF CASH ON HAND TO ACCOUNT FOR CASH DEPOSITS : REGARDING THE CASH DEPOSITS, LD COUNSEL LABORIOUSLY EXPLAINED THE TRA NSACTIONS INVOLVING MAJOR CASH DEPOSITS ON A PARTICULAR DAY RELYING ON THE CASH BOOKS AND BANK ACCOUNTS. THERE IS NO CASE OF NEGATIVE CASH BALANCE AT ANY PARTICULAR DAY. ASSESSEES EXPL AINED BOTH THE SOURCES OF THE CASH DEPOSITS AND THE ADEQUACY OF THE CASH ON HAND FOR S UCH DEPOSITS ON SAMPLE BASIS AT THE DIRECTION OF THE BENCH. THUS, LD COUNSEL MENTIONED THAT THE SOURCES FOR THE SAID CASH DEPOSITS OF RS 3.22 CRORES (ROUNDED OFF TO NEAREST THOUSANDS) ARE CASH WITHDRAWN FROM THE BANKS BY WAY OF REFUND OF UNSECURED LOANS FROM LOAN CREDITORS, UNSECURED LOANS, SALE PROCEEDS/ ADVANCES RECEIVED IN CONNECTION WITH SALE OF FLATS ETC. FOR THIS PURPOSE, LD COUNSEL RELIED ON THE CASH WITHDRAWN FROM OTHER BAN KS IN EARLIER DATES AND JUSTIFIED THE CLAIM USING THE CASH FLOW STATEMENTS FILED IN THE P APER BOOKS. IN THIS REGARD LD COUNSEL CATEGORICALLY MENTIONED ABOUT REVENUE ACCEPTING THE CASH FLOW ANALYSIS FILED BY THE ASSESSEE WITHOUT RAISING ANY OBJECTIONS. THE TROUBL ING PROBLEM OF THE REVENUE AS MADE OUT IN THE ORDER OF THE CIT(A) RELATES TO THE ISSUE OF NEXUS OF CASH ON HAND WITH THE CASH DEPOSIT. FURTHER, LD COUNSEL RELIED ON THE CONFIRMA TION LETTERS FROM THE UNSECURED LOAN CREDITORS AS WELL AS THE ADDITIONAL EVIDENCES DISCU SSED ABOVE TO EXPLAIN THE SOURCES FOR THE LARGE DEPOSITS ENLISTED BY CIT(A) IN HER ORDER. AT THE END, LD COUNSEL SUMMED UP BY STATING THAT THE ASSESSEE WITHDREW CASH FROM THE COMPANY AS WELL AS HIS 14 BANK ACCOUNTS LOCATED BOTH IN MUMBAI AND NASIK FOR THE PURPOSE OF MEETING THE PROPOSED LAND DEALS ONE SIDE AND THE OTHER CASH NEEDS OF THE COMPANY AND THE DOMESTI C NEEDS AND THE UNUTILIZED OR UNUSED CASH WAS KEPT WITH HIM FOR SOME TIME, OF COURSE NOT FOR YEARS, BEFORE THE SAME IS 8 SHRI VIKRAM DEOKISAN SARDA REDEPOSITED IN THE ASSESSEES BANK ACCOUNTS. OF COU RSE, THERE IS NO DISPUTE ON THE ACCOUNTED NATURE OF THE BANK ACCOUNTS AND ALSO THE CASH WITHDRAWALS AND CASH DEPOSITS IN THE BOOKS OF ACCOUNT, WHICH ARE NOT REJECTED BY THE REVENUE. THUS, THE ASSESSEE SUCCESSFULLY DISCHARGED THE INITIAL ONUS SUCCESSFUL LY AND THE AO HAS REFUSED TO ACCEPT THE SAID EXPLANATION AS THE AO IS PREJUDICED OBSERVING LARGE NUMBER OF CASH TRANSACTIONS DUE TO REASONS OF SURMISE AND CONJECTURE. 14. FURTHER, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE AO ERRONEOUSLY INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT TO TAX THE UNEX PLAINED MONEY. SECTION 68 DEALS WITH THE ENTRIES OF CASH CREDIT IN THE BOOKS OF THE ASSESSEE . IN THE INSTANT CASE, THE AO DID NOT RAISE ANY OBJECTIONS TO THE CASH WITHDRAWN FROM THE ACCOU NTS OF THE ASSESSEE AND HIS OBJECTION RELATES THE SOURCE OF CASH DEPOSITS. THE EXPLANATIO N THAT THE SAME CASH WITHDRAWN IS THE SOURCE OF THE SAID DEPOSITS IS REJECTED BY THE AO F OR WANT OF NEXUS ISSUE. 15. ON THE OTHER HAND, SHRI AJAY PAL SINGH, LD CIT- DR WAS CRITICAL OF THE WHOLE EXPLANATION OF THE ASSESSEE. LD DR RELIED ON THE WR ITTEN SUBMISSIONS FILED BY HIS PREDECESSOR AND SUMMED UP BY READING THE POINTS FROM PARA 4 AND 7 OF THE NOTE. SUMMARY OF THE SAME IS AS FOLLOWS: ASSESSEE FAILED IN NOT ESTABLISHING THE NEXUS OF CASH WITHDRAWALS VIS AVIS THE CASH DEPOSITS, IN NOT ESTABLISHING THE ALLEGED SALE AND PURCHASE OF PLOT DEALINGS, REIMBURSEMENT OF THE EXPENSES BY THE COMPANY, HOUSE HOLD EXPENSES, FAILURE OF THE ASSESSEE IN DISCHARGING THE ONUS ETC. REFERRING TO AOS DECISION IN WRONGLY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, LD DR, IS OF T HE OPINION THAT IT DOES NOT MAKE THE ASSESSMENT FATAL. HE PLACED RELIANCE ON DECISION OF BANGALORE BENCH TRIBUNAL IN THE CASE OF P V AJAY NARAIN 57 TTJ 159 AND PLACED RELIANCE ON S B DECISION IN THE CASE OF MANOJ AGGARWAL 113 ITD 377. 16. REFERRING TO THE PAPERS FILED BY THE ASSESSEE I N THE PAPER BOOK, LD CIT-DR WAS CRITICAL OF THE CONTENTS. IN THIS REGARD, LD DR PIC KED UP THE PAPERS RELATING TO THE BALANCE SHEET AND DUG OUT CERTAIN DISCREPANCIES WITH REFERE NCE TO FIGURES, SUNDRY CREDITORS ETC AND MENTIONED THE BOOK ENTRIES SUFFER FROM CREDIBILITY. HOWEVER, HE FAIRLY ADMITTED THAT THESE DISCOVERIES ARE BEING MENTIONED FOR THE FIRST TIME BEFORE THE TRIBUNAL THOUGH THE SAID DOCUMENTS WERE AVAILABLE TO THE AO/CIT(A). FURTHER, REFERRING TO PAGE 34 TO 49 OF THE PAPER BOOK, LD DR MENTIONED THAT THE CONFIRMATION LETTERS SUFFER FROM INFIRMITIES RELATING TO SIGNATURE AND ABSENCE OF FULL PARTICULARS EXHAUSTIV ELY. REFERRING TO THE CASE LAWS FILED BY 9 SHRI VIKRAM DEOKISAN SARDA THE ASSESSEE, LD DR MENTIONED THAT ALL THOSE CASES WERE DECIDED BASING ON THE FACTS OF ONE OR TWO CASH TRANSACTIONS AND NONE OF THEM DEALT WIT H CASH DEPOSITS OF THIS MAGNITUDE. 17. DURING THE REBUTTAL TIME, IN CONNECTION WITH TH E LD DRS REMARKS ON THE QUALITY FINANCIAL STATEMENTS AS WELL AS THE CONFIRMATION LE TTERS IN SUPPORT OF THE UNSECURED LOAN CREDITORS, LD COUNSEL FOR THE ASSESSEE TOOK STRONG OBJECTION AND MENTIONED THAT WHEN THE SAID DOCUMENT/EVIDENCES ARE ACCEPTED BY THE AO IN T HE ASSESSMENT PROCEEDINGS AND THE FIRST APPELLATE PROCEEDINGS, LD DR SHOULD NOT MAKE A NEW CASE BEFORE THE HONBLE ITAT. IN THIS REGARD, LD COUNSEL RELIED ON VARIOUS JUDGMENTS TO SUPPORT HIS ASSERTION. WHEN THE AO ACCEPTED THE SAID DOCUMENTS, LD DRS DUTY STOPS WIT H THE DEFENDING OF THE ISSUES RAISED IN THE GROUNDS AND HE IS PRECLUDED FROM CREATING NEW I SSUES FOR THE FIRST TIME BEFORE THE TRIBUNAL. AT THE END, LD AR FOR ASSESSEE MENTIONED THAT THE REVENUE AUTHORITIES FAILED TO EXPLAIN THE END USE OF THE CASH WITHDRAWN BY THE AS SESSEE FROM HIS BANK ACCOUNTS AND THE COMPANY ACCOUNTS, IF THEY ARE NOT USED FOR RE-DEPOS ITING IN THE SAID ACCOUNTS. THEREFORE, THE NEXUS IS ESTABLISHED BY THE ASSESSEE AND WHEN N O DISCREPANCY IS MADE OUT BY THE REVENUE, THEY SHOULD ACCEPT THE ARGUMENT OF THE ASS ESSEE. ASSESSEE FILED WRITTEN SUBMISSION TO REITERATE THEIR LINE OF ARGUMENTS. DECISION OF THE TRIBUNAL: 18. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER S OF THE REVENUE AND THE PAPER BOOKS FILED BY THE PARTIES. WE HAVE ALSO PERUSED TH EIR WRITTEN SUBMISSIONS. UNDISPUTED FACTS ARE THAT ASSESSEE OWNS 14 BANK ACCOUNTS, WHIC H ARE DULY DISCLOSED IN THE BOOKS OF ACCOUNTS. THERE IS NO DISPUTE ON THE FACT THERE EXI STS CASH WITHDRAWAL FROM THESE ACCOUNTS AS WELL AS THE BOOKS OF ACCOUNT OF THE COMPANIES. FURTHER, IT IS A FACT THAT THE ASSESSEE WITHDREW CASH FOR 297 TIMES AND DEPOSITED FOR 198 T IMES INTO THE SAID BANK ACCOUNTS. THE CASH WITHDRAWN FOR ALL THESE 297 TIMES FROM VARIOUS ACCOUNTED SOURCES MATCHES WITH THE CASH DEPOSITS QUANTITATIVELY. THERE IS NO DISPUTE O N THE FIGURE OF RS 3.22 CRORES, THE TOTAL CASH DEPOSITED IN THE SAID BANK ACCOUNTS. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE GAVE EXPLANATION, CASH FLOW ANALYSIS, FILED ALL THE COPI ES OF THE BANK ACCOUNTS OF THE ASSESSEE BEFORE THE AUTHORITIES AND THE AO COULD NOT FIND IN CRIMINATION WITH REGARD TO NEGATIVE CASH BALANCE, UNACCOUNTED TRANSACTIONS ETC AGAINST THE A SSESSEE. AO/CIT(A) HAS NOT MADE OUT ANY CASE AGAINST THE ASSESSEE THAT THE SAID CASH WI THDRAWN IS UTILIZED BY THE ASSESSEE ELSEWHERE FOR THE PURPOSES, NOT DISCLOSED HIS BOOK S OF THE ASSESSEE OR ITS GROUP COMPANIES. WHERE HAS THIS CASH GONE IF NOT USED FOR REPOSITED? WHEN THE ASSESSEE CLAIMS THAT CASH ON HAND IS THE SOURCE FOR THE IMPUGNED CASH DEPOSIT, S HOULD NOT THE AO ACCEPT THE SAME? 10 SHRI VIKRAM DEOKISAN SARDA 19. PER CONTRA , DISPUTED FACTS ARE THAT WHILE ASSESSEE EXPLAINS THE SOURCE FOR THE CASH DEPOSITS AMOUNTING RS 3.22 CR IS THE UNUTILIZED CAS H ON HAND WITHDRAWN FROM THE SAME BANK ACCOUNTS; REVENUE DOES NOT BELIEVE THE SAID EXPLANA TION OF THE ASSESSEE. REVENUE HOLDS THAT THE ASSESSEE NEEDS TO ESTABLISH THE NEXUS AND ASSESSEE CLAIMS THAT THE NEXUS IS ALREADY ESTABLISHED. 20. ON CONSIDERING THE DIVERGENT STANDS OF THE PART IES, IN OUR CONSIDERED OPINION, THERE IS NEED FOR ADDRESSING TO VARIOUS ISSUES BEFORE ADD RESSING TO THE CORE ISSUE. THEY ARE: (I) IF THE ASSESSEE HAS DISCHARGED INITIAL ONUS OF EXPLAIN ING THE PURPOSE OF CASH WITHDRAWAL; (II) IF THE ASSESSEE HAS EXPLAINED AS TO WHY THE ASSESSEE K EPT THE WITHDRAWN CASH IN THE HOUSE WITHOUT DEPOSITING THE SAME IN THE BANK ACCOUNTS; ( III) IF THE ASSESSEE HAS SUCCESSFULLY EXPLAINED THE SOURCES OF THE CASH DEPOSITED IN THE BANK ACCOUNTS; (IV) IF THE ASSESSEE CASH FLOW OF THE ASSESSEE SUFFER FROM ANY INCRIMINATION; (V) IF THERE IS AVAILABILITY OF CASH WITH THE ASSESSEE PRIOR TO THE DATE OF CASH DEPOSIT IN BANK ACCOUNTS AND FINALLY (VI) IF THE AO IS UNDER OBLIGATION TO ACCEPT THE CLAIM OF THE ASSESSEE. (I) REGARDING THE FIRST ISSUE AT (I), WE FIND THAT THE CLAIM OF THE ASSESSEE IS THAT THE CASH IS WITHDRAWN FOR THE TRIPLE PURPOSES NAMELY FOR MEE TING THE CASH REQUIREMENTS OF THE COMPANY ON REIMBURSEMENT BASIS, HOUSE HOLD EXPENDIT URE AND MAINTAINING CASH ON HAND FOR MEETING THE CONTINGENCIES OF THE LAND BUSINESS. IN THIS REGARD, WE FIND THAT THERE IS REPEATED WITHDRAWAL OF CASH FROM AND TO THE COMPANY ACCOUNTS AS WELL AS THE BANK ACCOUNTS OF THE ASSESSEE AND IT SUGGEST THE FLOW OF CASH FROM COMPANY TO THE ASSESSEE AND VICE VERSA. CONSIDERING THE FACT THAT THE CASH WITH DRAWN FROM THE COMPANY ACCOUNTS IS SHOWN RE-DEPOSITIED IN THE BANK ACCOUNTS OF THE ASS ESSEE, THE TRANSACTIONAL REQUIREMENT STANDS SATISFIED. FURTHER, WE FIND THAT THE ASSESSE E EXPLAINED THAT THE CASH WITHDRAWN IS KEPT WITH HIM TO MEET THE CONTINGENCIES RELATING TO DOMESTIC AND PROPOSED LAND PURCHASE TRANSACTIONS. IN SUPPORT OF THE SAID EXPLANATION RE LATING TO LAND DEALS, PAPERS AT PAGE 275 TO 280 RELATES TO SRI SATISH MITHULAL TIWARI, WHO GAVE CASH ADVANCE TO THE ASSESSEE IN CONNECTION WITH THE PURCHASE OF THE LAND, WAS FINAL LY REFUNDED. THE FACT ASSESSEE RECEIVING THE CASH IN SIMILAR TRANSACTION WHEN HE SOLD LAND T O SRI RAJKUMAR MAHALE AND ANOTHER TRANSACTION OF UNFRUCTIFIED SALE OF LAND TO SRI VIN OD SARAF WHO PAID CASH RS 15.11 LAKHS WERE ALSO CITED BY THE ASSESSEE IN THE PROCEEDINGS BEFOR E THE LOWER AUTHORITIES. THIS EXPLANATION OF THE ASSESSEE WAS NOT CONTROVERTED BY THE AO. ENT RIES IN THE BOOKS OF ACCOUNTS, WHICH ARE NOT REJECTED BY THE AO ALSO SUPPORTS THE EXPLANATIO N/CLAIMS OF THE ASSESSEE. THE DOCUMENTS RELATING TO TRANSACTION WITH SRI VINOD SARAF ARE NO W FILED AS ADDITIONAL EVIDENCES, WHICH ARE 11 SHRI VIKRAM DEOKISAN SARDA ADMITTED BY US CONSIDERING THEIR IMPORTANCE AND REM ANDED TO THE FILES OF THE AO EXAMINATION. BUT THE MOOT POINT HERE FOR CONSIDERAT ION RELATES TO THE CREDIBILITY OF THE EXPLANATION OF THE ASSESSEE AND CONSIDERING THE UND ISPUTED ENTRIES IN THE BOOKS OF ACCOUNTS AND OTHER FACTORS DISCUSSED ABOVE, WE FIND PRIMA FA CIE MERIT IN THE CLAIMS OF THE ASSESSEE. IN OUR OPINION, THE ASSESSEE HAS DISCHARGED THE INI TIAL ONUS. IN NORMAL COURSE OF ASSESSMENT, THE AO SHOULD HAVE EXAMINED SRI VINOD S ARAF OR RAJKUMAR MAHALE BY INVOKING THE PROVISIONS OF SECTION 131 OR 132 OR 133(6) OF T HE ACT IN ORDER TO BRING FACTS TO DEMOLISH THE EXPLANATION OF THE ASSESSEE. ON THE CONTRARY, A O PREMATURELY CONCLUDED THE ASSESSMENT PROCEEDINGS RELYING ON THE UNSUSTAINABLE GROUND OF SURMISES. AS DISCUSSED IN PARA 5 OF THIS ORDER, PAPERS RELATING TO MR. SARAFS CASH ADVANCE IS SET ASIDE. (II) IF THE ASSESSEE HAS EXPLAINED AS TO WHY THE ASSESSE E KEPT THE WITHDRAWN CASH IN THE HOUSE WITHOUT DEPOSITING THE SAME IN THE BANK ACCOU NTS: HAVING EXPLAINED THE VALID PURPOSES FOR WHICH THE CASE WAS WITHDRAWN, WE HAVE EXAMINED IF THE ASSESSEE VIOLATED ANY PROVISIONS IN KEEPING THE SAID CASH WITH HIM AS CA SH ON HAND. THE CASE OF THE ASSESSEE IS THERE NO PREVENTIVE LAW AGAINST KEEPING HUGE CASH A T THE HOUSE. FURTHER, ASSESSEE FILED NUMBER OF CASE LAWS WHICH UPHOLDS THE ASSESSEES VI EW POINT. DETAILS OF SOME OF THE DECISIONS AND THE PERIOD OF HOLDING OF CASH ON HAND BEFORE CASH DEPOSIT IN THE BANKS ARE TABULATED AS UNDER: S.NO NAME OF THE CASE & CITATION HOLDING PERIOD 1 VINKATA RATNAM (SR) 127 ITR 807 (KAR) 2 4 MONTHS 2 VINOD KIMAR GOEL ITA 310/JP /08 18 MONTHS 3. HEMANT PRABHAKAR ITA NO.684/JP/98, 31 TAX WORLD 198 14 MONTHS 4. R.K. DAVE 94 TTJ (JOD) 19 0 7 MONTHS 5. SURENDRA SINGH ITA NO.650/JP/2011 5 - 9 MONTHS 6. CIT VS. JAUHARIMAL GOEL 201 CTR 54 (ALL) 5 - 8 MONTHS 7. VEERAPPA SHETTY ITA NO.52 76/M/2011 3.5 MONTHS 8. ANUPAMA CHAUDHARY ITA NO. 4155/DEL/2009 3 - 6 MONTH S 9. TANMOY CHATTERJEE ITA NO.1434/KOL/2009 1 MONTH 10. ACIT VS. BALDEV RAJ CHARLA, 121 TTJ 366 (DELHI) 1 - 2 MONTHS 11. ITA NO.957/M/2009 M/S. CELLPLUS TELCOMES 0 9 MONTHS 21. THE ABOVE JUDGMENTS FROM VARIOUS BENCHES OF THE TRIBUNAL AS WELL AS THE HIGHER COURTS SUGGEST THAT THE ASSESSEE CAN EXPLAIN THE CA SH DEPOSIT IN THE BANKS USING THE CASH HELD BY HIM FOR PERIOD LONGER THAN 2 YEARS AND THER E IS NO RESTRAINING PROVISIONS AGAINST SUCH MAINTAINING BALANCE FOR THE SAID PERIODS. HON BLE KARNATAKA HIGH COURT HAS FOUND AN ASSESSEE HAS KEPT CASH FOR 2 YEARS AND THE SAME IS ACCEPTED AS THE SOURCE FOR EXPLAINING A 12 SHRI VIKRAM DEOKISAN SARDA CASH DEPOSIT. OF COURSE, LD DR ATTEMPTED TO DISTING UISH THE ABOVE CASES AS CASES OF FEW CREDITS AND INCOMPARABLE TO THE 298 TRANSACTIONS RE PORTED IN THE INSTANT CASE. IN OUR OPINION, NUMBER OF TRANSACTIONS IS NOT A RELEVANT F ACTOR AS THE TRANSACTIONS NUMBER VARY FROM ASSESSEES TO ASSESSEE DEPENDING ON THEIR REQUI REMENTS RELATING TO BUSINESS, DOMESTIC AND THEIR PLANS AND PERSPECTIVE. THEREFORE, THE INS TANT CASE BEING THE RETAINING OF CASH FOR FEW WEEKS/MONTHS ONLY, THE ARGUMENTS OF LD DR HAS T O BE DISMISSED AND UPHOLD THE VIEWS OF THE AR FOR THE REVENUE. IN THE PROCESS, WE RELY ON THE DECISION TABULATED ABOVE. (III) & (IV) IF THE ASSESSEE HAS SUCCESSFULLY EXPLA INED THE SOURCES OF THE CASH DEPOSITED IN THE BANK ACCOUNTS AND EXISTENCE ANY INCRIMINATION I N THE CASH FLOW STATEMENT & (IV) IF THE ASSESSEE CASH FLOW OF THE ASSESSEE SUFFER FROM ANY INCRIMINATION: WE HAVE DISCUSSED IN THE PRECEDING PARAGRAPHS OF THIS ORDER ABOUT VARIOUS AS PECTS VIS AVIS DISCHARGING OF INITIAL ONUS BY THE ASSESSEE IN MATTERS OF (A) FURNISHING OF THE EXPLANATION ABOUT THE SOURCES OF FUNDS; (B) REROUTING OF THE CASH INTO THE BANK ACCOUNTS AD EQUATELY TO MEET THE WITHDRAWAL OF RS 3.22 CR; (C) AO FAILURE TO REBUT THAT THE WITHDRAWN CASH WAS NOT EXISTING IN THE SYSTEM AND DIVERTED TOWARDS OTHER UNACCOUNTED PURPOSES ETC. WE HAVE HELD THAT THE ASSESSEE HAS DISCHARGED HIS PART OF THE ONUS WHICH IS THE DUTY O F THE ASSESSEE TO DISCHARGE THE INITIAL ONUS. WE HAVE ALSO DISCUSSED THE SETTLED LEGAL PROP OSITION THAT THE ASSESSEE IS NOT PREVENTED BY ANY LAW FROM PARKING THE CASH WITHDRAW N AS CASH IN HAND. THUS, WHEN THE WITHDRAWN CASH EXISTS IN THE SYSTEM AND NOT UTILISE D FOR ANY OTHER BUSINESS OR PERSONAL UTILITIES, THE QUESTION ARISES, WHERE DID THAT CASH GO? WHY CANNOT THAT CASH BE USED TO EXPLAIN THE CASH DEPOSITS INTO THE BANK ACCOUNTS? I F THE AO COULD HAVE FOUND ANY WEAKNESS IN THE EXPLANATION OF THE ASSESSEE OR AO IS IN A PO SSESSION OF ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE, INFERENCE MAY BE DIFFERENT. B UT IN THIS CASE, THE AO HAS NOT MADE OUT ANY CASE TO SAY THAT THE SAID CASH WAS USED FOR OTH ER UNACCOUNTED OR ACCOUNTED ACTIVITIES OF THE ASSESSEE OR OTHERS AND THE SAME NOT AVAILABLE F OR EXPLAINING THE SOURCE OF THE IMPUGNED CASH DEPOSITS. IN OUR OPINION, THE EXPLANATION OF T HE ASSESSEE IS A PLAUSIBLE ONE. THEREFORE, WE HAVE NO DOUBT IN OUR MINDS TO DRAWN THE OBVIOUS INFERENCE THAT THE WITHDRAWN CASH CONSTITUTES THE SOURCES FOR EXPLAINING THE IMPUGNED CASH DEPOSITS INTO THE BANK ACCOUNTS. BOMBAY HIGH JUDGMENT IN THE CAE OF NARENDRA G. GORA DIA (HUF) 234 ITR 571 IS RELIED. (V) & (VI) IF THERE IS AVAILABILITY OF CASH WITH TH E ASSESSEE PRIOR TO THE DATE OF CASH DEPOSIT IN BANK ACCOUNTS, IF THE AO IS UNDER OBLIGA TION TO ACCEPT THE CLAIM OF THE ASSESSEE OR NOT & ) IF THE AO IS UNDER OBLIGATION TO ACCEPT THE CLAIM OF THE ASSESSEE : IN MATTERS OF CONSIDERING THE WITHDRAWN CASH AS THE SOURCES OF CA SH DEPOSITS, EXISTENCE OF ADEQUATE CASH 13 SHRI VIKRAM DEOKISAN SARDA BALANCE PRIOR TO SUCH CASH DEPOSITING BECOMES VERY CRUCIAL AND DECISIVE FACTOR. IN THIS REGARD, LD COUNSEL RELIED ON A DECISION OF THE TRIB UNAL IN THE CASE OF SHRI BHARAT RANAWAT VIDE I.T.A. NO.3338/M/2010 FOR THE AY 2008-2009 AND READ OUT PARA 10 OF THE SAME WHICH IS AS UNDER: 10. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSE E MENTIONED THAT THE SOURCE OF UNEXPLAINED GOLD AND DIAMOND JEWELLERY IS OUT OF ST RIDHAN AND CUSTOMARY GIFTS FROM NEARS AND DEARS. ..... ..... ON A PERUSAL OF THE S AID DECISION OF THE CIT(A) WE FIND THAT THERE IS A NEED FOR THE ASSESSEE TO EXPLAIN AB OUT THE EXISTENCE OF THE SECRET FUNDS OR UNDISCLOSED FUNDS PRIOR TO THE ACQUISITION OF THE IMPUGNED GOLD AND DIAMOND JEWELLERY. SO LONG AS ASSESSEE HAS NOT SUC CESSFULLY DISCHARGED THE ONUS, THE CLAIM OF THE ASSESSEE FOR TELESCOPIC BENEFIT CA NNOT BE ENTERTAINED. 22. THEREFORE, THE EXISTENCE OF THE FUNDS/CASH WITH DRAWN PRIOR TO INVESTMENT IN THE UNACCOUNTED ASSET AS IN THAT CASE OR DEPOSITING IN THE BANK ACCOUNTS AS RECORDED IN THE BOOK OF ACCOUNTS, IS THE ESSENTIAL FACT THAT IS REQ UIRED TO BE ESTABLISHED BY THE ASSESSEE IN THIS KIND OF MATTERS. IN THE INSTANT CASE, THE AS SESSEE HAS FILED A CASH FLOW STATEMENT SHOWING THE DETAILS OF THE AMOUNTS OF CASH WITHDRAW N, DETAILS OF THE ACCOUNTS FROM WHERE WITHDRAWN, CASH DEPOSITING ETC. PERUSAL OF THE SAME CONFIRMS THE EXISTENCE OF THE CASH ON HAND. THE ABOVE REASONING HAS THE STRENGTH OF SUPPO RT BY THE RATIO DECIDENDI OF A BINDING JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF JAWANMAL GEMANJI GANDHI (151 ITR 3 53), WHICH IS FAMOUS FOR THE PROPOSITION THAT THE UNDISCLOSED INCOME OF AN ASSESSEE EARNED IN AN EARLIER ASSESSMENT YEAR CAN CONSTITUTE A FUND, THOUGH CONC EALED, FROM WHICH THE ASSESSEE MAY DRAW SUBSEQUENTLY. THE HELD PORTION OF THE SAID JUDGMENT READ AS FOLLOWS: HELD, (I) THAT SECRET PROFITS OR UNDISCLOSED INCOME OF AN ASSESSEE EARNED IN AN EARLIER ASSESSMENT YEAR CAN CONSTITUTE A FUND, THOUGH CONCE ALED, FROM WHICH THE ASSESSEE MAY DRAW SUBSEQUENTLY. IN THE INSTANT CASE, THE ASSESSE E ACQUIRED THE GOLD DURING THE LATTER HALF OF THE ASSESSMENT YEAR AND IT COULD BE THAT TH E UNDISCLOSED INCOME EARNED IN THAT VERY YEAR CONSTITUTED A FUND FROM WHICH THE ASSET WAS ACQUIRED. (II) . EVEN BEFORE THE TRIBUNAL, THE ASSESSEE H AD ADOPTED THIS STAND BUT THE ASSESSEE HAD CONTENDED IN THE ALTERNATIVE THAT THE SOURCE OF THE GOLD COULD BE ASSUMED TO HAVE COME OUT OF THE INTANGIBLE ADDITIONS ON ACC OUNT OF THE INCREASED TURNOVER. 23. WHAT IS IMPORTANT IS THE TIMING AND EXISTENCE O F ADEQUATE CASH BALANCES EARLIER IN TIME TO EXPLAIN THE INVESTMENT OR CASH DEPOSITS IN THE LATER TIME/DATE/MONTH/YEAR AS THE CASE MAY BE. OF COURSE, WE ARE AWARE OF THE FACT TH AT THE ABOVE DECISION WAS GIVEN ON THE ISSUE IF UNDISCLOSED INCOME IE AN INTANGIBLE FUNDS CONSTITUTE A REAL INCOME WITH CONCRETE EXISTENCE FOR APPROPRIATION BY THE ASSESSEE AT A LA TER STAGE. BUT THERE IS ISSUE OF TIME 14 SHRI VIKRAM DEOKISAN SARDA ELEMENT ATTACHED TO THIS ISSUE. IN THE INSTANT CASE , CASH WITHDRAWN EXISTS EARLIER IN TIME BEFORE THE DATE OF CASH DEPOSIT INTO THE BANK ACCOU NTS. IN SUCH CIRCUMSTANCES, THE AO MUST NOT MAKE ADDITIONS AND MUST ACCEPT THE EXPLANATION OF THE ASSESSEE. IT IS ALSO EVIDENT TO NOTE THAT THE ABOVE JUDGMENT WAS GIVEN RELYING ON A N APEX COURTS JUDGMENT JAWANMAL GEMANJI GANDHI (SUPRA). 24. IN PRINCIPLE, WE FIND THE RATIO OF THE JURISDICTION AL HIGH COURTS JUDGMENT IN THE CASE OF NARENDRA G. GORADIA (HUF) VS. CIT (234 ITR 571) HELPS THE ASSESSEE. AS PER THE SAME, THE ASSESSEE IS REQUIRED TO PROVE THE SOURCE OF MON EY. ONCE AN EXPLANATION IS GIVEN, HE CANNOT PUT TO FURTHER PROVE WHETHER THE BUSINESS ON THE STATEMENT OF ACCOUNTS AND DISALLOWANCE OF THE ASSESSEE JUSTIFY THE REASONABLE INFERENCE THAT HE MIGHT HAVE KEPT THE WHOLE OR PART OR A PARTICULAR SUM, HE PRIMA FACIE D ISCHARGES HIS INITIAL BURDEN WHEN HE PROVES THE CASH BALANCE . BUT THE DEPARTMENT BEFORE REJECTING THE ASSESSEE S EXPLANATION MUST EITHER INHERENT WEAKNESS OR REBUTTED BY PUTTIN G TO THE ASSESSEE SOME INFORMATION OR EVIDENCE WHICH IT GOT IN ITS DECISION. HELD: (I) THAT WHAT THE ASSESSEE IS REQUIRED TO PRO VE IS THE SOURCE OF MONEY AND ONCE HE IS SUCCESSFUL IN PROVING THE SAME, HE CANNOT BE PUT TO FURTHER PROOF OF ACQUISITION OF SUCH AMOUNT IN THE CURRENCY NOTE S OF PARTICULAR DENOMINATION. IF THE EXPLANATION SHOWS THAT THE RE CEIPT WAS NOT OF TO HOLD THAT IT WAS INCOME. WHERE THE BUSINESS AND THE STATE OF AC COUNTS HAVE FOR CONVENIENCE KEPT THE WHOLE OR A PART OF A PARTICULAR SUM IN HIG H DENOMINATION NOTES, THE ASSESSEE, PRIMA FACIE, DISCHARGES HIS INITIAL BURDE N WHEN HE PROVES THE CASH BALANCE AND THAT IT MIGHT HAVE BEEN KEPT IN HIGH DENOMINAT ION NOTES. BEFORE THE DEPARTMENT REJECTS SUCH EVIDENCE, IT MUST EITHER SH OW AN INHERENCE WEAKNESS IN THE EXPLANATION OR REBUT IT BY PUTTING TO THE ASSESSEE SOME INFORMATION OR EVIDENCE WHICH IT HAS IN ITS POSSESSI ON. THE DEPARTMENT CANNOT BY MERELY REJECTING UNREASONABLE A GOOD EXPL ANATION, CONVERT GOOD PROOF INTO NO PROOF. 25. APPLYING THE PRINCIPLE TO THE FACTS OF THE PRES ENT CASE, WE FIND THAT THE ASSESSEE PROVED THE EXISTENCE OF THE ADEQUATE CASH BALANCE T O ACCOUNT FOR THE IMPUGNED CASH DEPOSITS, WHICH ARE ADDED BY THE AO TO THE INCOME O F THE ASSESSEE. NEITHER THE AO NOR THE CIT(A) HAS POINTED ANY LACUNAE IN THE CASH FLOW STA TEMENT OR BOOKS OF ACCOUNT OF THE ASSESSEE OR FOUND ANY INCRIMINATION IN THE SAID CA SH BALANCE POSITION ON ANY ACCOUNT OF THE CASH DEPOSIT. THEIR CORE OBJECTION OF THE CIT (A) R ELATES TO NEXUS OF THE EXISTING CASH BALANCE WITH THE CASH DEPOSIT. THIS KIND OF LOGIC I S NO BASIS FOR MAKING THE ADDITIONS. THE ABOVE RULING IN THE CASE OF NARENDRA G. GORADIA (HU F) (SUPRA) IS CATEGORICAL IS STATING THAT THE DEPARTMENT MUST EITHER SHOW THE INHERENT WEAKNE SS IN THE EXPLANATION OR REBUT IT BY PUTTING SOME INFORMATION OR EVIDENCE WHICH IS THERE IN POSSESSION OF THE REVENUE. THE 15 SHRI VIKRAM DEOKISAN SARDA REVENUE HAS NO SUCH INCRIMINATING EVIDENCE AS ADMIT TED BEFORE US. THE ONUS IS CLEARLY ON THE REVENUE TO PROVE THAT THE CASH BALANCES IN BOOK S OF THE ACCOUNTS ARE UTILIZED FOR OTHER UNACCOUNTED PURPOSES AS WELL AS THE REVENUE MUST PO SSESS SOME INFORMATION OR EVIDENCE TO PROVE THAT THE EXPLANATION OF THE ASSESSEE IS WRONG . THEREFORE, IN PRINCIPLE, THE NEXUS BASED LOGIC OF THE CIT(A) FOR CONFIRMING THE ADDITION IS NOT VALID AND IS NOT SUSTAINABLE IN LAW. THEREFORE, WE DISMISS THE ARGUMENTS OF LD DR, WHO R ELIED ON THE ORDERS OF THE AO AND THE CIT(A). 26. SUMMARY: THUS, ASSESSEE HAS SUCCESSFULLY DEMONS TRATED THAT THE ASSESSEE HAS 14 BANK ACCOUNTS AND THE CASH BOOK OF THE COMPANIES IN WHICH THE ASSESSEE IS THE DIRECTOR AND ALL OF THEM ARE DULY ACCOUNTED AS AUDITED BY THE ST ATUTORY AUDITORS. ADEQUATE CASH WAS WITHDRAWN FROM THESE ACCOUNTS AS EVIDENT FROM 297 T RANSACTIONS DETAILED ABOVE. ASSESSEE EXPLAINED REPEATEDLY THAT THE SAID CASH IS THE SOUR CE FOR EXPLAINING THE ALLEGED CASH DEPOSITS IN THE AFORE SAID 14 BANK ACCOUNTS. IN RESPONSE, AO HAS NOT DEMONSTRATED THAT THE SAID CASH WAS DIVERTED ELSEWHERE OR UTILIZED THE SAME FO R ANY OTHER UNACCOUNTED BUSINESS OR OTHER OPERATIONS OF THE ASSESSEE OR OTHERS. CASH FL OW STATEMENTS CONFIRMS THE EXISTENCE OF ADEQUATE CASH PRIOR IN TIME VIS AVIS THE CASH CREDI TS/DEPOSITS IN THE BOOKS OF THE ASSESSEE. IT IS A SETTLED LEGAL PROPOSITION THAT THE FUNDS ON HA ND WHETHER REAL OR NOTIONAL CONSTITUTES THE SOURCE TO EXPLAIN THE ACQUISITION OF ASSET OR INVES TMENT AS DEPOSIT AS IN THIS INSTANT CASE. THERE IS NO NEED FOR ESTABLISHING THE RUPEE TO RUPE E NEXUS. THE RATIO OF THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF NARENDRA G GORADIA (HUF) 234 ITR 571 SUPPORTS THE ABOVE VIEW AND MERE EXISTENCE OF SUFFICIENT CASH BA LANCE IS ENOUGH TO EXPLAIN THE CASH CREDIT. IN THE ABSENCE OF ADVERSE FINDING ON THE US E OF AVAILABLE CASH BALANCE BY THE AO, IN OUR OPINION, THE CO-RELATIONSHIP BETWEEN THE CASH O N HAND AND CASH DEPOSIT IS PRESUMED EXISTING AND TO THAT EXTENT THE JUDGMENT IN THE CAS E OF BALDEV RAJ CHARLA 121 ITR 807 AND MOONGIPA INVESTMENT LTD ITA NO 2605/DEL/2007, SUREN DRA SINGH ITA NO 650/ JP/2011 MANY OTHER HELPS THE ASSESSEE. IN THE INSTANT, WE FIND THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS THAT IS CAST ON HIM AND IT IS THE AO WHO HAS NOT DONE HIS BIT OF IT. AS HELD BY THE JURISDICTIONAL HIGH COURT, IT IS NOT THE REQUIREMEN T OF THE LAW THAT THE ASSESSEE IS UNDER OBLIGATION TO DEMONSTRATE THE DENOMINATION-WISE ACC OUNT BETWEEN THE CASH WITHDRAWN AND DEPOSIT AS ARGUED BY THE LD DR FOR THE REVENUE. OVE R ALL MATCHING OF THE FUND FLOW IS THE REQUIREMENT IN THESE KIND MATTERS. THE ASSESSMENT I N QUESTION IS MADE UNDER NORMAL PROVISIONS AND THEREFORE, THE PRINCIPLES OF ONUS RE LATING SEARCH AND SEIZURE ASSESSMENTS DO NOT APPLY HERE. IT IS ALSO RELEVANT TO MENTION THAT THE AO OUGHT NOT TO HAVE INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT TO THE CREDITS WHICH ARE BORNE IN THE BOOKS OF ACCOUNTS. 16 SHRI VIKRAM DEOKISAN SARDA IN ANY CASE, SUCH WRONG INVOKING MAY NOT MAKE THE P ROCEEDINGS INVALID AS PER THE ARGUMENTS OF LD DR, WHICH ARE DETAILED IN THE ABOVE PARAGRAPHS OF THIS ORDER. IN SUCH CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION, TH E ARGUMENTS OF LD COUNSEL HAVE TO BE APPROVED AND THE EXPLANATION OF THE ASSESSEE HAS TO BE ACCEPTED. IT GOES WITHOUT SAYING THAT IN CASE, IF CASH DEFICIT EXISTS AND THERE IS I NADEQUATE CASH FOR EXPLAINING ANY OF THE IMPUGNED CASH DEPOSIT, AO IS JUSTIFIED IN MAKING CO RRESPONDING ADDITIONS UNDER THE PROPER PROVISIONS OF THE ACT. BUT CONSIDERING THE ADMITTED POSITION IN THE MATTER IE NO SUCH CASH DEFICIT IS MADE OUT, THE CLAIMS OF THE ASSESSEE GET S OUR NOD OF APPROVAL. ACCORDINGLY, IN PRINCIPLE, THE RELEVANT GROUNDS ARE ALLOWED . 27. ISSUES RELATING TO UNSECURED LOANS/RETURN OF LOANS: UNSECURED LOANS AND REFUND OF LOANS IS CLAIMED TO BE THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNTS. IT IS THE STAND OF THE ASSESSEE THAT THE UNSECURED LOANS FROM THE CREDITORS AND THE RETURN OF THE LOANS FROM THE DEBTORS ARE THE SOURCES. IN THIS RE GARD, THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE BORROWED FUNDS FROM FRIENDS AND THE CL OSE RELATIVES WHO ARE ASSESSED TO TAX AND THE SAID CASH IS AVAILABLE IN THE SYSTEM TO ACC OUNT FOR THE IMPUGNED CASH CREDITS. IN SUPPORT, THE ASSESSEE FURNISHED THE CONFIRMATION L ETTERS BEFORE THE AO/CIT(A), THE COPIES OF WHICH ARE PLACED IN THE PAPER BOOK FILED BEFORE US TOO. WHILE MANY ARE THE OLD LOANS AND SOME OF THE LOANS ARE FRESH ONES TAKEN DURING THE Y EAR. CONFIRMATIONS FILED BY THE ASSESSEE ARE ACCEPTED BY THE REVENUE IN THE ASSESSMENT PROCE EDINGS AND THE FIRST APPELLATE PROCEEDINGS WITHOUT ANY PROTEST. FOR THE FIRST TIME BEFORE US, LD DR WAS GREATLY CRITICAL OF THE DECISIONS OF THE AO/CIT(A) IN NOT RAISING A FIN GER ON THESE IMPERFECT CONFIRMATION LETTERS AND THESE IMPERFECTIONS RELATE THEIR FORMATS AND SI GNATURE OF THE LOAN CREDITOR. LD CIT-DR WAS AWARE OF THE LEGAL POSITION IN THE MATTER AND F AIRLY MENTIONED THAT THE TRIBUNAL MAY LOOK IN TO THE MATTER. PER CONTRA, LD AR FOR THE ASSESSEE PLACED STRONG OBJECTIONS AGA INST THE ATTACKS OF LD DR AGAINST THE LOWER AUTHORITIES AND PROTESTED STRONGLY THAT CIT-DR CANNOT MAKE A NEW CASE RAISING NEW ISSUES BEFORE TH E TRIBUNAL AND RELIED ON CERTAIN DECISIONS IN SUPPORT TO HIS CLAIM. LD COUNSEL MENTI ONED THAT THE DRS DUTY IS ONLY TO DEFEND THE ISSUES RAISED IN THE APPEAL AND NOT TO MAKE A N EW CASE OUT OF THE FACTS. IN PRINCIPLE, WE AGREE WITH THE VIEW OF LD COUNSEL AND DISMISS THE A RGUMENTS OF LD DR. IT IS OBVIOUS THAT SOME OF THE CONFIRMATION LETTERS ARE SIGNED BY A CO MMON ACCOUNTANT AND THE LOAN CREDITOR OR HIS AUTHORIZED PERSONS SHOULD HAVE SIGNED. IT IS TRUE THAT THE LOWER AUTHORITIES HAVE NOT APPLIED THEIR MIND TO THESE OBVIOUS AND VERY IMPORT ANT INFIRMITIES. HOWEVER, WE FIND IT IS THE DUTY OF THE ASSESSEE TO FILE PROPER CONFIRMATION LE TTERS NOT ONLY CONFIRMING THE OPENING AND CLOSING BALANCES BUT ALSO GIVING THE FULL PARTICULA RS OF THE TRANSACTIONS REPORTED IN THE YEAR 17 SHRI VIKRAM DEOKISAN SARDA AS WELL AS THE FULL SIGNATURE OF CONCERNED CREDITOR S AND NOT HIS ACCOUNTANTS, WHO IS NOT DULY AUTHORITISED. IN ANY CASE, LD AR MADE A STATEMENT A T BAR FOR REMOVAL OF THESE INFIRMITIES BEFORE THE AO, IF A CHANCE IS GRANTED. OTHERWISE, T HE LOAN CREDITORS ARE ASSESSED TO TAX AND THEIR CREDIT WORTHINESS WAS NEVER DOUBTED BY THE AO . SUBJECTED TO THE REMOVAL OF THESE DEFICIENCIES, THUS, WE AGREE WITH THE AO WHO ACCEPT ED THE UNSECURED LOAN/REFUNDS CLAIMED BY THE ASSESSEE AS GENUINE AND THE UNSECURED LOANS AND THE REFUNDS OF THEM CONSTITUTES THE SOURCE OF THE CASH DEPOSITS. 28. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF DECEMBER, 2012. SD/- SD/- (D.K. AGARWAL) (D. KAR UNAKARA RAO) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATE : 5.12. 2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR F, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI