Madhusudhan Hirlal Malu, Pune V. Deputy Commissioner of Income-Tax, Cricle 1(1), Pune

ITA 295/PUN/2022

AI Insights

The case involves Madhusudhan Hiralal Malu, who appealed against the order of the Commissioner of Income Tax (Appeals)-11, Pune, which confirmed the addition of a cash deposit of \\u20b9 45,78,300 as unexplained under section 68 of the Income-tax Act, 1961. The cash was deposited into Malu's savings account at Mahesh Co-op Bank, and the assessing officer (AO) initially added the amount as unexplained due to inconsistencies in the source of the deposits explained by Malu. The Tribunal found that the AO had not adequately considered the cash reconciliation statement provided by Malu, which linked the cash withdrawals and subsequent deposits. Consequently, the Tribunal remanded the matter back to the AO for a detailed examination of these transactions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136223 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 03-05-2022
• Other Referred Cases: Sreelekha Banerjee & Ors. Vs CIT, Shivcharan Dass Vs CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 131; 68; 143(3); 250

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, पुणे “ए” न्यायपीठ, पुणे में ॥ ITAT-Pune Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE “A” BENCH, PUNE BEFORE HON’BLE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपऩल सं. / ITA No.295/PUN/2022 ननधधारण वषा / Assessment Year : 2014-15 Madhusudhan Hiralal Malu, 60, Nana Peth, Near Doke Talim, Pune – 411 002 PAN : AAWPM9095K . . . . . . . अपऩलधथी / Appellant बनधम / V/s. Dy. Commissioner of Income Tax, Central Circle 1(1),Pune . . . . . . . प्रत्यथी / Respondent द्वारा / Appearances Assessee by : Shri Kishor B. Phadke Revenue by : Shri Ramnath P. Murkunde सपनवधई की तधरऩख / Date of conclusive Hearing : 27/03/2023 घोषणध की तधरऩख / Date of Pronouncement : 27/03/2023 आदेश / ORDER PER G.D. PADMAHSHALI, AM; The present appeal is directed against the order of Commissioner of Income Tax (Appeals)-11, Pune [for short ‘CIT(A)’] dt. 07/04/2022 passed u/s 250 of the Income-tax Act, 1961 [for short ‘the Act’] Madhusudhan Hiralal Malu ITA No.295/PUN/2022 AY: 2014-15 ITAT-Pune Page 2 of 4 2. Briefly stated the facts of the case are that; the assessee made cash deposit on six occasions totalling to ₹45,78,300/- into his SB a/c No. SB/4620 maintained with Mahesh Co-op Bank Nana Peth Branch Pune. The Ld. AO pinpointing variation in explanation about the source thereof offered in a statement u/s 131 of the Act vis-à-vis during assessment proceedings, has made addition of entire cash deposit u/s 68 as unexplained by an order u/s 143(3) of the Act dt. 30/12/2016. The assessee carried the matter before the Ld. CIT(A) in an appeal, however the Ld. FAA not appreciating the time gap between huge cash withdrawals and its subsequent deposits in the light of Hon’ble Apex Court decision in ‘Sreelekha Banerjee & Ors. Vs CIT’ reported in 49 ITR 112 (SC), confirmed the addition u/s 68 of the Act. 3. In the course of hearing, the Ld. AR adverting to page 6-16 of paper book containing 121 pages, has reiterated all submissions made before the tax authorities to support appellant’s claim of having pre- Madhusudhan Hiralal Malu ITA No.295/PUN/2022 AY: 2014-15 ITAT-Pune Page 3 of 4 held sufficient cash balance arising out of earlier withdrawals from the same bank where cash was subsequently re-deposited. Per contra, the Ld. DR relied upon the order of tax authorities below and submitted that, the assessee indeed failed to explain the true source of cash deposit, hence the addition is justified. 4. We have heard the rival contentions of both the parties; and subject to the provisions of rule 18 of ITAT Rules, 1963 perused the material placed on record and we note the appellant raised four grounds in all, wherein first three grounds in substance are directed against sole impugned addition made u/s 68 and ground no. 4 is general in nature calling no adjudication. 5. On a careful consideration of peculiar facts of the case and submission, we are of the view that the matter requires re-consideration at the level of assessing officer for the reason brushing aside the cash reconciliation statement brought on record by the assessee, whereby he tried to explain pre-deposit cash balance held by him. Madhusudhan Hiralal Malu ITA No.295/PUN/2022 AY: 2014-15 ITAT-Pune Page 4 of 4 6. In the extant we observed that, certain cash withdrawals were preceded the cash deposits to which the Ld. AO turned blind eye without first brining out on record the utilization thereof so has to reject the claim cash balance pre-available. For the reason following the ration laid down by Hon’ble Punjab & Haryana High Court, in ‘Shivcharan Dass Vs CIT’ [1980] 126 ITR 263, the Ld. AO is directed to reframe the assessment de-nova considering the link between cash withdrawal within three months prior to its deposit into bank, however after giving reasonable opportunity of being heard to the assessee. 2. Resultantly, assessee’s appeal is allowed for STATISTICAL PURPOSE. In terms of rule 34 of ITAT Rules, 1963 the order is pronounced in the open court on this Tuesday 27 th day of March, 2023. -S/d -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 12 th day of May, 2023. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1. अपऩलधथी / The Appellant. 2.प्रत्यथी / The Respondent. 3. The Pr. CIT (Central), Pune 4. The CIT(A)-11, Pune (Mh-India) 5. DR ITAT, “A” Bench, Pune. 6. गधर्ाफ़धइल / Guard File. Ashwini आदेशधनपसधर / BY ORDER, वररष्ठ ननजऩ सनिव / Sr. Private Secretary आयकर अपऩलऩय न्यधयधनधकरण, पपणे / ITAT, Pune.