SHRI SURENDRA SINGH, Jaipur V. ITO, Jaipur

ITA 650/JPR/2011

• Counselvise Citation: 65023114 RSA 2011
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 30-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BINOD JOHARY
• Keywords: Residential status; Peak credit; Corroborative evidences

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L. KALRA) ITA NO.650/JP/2011 ASSESSMENT YEAR : 2008-2009 SH. SURENDRA SINGH VS. INCOME TAX OFFICER, C-235, KAUSHLYA MARG, WARD-3(1), HANUMAN NAGAR, JAIPUR. JAIPUR. ITA NO.701/JP/2011 ASSESSMENT YEAR : 2008-2009 INCOME TAX OFFICER, VS. SH. SURENDRA SINGH WARD-3(1), C-235, KAUSHLYA MARG, JAIPUR. HANUMAN NAGAR, JAIPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL DEPARTMENT BY : SHRI BINOD JOHARY DATE OF HEARING: 25.01.2012 DATE OF PRONOUNCEMENT: 31.01.2012 ORDER PER SHRI N.L. KALRA, A.M. 1. THE ASSESSEE AS WELL AS REVENUE HAVE FILED APPEA LS AGAINST ORDER OF LD. CIT (A)-I JAIPUR DATED 19.05.2011. THE GROUND OF APPEALS RAISED BY T HE ASSESSEE & REVENUE ARE AS UNDER: ASSESSEE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN H OLDING THAT DEPOSIT MADE BY ASSESSEE IN ITS NRO BANK ACCOUNT IS UNEXPLAINED. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED ON FACTS AND IN LAW IN CONFIRMING ADDITION TO THE EXTENT OF PEAK CREDIT IN HIS NRO BANK ACCOUNT WITHOUT GIVING THE BENEFIT OF CASH WITHDRAWALS FROM THE BAN K ACCOUNT OF ASSESSEES FATHER RS.32,88,000/- IN WORKING OUT PEAK CREDIT. REVENUE WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT (A) IS JUSTIFIED IN RESTRICTING THE ADDITION OF RS. 45,32,100/- MADE U/S 69 OF THE I.T. ACT, 1961 TO RS.31,16,600/- BY DIRECTING THE A.O. T O APPLY PEAK CREDIT THEORY TO WORK OUT UNEXPLAINED CASH DEPOSITS IN THE BANK ACCO UNT. 2. FACTS OF THE CASE ARE AS UNDER: 2 ASSESSEE BORN ON 26.01.1977 WENT TO KHAZAKHSTAN IN THE YEAR 1966 FOR PURSUING HIS COURSE IN MBBS. HE COMPLETED HIS EDUCATION IN THE YEAR 2003. AFTER COMPLETING HIS EDUCATION, HE AGAIN WENT TO KHAZAKHS TAN ON 14.01.2004 AND SINCE THEN HE IS ENGAGED IN THE BUSINESS OF SUPPLY OF MAR BLES ON COMMISSION BASIS. HE WAS A NON RESIDENT FROM A.Y. 2005-06 TO A.Y. 2007-0 8. IN A.Y. 08-09, HE STAYED IN KHAZAKHSTAN ONLY FOR 126 DAYS & CAME BACK TO INDIA, THEREBY BECOMING RESIDENT OF INDIA FOR THE YEAR UNDER CONSIDERATION. HIS PERI OD OF STAY IN KHAZAKHSTAN IS FROM A.Y. 05-06 TO A.Y. 08-09. IN THE YEAR UNDER CONSIDERATION, ASSESSEE OPENED TW O BANK ACCOUNTS WITH AXIS BANK, ONE NRO ACCOUNT ON 03.07.2007 AND ANOTHER NRE ACCOUNT ON 10.08.2007. AO FOUND THAT ASSESSEE HAS DEPOSITED A SUM OF RS. 4 5,32,100/- ON DIFFERENT DATES AS MENTIONED ON PAGE 2 OF THE ASSESSMENT ORDER IN T HE NRO BANK ACCOUNT MAINTAINED WITH AXIS BANK. ASSESSEE VIDE LETTER DAT ED 16-11-2010 EXPLAINED THAT THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT IS O UT OF WITHDRAWALS FROM THE FATHERS ACCOUNT AND HIS NRE ACCOUNT OUT OF THE REM ITTANCE SEND BY HIM FROM KHAZAKHSTAN. A CASH FLOW STATEMENT WAS ALSO SUBMITT ED. AO, HOWEVER, DID NOT ACCEPTED THE EXPLANATION OF TH E ASSESSEE ONLY FOR THE REASON THAT THE WITHDRAWALS HAVE BEEN MADE FROM TIME TO TI ME WHICH SHOWS THAT IT MUST HAVE BEEN MADE FOR SOME SPECIFIC PURPOSE AND THEREF ORE IT CANT BE ACCEPTED THAT IT REMAINED TILL THE AMOUNT WAS DEPOSITED IN CASH I N THE NRO BANK ACCOUNT OF THE ASSESSEE. HE FURTHER OBSERVED THAT THERE IS GAP BET WEEN THE AMOUNT WITHDRAWN FROM THE BANK ACCOUNT OF ASSESSEES FATHER/NRE ACCO UNT OF THE ASSESSEE AND THE AMOUNT DEPOSITED IN THE NRO ACCOUNT. ACCORDINGLY, H E MADE ADDITION OF RS. 45,32,100/- U/S 69 FOR THE ENTIRE DEPOSIT IN THE BA NK ACCOUNT. CIT(A) CONFIRMED THE ADDITION OF RS. 31,16,600/- BY APPLYING THE THEORY OF PEAK CREDIT IN THE NRO BANK ACCOUNT OF THE ASSESSEE. IN DOING SO, HE GAVE THE FOLLOWING. I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER OF T HE AO & THE SUBMISSIONS OF THE AR. I FIND MERIT IN THE OBSERVATION OF THE AO THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING WAS NOT ABLE TO GIVE SATIS FACTORY EXPLANATION REGARDING THE SOURCE OF THE CASH DEPOSITS IN HIS BANK ACCOUNT . ON PERUSAL OF THE DETAILS FILED BEFORE ME, IT IS SEEN THAT AMOUNT WAS REMITTED FROM THE BANK OF KHAZAKHSTAN NOT ONLY TO THE FATHER OF THE ASSESSEE BUT ALSO TO ANNU SINGH AND OMPATIDEVI ALL RESIDENTS OF CHIRAWA DIST. JHUNJHUNU AND PROBABLY T HE FAMILY MEMBERS. THIS MONEY WAS REMITTED FOR THE PURPOSE OF FINANCIAL SU PPORT AS MENTIONED IN THE BANK ACCOUNT COPY OF BANK OF KHAZAKHSTAN. FROM THE FACTS BROUGHT ON A RECORD IT IS SEEN THAT FOR THE PAST 3 A.YS, ASSESSEE WAS AN NRI AND ONLY THIS YEAR HE HAD SPEND ONLY 126 DAYS IN KHAZAKHSTAN. THUS, EARLIER HE WAS A RESIDENT IN KHAZAKHSTAN WHO WAS RE MITTING MONEY FROM TIME TO 3 TIME TO HIS FAMILY IN JHUNJHUNU FOR THEIR FINANCIAL SUPPORT. THE FATHER OF THE ASSESSEE WITHDREW LARGER CHUNKS OF MONEY I.E. RS. 5 LACS ON 16.02.2007 (THE VERY DATE IT WAS DEPOSITED IN THE BANK) THEN ANOTHER RS. 5 LACS ON 09.03.2007 AND RS. 5.20 LACS ON 10.03.2007, RS. 7.40 LACS ON 16.04.200 7, RS. 0.63 LACS ON 31.05.2007 AND RS. 9.65 LACS ON 01.06.2007. IT IS NOT CLEAR TH AT, WHEN THIS MONEY WAS BEING RECEIVED BY THE FATHER FOR HIS FINANCIAL SUPPORT AN D WITHDRAWN FROM TIME TO TIME TO MEET CERTAIN EXPENDITURES HOW COULD IT HAVE BEEN AVAILABLE THREE TO FOUR MONTHS LATER FOR DEPOSITS TO BE MADE BY THE SON IN HIS NRO ACCOUNT. I DONT FIND THE SUBMISSION OF THE AR THAT THE ASSESSEE HAD THE BENEFIT OF AVAILABILITY OF CASH BALANCE OF RS. 32.88 LACS ACCEPTABLE. THE ASSESSEE, NOR HIS FATHER HAD MAINTAINED ANY CA PITAL ACCOUNT. I ALSO DONT AGREE WITH THE SUBMISSION OF THE AR THAT THE AO WAS REQUIRED TO BRING MATERIAL AND SUPPORT FOR HIS PRESUMPTION. ONCE THE CASH DEPO SITS HAD BEEN FOUND, THE ONUS WAS ON THE ASSESSEE TO EXPLAIN THE SOURCES OF THE S AME AND TO CORROBORATE HIS EXPLANATION WITH ADEQUATE EVIDENCE. THE ASSESSEE HA S FAILED TO DISCHARGE THIS ONUS. INSPITE OF REPEATED OPPORTUNITIES THE ASSESSE E HAS ALSO NOT FURNISHED ANY EVIDENCE BY WAY OF DETAILS OF INVESTMENTS MADE BY T HE ASSESSEE AND HIS FAMILY MEMBERS TO PROVE THE VERACITY OF HIS SUBMISSION REG ARDING THE CASH AVAILABLE WITH THE ASSESSEE. IT IS NOT CLEAR HOW THE AO WAS TO PRO CEED IN HIS INVESTIGATION IN THE ABSENCE OF ANY EVIDENCE ON RECORD FILED BY THE ASSE SSEE. THE SUBMISSION OF THE AR DURING THE COURSE OF HEAR ING BEFORE ME THAT THE AMOUNT WAS WITHDRAWN AND DEPOSITED BY THE ASSESSEE IN HIS NRO ACCOUNT FOR BUSINESS PURPOSE HAS ALSO NOT BEEN CLEARLY STATED OR DEFINED . WHAT WAS THE NATURE OF BUSINESS PURPOSE, WHAT WAS THE SUPPORTING EVIDENCE I.E. BILLS, IOUS ETC. THAT CORROBORATE THE SUBMISSION OF THE ASSESSEE THAT THE SE TRANSACTIONS WERE FOR BUSINESS PURPOSE. IN THE ABSENCE OF ANY PLAUSIBLE E XPLANATION REGARDING THE DEPOSITS AND WITHDRAWALS OF CASH IN THE BANK ACCOUN T OF THE ASSESSEE AND ABSENCE OF ANY CORROBORATIVE EVIDENCE FOR THE EXPLANATION G IVEN, I HOLD THESE TRANSACTIONS TO BE UNEXPLAINED. HOWEVER, THE PEAK CREDIT THEORY IS THE ACCEPTED ACCOUNTING PRACTICE FOR SUCH CASES AND MAY BE APPLIED TO THE C ASH DEPOSITS & WITHDRAWALS BY THE ASSESSEE IN HIS NRO ACCOUNT WITHOUT GIVING THE BENEFIT OF THE CASH WITHDRAWALS FROM THE FATHERS BANK ACCOUNT ALLEGED TO HAVE BEEN AVAILABLE WITH HIM, FOR THESE TRANSACTIONS. IN PARA 6.3 & 6.4 OF THE ORDER, THE LD. CIT(A) TRI ED TO DISTINGUISH THE CASES RELIED BY THE ASSESSEE. 3. BEFORE US THE LD. A/R HAS FILED THE SUBMISSIONS AS UNDER: THERE IS NO DISPUTE AS TO THE FACT THAT ASSESSEE OP ENED TWO BANK ACCOUNTS WITH AXIS BANK, ONE NRO ACCOUNT ON 03.07.2007 AND ANOTHE R NRE ACCOUNT ON 10.08.2007. PRIOR TO OPENING OF THESE ACCOUNTS, REM ITTANCES WERE SEND BY 4 ASSESSEE FROM KHAZAKHSTAN TO HIS FATHERS ACCOUNT. HE REMITTED RS. 13,33,912/- ON 05.03.2007 & RS. 10,28,861/- ON 16.05.2007 FROM HIS BANK ACCOUNT MAINTAINED WITH THE BANK AT KHAZAKHSTAN TO HIS FATH ERS, SH. GANESHI LAL, BANK ACCOUNT. THE SAME WAS CREDITED IN THE BANK ACCOUNT OF THE FATHER ON 06.03.2007 & 18.05.2007 RESPECTIVELY AS EVIDENT FROM THE COPY OF BANK ACCOUNT. OUT OF THE ABOVE AMOUNT & THE AMOUNT ALREADY LYING IN THE BANK ACCOUNT OF ASSESSEES FATHER, HE WITHDREW, RS.15,20,000/- IN T HE MONTH OF FEB AND MARCH 2007 AND RS.17,68,000/- IN THE MONTH OF APRIL TO JU NE 2007 . AFTER THE ASSESSEES OPENED THE NRO BANK ACCOUNT ON 03.07.2007, PART OF THE AMOUNT, WITHDRAWN FROM THE BANK ACCOUNT OF ASSESSEES FATHER WAS DEPO SITED IN THE NRO BANK ACCOUNT OF THE ASSESSEE FROM TIME TO TIME. THUS, IN ALL, THERE WAS AVAILABILITY OF FUNDS OF RS.32.88 LACS UPTO JUNE 2007 FROM THE REMI TTANCES SEND BY ASSESSEE IN HIS FATHERS ACCOUNT & THE AMOUNT LYING IN THE ACCO UNT OF FATHER HIMSELF. FURTHER, ASSESSEE HAS ALSO REMITTED RS.13,92,588/- ON 07.08. 2007 FROM HIS BANK ACCOUNT MAINTAINED WITH THE BANK AT KHAZAKHSTAN IN HIS NRE ACCOUNT OPENED ON 10.08.2007. OUT OF SAME, RS. 9 LACS WERE WITHDRAWN IN CASH ON 24.08.2007 & DEPOSITED BY ASSESSEE IN HIS NRO ACCOUNT. THESE WIT HDRAWALS COVERS THE DEPOSIT IN THE NRO BANK ACCOUNT OF THE ASSESSEE & THUS THE SOURCE OF DEPOSIT IN THE NRO BANK ACCOUNT OF ASSESSEE IS FULLY VERIFIABLE. THE NRO ACCOUNT WITH AXIS BANK WAS OPENED ON 03-07- 2007 . IN THIS ACCOUNT, AMOUNTS WERE DEPOSITED IN CASH FROM TIME TO TIME AN D ALSO WITHDRAWN IN CASH FROM TIME TO TIME. THE NET DEPOSIT IN THE NRO ACCOU NT IS RS.18,70,350/- AND THE PEAK DEPOSIT IS RS. 31,16,600/- ON 28-01-2008 . THIS AMOUNT WAS DEPOSITED OUT OF CASH OF RS. 32.88 LACS WITHDRAWN FROM THE ACCOUNT O F THE FATHER AND WITHDRAWALS OF RS. 9 LACS FROM HIS NRE ACCOUNT OUT OF THE REMIT TANCE SEND BY THE ASSESSEE FROM KHAZAKHSTAN AS EXPLAINED ABOVE. THE STATEMENT OF THE AVAILABILITY OF THE CASH IS SHOW THAT AMOUNT DEPOSITED IN THE NRO ACCOU NT IS FULLY VERIFIABLE. CIT(A) HAS NOT GIVEN THE BENEFIT OF AMOUNT WITHDRAW N FROM THE BANK ACCOUNT OF ASSESSEES FATHER FOR THE REASON THAT THERE IS TIME GAP BETWEEN THE WITHDRAWAL & DEPOSIT IN ASSESSEES BANK ACCOUNT. HE ALSO IN PA RA 6.3 & 6.4 TRIED TO DISTINGUISH THE CASES RELIED BEFORE IT ON SUPERFLUO US GROUND IGNORING THE PRINCIPAL LAID DOWN IN THESE CASES. IT MAY BE NOTED THAT THE GAP BETWEEN THE WITHDRAWAL FROM THE BANK ACCOUNT OF ASSESSEES FATHER & DEPOSI T IN NRO ACCOUNT OF ASSESSEE IS NOT SUBSTANTIAL. FURTHER, OUT OF THE WITHDRAWAL OF RS.32,88,000/- FROM THE BANK ACCOUNT OF ASSESSEES FATHER, ONLY RS. 22,16,600/- [RS.32.88 LACS- RS.10,71,400 WAS UTILIZED BY THE ASSESSEE FOR DEPOSIT IN THE BAN K ACCOUNT. THIS AMOUNT IS LESS THAN THE AMOUNT OF RS. 23,62,773/- (RS.13,33,912+ R S.10,28,861) WHICH THE ASSESSEE REMITTED TO HIS FATHERS ACCOUNT FROM KHAZ AKHSTAN. CIT(A) HAS FURTHER NOT ALLOWED THE CREDIT OF THE AM OUNT WITHDRAWN FROM THE BANK ACCOUNT OF THE ASSESSEES FATHER FOR THE REASON THA T ASSESSEE HAS REMITTED THE MONEY TO HIS FATHERS ACCOUNT FOR FINANCIAL SUPPOR T. THIS IS THE MANNER IN WHICH THE AMOUNT IS REMITTED. IT DOSE NOT MEAN THAT THE AMOUNT SO REMITTED IS 5 CONSUMED BY ASSESSEES FATHER. INFACT, THE ASSESSEE S FATHER IS AN AGRICULTURIST. HE OWNS AROUND 140 BIGHA OF AGRICULTURAL LAND. HE RESI DES IN VILLAGE MAWATHRI, CHIRAWA, JHUNJHUNU. THE LAND IS FERTILE HAVING IRRI GATION FACILITY. THE FATHER HAS SUBSTANTIAL AGRICULTURAL INCOME OF HIMSELF & THEREF ORE SIMPLY BECAUSE THE REMITTANCE IS SEND FOR FINANCIAL SUPPORT, DOES NOT MEAN THAT THE AMOUNT WITHDRAWN BY THE ASSESSEES FATHER FROM HIS BANK OU T OF SUCH REMITTANCE WAS NOT AVAILABLE WITH HIM. FURTHER, WHEN ASSESSEE HAS CATE GORICALLY STATED THAT THIS AMOUNT IS NOT UTILIZED ELSEWHERE BUT DEPOSITED BY H IM IN HIS BANK ACCOUNT WHICH WERE OPENED AFTER THE AMOUNTS WAS WITHDRAWN FROM TH E BANK ACCOUNT OF HIS FATHER & THERE IS NO EVIDENCE OTHERWISE TO INFER THAT THE SAME WAS UTILIZED ELSEWHERE, CREDIT OF SUCH WITHDRAWAL OUGHT TO HAVE BEEN GIVEN. INFACT THE CIT(A) HIMSELF HAS ACCEPTED THE THEORY OF PEAK CREDIT & THEREFORE THE CREDIT OF AMOUNT WITHDRAWN FROM THE BANK ACCOUNT OF ASSESSEES FATHER SHOULD N OT BE DENIED. RELIANCE IN THIS CONNECTION IS PLACED ON THE FOLL OWING CASES:- R.K. DAVE VS. ITO 94 TTJ 19 (JOD.) (TRIB.) ASSESSEE INVESTED A SUM OF RS.15,000/- IN NSCS ON 0 8.02.1991, AND RS. 5,000/- IN PPF. IT STATED THAT AMOUNTS OF RS. 15,000/- AND RS. 5,000/- WERE DEPOSITED OUT OF WITHDRAWALS OF RS. 45,000/- MADE ON 9.07.1990 & 10. 07.1990 & INVESTMENT IN THE NSCS WAS MADE ON 08.02.1991, I.E., AFTER A GAP OF SEVEN MONTHS. AO MADE ADDITION OF RS. 20,000/- BY HOLDING THAT THERE WAS NO EVIDENCE THAT THE AMOUNT WITHDRAWN ON EARLIER DATES WAS AVAILABLE WITH THE A SSESSEE FOR MAKING INVESTMENT IN NSCS. THE SAME POSITION WAS FOUND WITH REFERENCE TO INVESTMENT IN PPF. ON APPEAL, THE LD. CIT(A) UPHELD THE ADDITION ON THE G ROUND THAT THERE WAS A TIME GAP BETWEEN THE WITHDRAWALS AND FOR MAKING INVESTME NT IN THE NSCS WHICH THE ASSESSEE COULD NOT EXPLAIN SATISFACTORILY. HONBLE ITAT HELD THAT ASSESSEE HAD PLACED CASH FLOW STATEMENT BEFORE THE AUTHORITIES B ELOW. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAD WITHDRAWN AN AMOUNT OF RS. 45 ,000/- ON 09.07.1990 AND 10.07.1990. IT IS NOT THE CASE OF THE REVENUE THAT AMOUNTS SO WITHDRAWN WERE UTILIZED ELSEWHERE. MERE FACT THAT THE ASSESSEE COU LD NOT EXPLAIN THE TIME GAP BETWEEN THE AMOUNT WITHDRAWN AND THE INVESTMENT IN NSCS OR WHERE THE AMOUNT WAS KEPT WOULD NOT ITSELF JUSTIFY THE ADDITION. THE CLAIM OF THE ASSESSEE COULD HAVE BEEN REJECTED ONLY IF THE SOURCE OF BALANCE IN THE BANK ACCOUNT WAS NOT ESTABLISHED OR IT COULD HAVE BEEN DEMONSTRATED THAT THE AMOUNT SO WITHDRAWN WAS UTILIZED ELSEWHERE. THIS IS NOT THE CASE HERE. THER EFORE, THERE IS NO JUSTIFICATION FOR SUSTAINING THE IMPUGNED ADDITION. ACIT VS. BALDEV RAJ CHARLA & ORS. 121 TTJ 366 (DEL. ) (TRIB.) HONBLE ITAT VIDE PARA 27 HELD AS UNDER:- WE FIND THAT THIS EXPLANATION OF THE ASSESSEE WAS FOUND CORRECT THAT AGAINST THESE FIVE DEPOSITS ON DT. 14.06.1996, RS. 31,000; 21.0 7.1997, RS.1,27,000; 18.09.1997, RS. 22,000; 4.10.1997, RS.26,000 AND ON 7.11.1997 , RS. 52,000 THERE WERE SUFFICIENT CASH WITHDRAWALS FROM AWI AND FROM SBI , MAYAPURI, BUT THIS ADDITION HAS BEEN CONFIRMED BY LEARNED CIT(A) ON THE BASIS THAT THERE IS TIME GAP BETWEEN 6 THE ASSESSEES WITHDRAWALS FROM HIS OWN PARTNERSH IP M/S AWI OR FROM HIS OWN BANK. THERE IS FINDING RECORDED BY THE LEARNED AO OR BY LEARNED CIT(A) THAT APART FROM DEPOSITING THESE CASH INTO BANK AS EXP LAINED BY THE ASSESSEE, THERE WAS ANY OTHER USER BY THE ASSESSEE OF THESE AMOUN TS AND IN THE ABSENCE OF THAT, SIMPLY BECAUSE THERE WAS A TIME GAP, THE EXPLANAT ION OF THE ASSESSEE CANNOT BE REJECTED AND HENCE THE ADDITION CONFIRMED BY THE LEARNED CIT(A) IS NOT CORRECT. SHRI HEMANT PRABHAKAR VS. DCIT IN ITA NO. 684/JP/ 98/ 31 TAX WORLD 198 DATED 12-03-04 (JPR.) IT WAS HELD THAT THE WEHERE THE ASSESSEE HAS WITH DRAWN CASH FROM THE BANK ACCOUNT AND DEPOSITED THE SAME AFTER 14 MONTHS WH ICH WAS SHOWN AS CASH BALANCE IN CASH FLOW STATEMENT, THE SAID CASH IS FULLY EXPLAINED AND THE ADDITION IS DELETED. VINOD KUMAR GOYAL VS ACIT IN ITA NO. 310/JP/08 DATE D 30-05-08 (JPR.) IN THIS CASE THE ASSESSEE WITHDRAWN THE AMOUNT F ROM THE BANK AROUND ONE TO ONE AND HALF YEAR BACK AND RE-DEPOSITED THE SAME. IT WAS HELD THAT THE LOWER AUTHORITIES WERE NOT JUSTIFYING IN DISBELIEVING T HE EXPLANATION OF THE ASSESSEE THAT THE MONEY WITHDRAWN FROM THE BANK WAS LYING WITH THE ASSESSEE TILL IT WAS INTRODUCED IN M/S GOYAL BROTHERS. IN VIEW OF THE ABOVE, ADDITION OF RS. 31,16,600/- CONFIRMED BY CIT(A) BE DELETED & THE GROUND OF THE DEPARTMENT BE DISMISSED. 4. ON THE OTHER HAND, THE LD. D/R SUPPORTED THE ORD ER OF AUTHORITIES BELOW: 5. WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE HAS SHOWN INCOME FROM BUSINESS AT RS.1,08,470/- AND HAS SHOWN INCOME FROM OTHER SOURC ES AT RS.1,80,140/- WITH THE RETURN OF INCOME. THE ASSESSEE HAS NOT ATTACHED THE DETAILS O F TURNOVER OR CAPITAL ACCOUNT. ON OUR QUERRY, IT WAS STATED THAT IN THE SUBSEQUENT YEAR ALSO THER E WERE DEPOSITS AND WITH DRAWLS IN THE BANK ACCOUNT AND THE A.O. HAS NOT MADE ANY ADDITION. 6. WE ARE REPRODUCING THE CASH FLOW STATEMENT OF ON E BANK A/C AS UNDER: 01.04.07 RS.15,20,000/- WITHDRAWN ON DIFFERENT DATES FROM 16.4.2007 TO 1.6.2007 RS.17,68,000/- RS.32,88,000/- DEPOSIT ON 3.7.2007 RS.6,00,000/- RS.26,88,000/- WITHDRAWAL FROM 9.7.2007 TO RS.14,08,500/- RS.40,96,500/- 7 20.10.2007 DEPOSIT ON 30.10.07 RS.12,00,000/- RS.28,96,500/- DEPOSIT ON 2.11.2007 RS.5,37,500/- RS.23,59,000/- DEPOSIT FROM 6.11.2007 TO 16.12.2007 RS.3,35,000/- RS.26,94,000/- DEPOSIT ON 28.12.07 RS.12,00,000/- RS.60,000/- RS.1 5,54,000/- WITHDRAWAL FROM 2.1.2008 TO 21.1.2008 RS.2,62,000/- RS.18,16,000/- DEPOSIT ON 28.1.2008 RS.7,44,600/- RS.10,71,400/- WITHDRAWAL FROM 12.2.08 TO 24.3.2008 RS.14,96,250/- RS.25,61,650/- DEPOSIT ON 28.3.08 RS.2,50,000/- RS.23,17,650/- PERUSAL OF THE BANK ACCOUNT SHOW WITHDRAWAL OF LESS THAN 50,000/- ON DIFFERENT DATES. BALANCE RS.27,88,000/- 09.07.2007 RS.50,000/- RS.28,38,000/- 30.07.2007 RS.10,000/- RS.29,13,000/- 06.08.2007 RS.8000/- RS.29,21,000/- 23.08.2007 RS.20,000/- RS.30,41,000/- 25.08.2007 RS.50,000/- RS.39,91,000/- 27.08.2007 RS.10,000/- RS.40,01,000/- 29.08.2007 RS.10,000/- RS.40,11,000/- 01.09.2007 RS. 7,000/- RS. 40,18,000/- 03.09.2007 RS. 43,000/- RS. 40,61,000/- 11.09.2007 RS. 10,500/- RS. 40,71,500/- 13.09.2007 RS. 5,000/- RS. 40,76,500/- 29.09.2007 RS.5,000/- RS.40,81,500/- 01.10.2007 RS.13,000/- RS.40,94,500/- 20.10.2007 RS.2,000/- RS.40,96,500/- 08.11.2007 RS.50,000/- RS.24,09,000/- 8 12.11.2007 RS.20,000/- RS.24,37,000/- 16.11.2007 RS.7,000/- RS.24,44,000/- 19.11.2007 RS.5,000/- RS.24,49,000/- 21.11.2007 RS.11,000/- RS.24,60,000/- 27.11.2007 RS.5,000/- RS.24,65,000/- 28.11.2007 RS.13,000/- RS.24,78,000/- 04.12.2007 RS.30,000/- RS.26,33,000/- 10.12.2007 RS.11,000/- RS.26,44,000/- 11.12.2007 RS.25,000/- RS.26,69,000/- 15.12.2007 RS.5,000/- RS.26,74,000/- 16.12.2007 RS.20,000/- RS.26,94,000/- 10.01.2008 RS.2,000/- RS.16,16,000/- 06.02.2008 RS.50,000/- RS.11,21,400/- 12.02.2008 RS.45,000/- RS.11,66,400/- 20.02.2008 RS.10,000/- RS.15,31,400/- 05.03.2008 RS.6,250/- RS.25,27,650/- 17.03.2008 RS.5,000/- RS.25,32,650/- 24.03.2008 RS.35,000/- RS.25,67,650/- 7. LOOKING TO THE QUANTUM OF WITHDRAWAL MADE ON DIF FERENT DATES VIS--VIS THE AVAILABLE CASH IN HAND AND FREQUENCY OF SUCH WITHDRAWALS SUGG EST THAT FUNDS HAVE BEEN USED FOR THE PURPOSE OF BUSINESS AND WHEN THE FUNDS ARE AVAILABL E THEN THOSE ARE DEPOSITED IN BANK A/C. DEPOSIT OF RS.5,37,500/- AND DEPOSIT OF RS.7,44,600 /- DO SUGGEST THAT AMOUNT RECEIVED BACK IN BUSINESS WERE DEPOSITED. THE ASSESSEE HAS NOT MAINT AINED THE BOOKS OF ACCOUNT. THE ONUS WAS ON THE ASSESSEE TO HAVE EXPLAINED THE REASONS FOR SUCH WITHDRAWAL WHEN THERE IS CASH IN HAND AVAILABLE. ON THE BASIS OF HUMAN PROBABILITY, WE FE EL THAT THE ASSESSEE HAS UTILIZED THE FUNDS FOR BUSINESS AND WITHDRAWAL & DEPOSIT IN BANK ACCOUNT M IGHT HAVE BEEN ARISING FROM BUSINESS. 9 LOOKING TO THE PEAK CASH BALANCE, WE FEEL THAT IT W ILL BE FAIR AND REASONABLE TO ESTIMATE THAT DEPOSIT TO THE EXTENT OF RS.2 LAKH MAY BE OUT OF FU NDS USED IN BUSINESS. 8. IT IS NOT A CASE WHERE THE ENTIRE DEPOSIT CAN BE ADDED AS THE ASSESSEE HAS MADE WITHDRAWALS FROM BANK. HENCE THE ADDITION CONFIRMED BY LD. CIT (A) TO THE EXTENT OF RS.32,88,000/- IS RESTRICTED TO RS.2 LAKH. IN THE RESULT THE APPEAL OF ASSESSEE IS PARTLY ALL OWED AND APPEAL OF REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN OPEN COURT ON 31.01.201 2 SD/- SD/- (R.K.GUPTA) (N.L.KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31.01.2012 *S.KUMAR* COPY FORWARDED TO:- 1. SH. SURENDRA SINGH, C-235, KAUSHLYA MARG, HANUMA N NAGAR, JAIPUR. 2. INCOME TAX OFFICER, WARD-3(1), JAIPUR. 3. THE CIT 4. THE CIT(A), 5. THE D/R, ITAT, JAIPUR 6. THE GUARD FILE IN ITA NOS.650 & 701/JP/2011 BY ORDER A.R., I.T.A.T., JAIPUR 10