KISHORE SINGH SHEKHAWAT,BJS COLONY JODHPUR V. ITO, WD-1(1), JAIPUR

ITA 230/JPR/2024

AI Insights

The case revolves around an appeal by Kishore Singh Shekhawat against the order of the CIT (Appeals), which partly allowed his appeal against the AO's addition of Rs. 1,09,28,800/- to his income for AY 2014-15, based on alleged unaccounted cash deposits. The Tribunal examined the discrepancies in the figures cited by the AO and the actual bank statements provided by the assessee, which showed a total deposit of Rs. 20,63,300/- against the AO's claim. The Tribunal noted that the AO had considered three different figures for the same bank account without verification, leading to an erroneous addition. The Tribunal also acknowledged the assessee's submissions regarding the source of the deposits being from earlier withdrawals and past savings, which were supported by balance sheets and other documents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28451 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA RINES H
• Keywords: Source of fund
• Section: 147; 148; 144; 142(1); 250

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh xxu xks;y] ys[kk lnL;] ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM vk;dj vihy la-@ITA No. 230/JP/2024 fu/kZkj.k o\"kZ@Assessment Year : 2014-15 Kishore Singh Shekhawat, 120A 25B BJS Colony, B/H RTO Office, Jodhpur. cuke Vs. The ITO, Ward 1(1) Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No. BAEPS 9577 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : None jktLo dh vksj ls@Revenue by : Mrs. Anita Rinesh, JCIT lquokbZ dh rkjh[k@Date of Hearing: 21/11/2024 ?kks\"k.kk dh rkjh[k@Date of Pronouncement: 07/01/2025 vkns'k@ORDER PER DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. CIT (Appeals), National Faceless Appeal Centre (NFAC) Delhi dated 29.12.2023 passed under section 250 of the I.T. Act, 1961, for the assessment year 2014-15. The assessee has raised the following grounds of appeal :- 1. CIT (Appeal) admitted that a cash of only Rs. 20,63,300/- has been deposited into bank instead of Rs. 10,09,28,800/- as the AO established in his order. 2. During the FY 2013-14, total cash deposit into bank was Rs. 20,63,300/- & total csh withdrawals from bank was Rs. 19,87,650/- this means assessee had deposited the same cash which was earlier withdrawn from bank. But CIT (Appeals) allows only Rs. 3,10,000/- as cash withdrawn. 2 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. 3. CIT (Appeals) had allowed a cash balance of only Rs. 2,00,000/- out of the previous years savings which seems very much on lower side booking to the status of the assessee. Also assessee is a regular tax payer since last 10 years. 2. The brief facts of the case are that the assessee has not filed his return of income for AY 2014-15 despite having huge transactions. On the basis of information collected by the AO, it is noticed that the assessee maintains bank account with ICICI Bank Ltd., Jodhpur. During the financial year 2013-14 relevant to assessment year 2014-15 the bank accounts of the assessee were credited by amount as detailed below:- Account No. and Bank name Cash Deposits Deposits other than cash 16701587087 ICICI Bank Ltd., Jodhpur. Rs. 8110500/- 16701587087 ICICI Bank Ltd., Jodhpur. Rs. 2063300/- 16701587087 ICICI Bank Ltd., Jodhpur. Rs. 755000/- Total : Rs. 1,09,28,800/- The case of the assessee was reopened by issuing notice under section 148 of the IT Act, 1961 on 31.03.2021 under a reasonable belief that the income has escaped assessment within the meaning of provisions of section 147 of the Act, 1961 after recording the reasons. In response to the notice under section 148 of the IT Act, 1961 the assessee has failed to file his return of income. Since no response has been made to the notice under section 148 of the Act, 1961, the AO initiated proceedings under section 147 of the IT Act and notice under section 142(1) of the Act was issued on 17.11.2021 requiring the assessee to furnish requisite information. Further notices under section 142(1) of the Act on 30.1.2.2021 and 29.01.22 were issued and duly served to the 3 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. assessee via mail. However, the assessee failed to respond to any of the notices issued. Show cause notice dated 26.02.2022 was issued to the assessee providing final opportunity to provide requisite information/details. Since no response was made by the assessee, the AO completed the assessment under section 144 of the IT Act, 1961 by making an addition of Rs. 1,09,28,800/- as assessed total income of the assessee. Aggrieved by the order of AO, the assessee preferred appeal before the ld. CIT (Appeals). The ld. CIT (Appeals) considering the submissions of the assessee, partly allowed the appeal of the assessee. Now, being aggrieved by the order of ld. CIT (A), the assessee has come in appeal before us. 3. Before us, none appeared on behalf of the assessee. The ld. A/R sent his written submission and requested to consider the same, which are reproduced as under :- “ Assessee had filed an appeal with the CIT (Appeals) being aggrieved by the order passed by the AO. Appeal was partly allowed in assessee’sfavour. AO, under section 69A, wrongly added a sum of Rs. 1,09,28,800.00 in the total income, on account of being cash deposited into bank. CIT appeals admitted that actually, only Rs. 20,63,300.00 was deposited into bank. Assessee, during the course of appeal proceedings, submitted that this cash was deposited out of the earlier withdrawals (current & previous financial year) from the bank and out of his old savings which is duly reflected in his balance sheets prepared over the years. Balance sheets of earlier years were duly filed with return of income filed for the respective year. Balance sheets for the year ended 31.03.11, 31.03.12, 31.03.13 & 31.03.14 are also enclosed herewith for your reference. The same was also submitted to the CIT (A) but he didn’t consider the cash balance generated year by year which is shown in the balance sheet. An abstract summary of cash account (deposit & withdrawn from bank) is shown below :- Cash Deposits chart Cash Withdrawals chart 23.05.13 50000 06.04.13 2500 4 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. 22.06.13 49900 09.05.13 6400 03.07.13 25000 25.03.13 5000 08.07.13 25000 30.05.13 10000 27.07.13 14000 01.06.13 4000 06.08.13 49900 03.06.13 4000 17.08.13 12000 07.06.13 5000 22.08.13 7500 22.06.13 44000 02.09.13 6000 24.06.13 6000 18.09.13 19000 17.08.13 3000 25.11.13 7000 19.08.13 2000 06.12.13 12000 20.08.13 4000 19.12.13 18000 09.09.13 3000 23.01.14 65000 10.09.13 2500 10.02.14 910000 24.09.13 6450 11.02.24 755000 01.10.13 7000 28.02.14 38000 05.10.13 20500 --------- 07.10.13 272000 2063300 12.10.13 10000 14.10.13 10000 16.10.13 57000 18.10.13 4000 01.11.13 2000 04.11.13 6000 11.11.13 8000 18.11.13 3000 19.11.13 2000 19.12.13 15000 20.12.13 2000 26.12.13 4000 30.12.13 2000 17.01.14 2000 24.01.14 52500 27.01.14 8000 29.01.14 2000 01.02.14 2000 19.02.14 4000 28.02.14 1378000 ---------- 1980850 ---------- 5 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. This is quite apparent from the above details, that assessee has deposited a sum of Rs. 20,63,300/- while withdrawn Rs. 19,80,850/-. Opening cash in hand in his books of accounts was Rs. 9,04,558.00. Cash flow appears to be as under :- Opening cash balance as on 01.04.2013 (As per balance sheet dated 31.03.2013) 904558 Add: Total withdrawals from bank during FY 2013-14 1980850 ---------- 2885408 Less: Cash deposited into bank during FY 2013-14 2063300 ---------- Cash balance as on 31.03.14 822108 ---------- CIT (A) did not ever consider the above scenario. Your honors are requested to kindly consider the above facts & provide relief to the assessee. “ 4. On the other hand, the ld. D/R appeared and submitted her written submission and stated that the appeal of the assessee be dismissed. The written submissions of the ld. D/R are as under :- “ A. Key points addressed in this submission: 1. Lack of Evidence Submission : The assessee has not provided adequate evidence to substantiate the claims regarding the source of cash deposits. 2. Source of Income: The assertion that the cash deposits stem from past savings lacks supporting documentation, which is essential for validating the claims made by the assessee. 3. Missing Tax Filings : The failure to file ITRs for the year under consideration raises questions about the assessee’s compliance with tax obligations. 6 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. 4. Cash Deposits and Withdrawals : Specific cash transactions, including a cash withdrawal of Rs. 13,18,000 on 28.02.2014, and no deposits after this date, is against the assessee’s grounds of appeal. B. Request for consideration of ld. CIT (A) Order dated 29.12.2023. Cash Deposits It is humbly submitted that theorder of ld. CIT (A) may be considered in this regard. The relevant part is reproduced as under for your kind reference : (page no. 4 &5): “ I am not able to understand from which & what unknown sources, AO came to the conclusion that I had deposited a sum of Rs. 1,09,28,800. My bank statement is attached herewith for your verification. I deposited only Rs. 20,63,300 & that too out of my earlier withdrawals & savings. Please assess & allow the appeal.” (Copy of bank statement of A/c No. 16701587087 of ICICI Main Branch, Jodhpur was also furnished.) Decision: I have given my careful consideration to the rival submissions, perused the material on record, and duly considered the factual matrix of the case as well as the applicable legal position for arriving at the following decision: All the grounds of appeal are mainly against the above addition. It was stated that the total cash deposit in the appellant’s only bank account no. 16701587087 with Main Branch, ICICI Bank is only Rs. 20,63,300. I have perused the bank statement and found that the total cash deposit in the account is only Rs. 20,63,300. It is seen from the assessment order that the AO has mentioned the same Bank Account No. with the same branch having cash deposits of Rs. 81,10,500, Rs. 20,63,300, and Rs. 7,55,000 respectively. Thus, the AO has considered three different figures of cash deposits in the same bank account, which cannot be true. One cannot have three different bank accounts of 7 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. the same number in the same branch. Thus, the AO has made an addition without verifying the information from the banks. The bank statement gives the figure of cash deposit at Rs. 20,63,300 only. Therefore, this amount of Rs. 20,63,300 will be considered for further deciding the appeal. The appellant has stated tht the source of cash deposit is from earlier withdrawals and savings. From the bank statement, the entries of cash withdrawals over Rs.20,000 are as follows :  07.10.2013 Rs. 2,70,000  16.10.2013 Rs. 40,000  28.02.2014 Rs. 13,78,000 However, there is no cash deposit entry after 28.02.2014, therefore, the same cannot be the source of cash deposits made in earlier dates. The balance withdrawal of Rs. 3,10,000 can be considered as a source of the cash deposits. Further, it will be reasonable to give an allowance of Rs. 2,00,000 for past savings. Thus, the amount of cash deposit of Rs. 5,10,000 is considered as explained, being out of cash withdrawals and past savings. Accordingly, the addition will be restricted to Rs. 15,53,300. The grounds of appeal are Partly Allowed. Submission From the above decision, it is evident that despite the appellant’s assertion that the total cash deposits amounted to Rs. 20,63,300/-, the AO’s findings highlighted discrepancies that the assessee has not declared in the ITR and remained non-complaint throughout the proceedings. C. The following is the submission that may be considered in favour of revenue on account of cash deposits. a. Lack of Filing earlier years’ ITR: The appellant has not filed the ITR, computation, source of income, or details of the opening cash balance for earlier years, which is essential for verifying the claimed sources of income. 8 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. b. Absence of Current Year’s Source of Income : The appellant has failed to provide the source of income for the current year, making it impossible to verify any claims regarding earlier year income. c. Non-Compliance with Statutory Requirements: The appellant has not provided any justification for failing to file the ITR as per the provisions of Section 139(9) and has not responded to the notice under section148. This behavior reflects a disregard for statutory compliance and tax obligations. d. Lack of Deposits Post Withdrawal : Following a cash withdrawal of Rs. 13,18,000 on 28.02.2014, there have been no deposits made after this date, further questioning the legitimacy of the claimed sources. e. Insufficient Evidence for Past Savings : Given that no source of income has been provided by the appellant during the year, the claim for the benefit of past savings holds no merit. Prayer: It is humbly submitted that the appellant’s failure to comply with tax regulations, coupled with the lack of credible evidence to support the claims made, warrants the rejection of the appeal. The integrity of the tax system must be upheld, and the revenue’s position should be maintained to ensure compliance and accountability.” 5. We have heard the ld. D/R and perused the written submissions of both the parties. All the grounds involved relate to same issue, therefore, the same are being disposed off accordingly. The ld. A/R of the assessee has submitted through written submission that during the year under consideration the assessee has deposited Rs. 20,63,300/- in his bank account maintained with ICICI and has withdrawn a sum of Rs. 19,80,850/- from the same bank account. The ld. A/R has 9 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. further submitted that as per books of account of the assessee, the appellant assessee was having cash balance of Rs. 9,04,558/- as on 01.04.2013. The ld. A/R has submitted a summary of cash account for the year under consideration which shows that the assessee was having Rs. 9,04,558/- as opening cash balance and has withdrawn a sum of Rs. 19,80,850/- from the bank account and hence total accumulated amount was Rs. 28,85,408/-, out of which, a sum of Rs. 20,63,300/- was deposited into bank in the financial year 2013-14 thus leaving a cash balance of Rs. 8,22,108/- as asyear end. In support of opening cash balance, the ld. A/R has filed copies of capital account and balance sheet of the assessee for the year ended on 31.03.2011, 31.03.2012, 31.03.2013 and 31.03.2014 and has claimed to have been filed along with the Income-tax return. Thus, from the perusal of these documents, the claim of the appellant assessee seems to be correct as the ld. D/R has not produced any contradictory document. We, therefore, taking into account the above factual aspects of the matter and considering the documents, the claim of the assessee is admitted and the addition of Rs. 15,53,300/- sustained by the ld. CIT (A) is deleted. 6. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 07/01/2025. Sd/- Sd/- ¼xxu xks;y½ ¼MkWa-,l-lhrky{eh½ (Gagan Goyal) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 07/01/2025. Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 10 ITA No. 230/JPR/2024 Kishore Singh Shekhawat, Jodhpur. 1. vihykFkhZ@The Appellant-Kishore Singh Shekhawat, Jodhpur. 2. izR;FkhZ@The Respondent-The ITO, Ward 1(1),Jaipur. 3. vk;dj vk;qDr@CIT 4. vk;dj vk;qDr@CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@Guard File {ITA No. 230/JPR/2024} vkns'kkuqlkj@By order, lgk;d iathdkj@Asst. Registrar "