SHRI GYAN CHAND TATIYA,RAIPUR V. INCOME TAX OFFICER, WARD-2(1), RAIPUR. (C.G.), RAIPUR

ITA 296/RPR/2024

AI Insights

The case involves Shri Gyan Chand Tatiya, who appealed against the order of the Commissioner of Income-Tax (Appeals), which confirmed the addition of Rs. 33,00,000 as unexplained cash credit during the demonetization period in 2016. The Income Tax Officer (ITO) had initially treated this amount as unexplained under section 68 of the Income Tax Act, 1961, after scrutiny of the assessee's explanations and documents. The Tribunal examined the explanations provided by the assessee, including cash withdrawals and capital introductions in his proprietary concern, M/s. CP Coal Company, and found partial merit in the explanations, leading to a reduction in the unexplained amount.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469765 (ITAT-RAIPUR)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-08-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 14-06-2024
• Other Referred Cases: Sumati Dayal vs. CIT, CIT v. Durga Prasad More, Rupaljain vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: SAKSHI GOPAL AGGARWAL
• Keywords: Business expenditure; Unexplained cash credit; Search and seizure; Reason to believe
• Section: 143(3); 143(2); 68; 131; 22; 144C; 101

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 296/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 Shri Gyan Chand Tatiya, 14/650/7, Ahead Chotu Kiriya Bhandar, Mohaba Bazar, Tatiband, Raipur (C.G.)-492 001 PAN: ADEPT6391E .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-2(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Sakshi Gopal Aggarwal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 21.08.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 01.10.2024 2 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 30.04.2024, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income- tax Act, 1961 (in short ‘the Act’) dated 27.12.2019 for the assessment year 2017-18. The assessee has assailed the impugned order on the following grounds of appeal: “1. On the fact and circumstances of the case, the Id. A.O. Ward 2(1), Raipur has erred for treating cash deposit of Rs.33,00,000/- during demonetization period as unexplained cash credit u/s.68 despite of fact that during the course of assessment proceeding u/s.143(3) appellant had produced the books of accounts and had explained the source of cash deposit as well as cash available in cash book and the Ld. AO has never rejected books of accounts u/s.145 nor pointed out any defect in the same nor find out utilization of available cash for any other investment. And CIT(A), NFAC has erred for confirming the order of Id. Assessing officer. 2. On the fact and circumstances of the case, the A.O. Ward 2(1), Raipur has erred for treating cash deposit of Rs.33,00,000/- as unexplained cash credit merely by disbelieving on statement of appellant recorded u/s.131 during the course of assessment proceeding without verifying the same with books of accounts and other documents submitted by appellant which is bad in law. 3. On the fact and circumstances of the case, the A.O. Ward-2(1), Raipur has erred for treating cash deposit of Rs.33,00,000/-as unexplained cash credit u/s.68 as he failed to brought into records the specific entry which he consider to be unexplained despite of fact that appellant had sufficiently explained the credit entries with all documentary evidences. 3 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 4. That on the fact and circumstances of the case, the honorable CIT(A) has erred for confirming the order of learned assessing officer without properly appreciating the fact of the case. 5. That, assessee reserves the right to add, amend, alter or withdraw any ground/grounds of appeal at the time of hearing.” 2. Succinctly stated, the assessee had filed his return of income for A.Y.2017-18 on 17.10.2018, declaring an income of Rs.7,35,960/-. Thereafter, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 3. During the course of assessment proceedings, the A.O observed that the assessee had on two occasions during the demonetization period made cash deposits in Specified Bank Notes (SBNs), viz. (i) on 10.11.2016 Rs.13,01,000/-; and (ii) on 22.11.2016: Rs.33,00,000/-. Although the A.O was of the view that the cash deposit of Rs.13,01,000/- (supra) made by the assessee in his bank account on the 1st day of banking after the demonetization was sourced out of the funds that were genuinely available with him on the date of deposit, but called upon him to put forth an explanation as regards the source of the cash deposits of Rs.33 lac made on 22.11.2016. As the reply filed by the assessee did not find favour with the A.O, therefore, he issued summons u/s.131 of the Act on 21.11.2019 and recorded his statement on 16.12.2019. The assessee on being queried about the source of cash deposit, submitted vide his reply to Question No.19 that the same was sourced out of the cash in hand available with 4 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 him at the relevant point of time, i.e. during the demonetization period. The assessee’s reply regarding the source of cash deposits in SBNs during the demonetization period was culled out by the A.O by way of a “chart” in the body of the assessment order, as under: Sl. No. Particulars Amount (Rs.) 1. Opening balance as on 01.04.2016 in C.P.Coal Company Rs.510572.58 2. Cash withdrawn in 16.05.2016 from Bank account in Allahabad Bank Rs.11,00,000.00 3. Cash withdrawn in 16.06.2016 from Bank account in Axis Bank Rs.9,00,000.00 4. Cash withdrawn in 28.07.2016 from Bank account in Allahabad Bank Rs,1,00,000.00 5. Cash withdrawn in 24.08.2016 from Bank account in Axis Bank Rs.5,00,000.00 6. Cash withdrawn in 21.09.2016 from Bank account in Allahabad Bank Rs.3,00,000.00 7. Capital introduction by Mr. Gyanchand Tatiya from personal account on 13.10.2016 Rs.4,50,000.00 8 Capital introduction by Mr. Gyanchand Tatiya from personal account on 21.10.2016 Rs.5,00,000.00 9. Capital introduction by Mr. Gyanchand Tatiya from personal account on 31.10.2016 Rs.6,00,000.00 10. Capital introduction by Mr. Gyanchand Tatiya from personal account on 05.11.2016 Rs.2,00,000.00 11. Capital introduction by Mr. Gyanchand Tatiya from personal account on 02.11.2016 Rs.4,20,000.00 Total Rs.54,80,572.58 5 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 The A.O after considering the assessee’s reply called upon him to explain the purpose, for which, cash was withdrawn by him from his bank account and was kept idle for a substantial period prior to depositing the same in his bank account during the demonetization period. In reply, it was the claim of the assessee that as he had no faith in the banking system, therefore, he had instead of depositing the accumulated amount of cash in his bank account retained the same. The A.O was not persuaded to subscribe to the aforesaid claim of the assessee. The A.O was of the view that the explanation of the assessee defied all logic and militated against the principle of preponderance of human probabilities. The A.O was of the view that the assessee who was a mechanical engineer could not be expected to have remained unfamiliar with the banking system and would have taken the risk to keep substantial amount of cash with him knowing well that the same would be vulnerable to the risk of theft, fire etc. Further, the A.O was of the view that no prudent person would choose to keep his cash idle instead of depositing the same in various investment avenues or government securities and earn income therefrom. 4. The A.O queried the assessee about the source of the cash expenses that were incurred by him during the subject year. In reply, the assessee stated that the said expenses were sourced out of the withdrawals made from his bank account. The A.O observed that on the one hand the assessee claimed to be in possession of substantial amount as cash in 6 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 hand, but on the other hand, had stated that the cash expenditure incurred by him was sourced out of cash withdrawals made from his bank account. Accordingly, the A.O held a firm conviction that the claim of the assessee of being in possession of substantial amount of cash in hand as on 08.11.2016 which, thereafter, was utilized for making cash deposits in his bank account was found to be incorrect. The assessee on being confronted with his incomprehensible explanation, that he despite being in possession of substantial amount of cash in hand had sourced the expenses by making withdrawals from his bank accounts, submitted that he had chosen to do so for the purpose of gaining credibility. As the explanation of the assessee was found to be devoid and bereft of any logic and prudence, the A.O rejected the same. The A.O based on his aforesaid observations, held the entire amount of cash deposits in SBNs of Rs.33 lacs (supra) made in the assessee’s bank account during the demonetization period as unexplained cash credit u/s. 68 r.w.s. 115BBE of the Act. Accordingly, the A.O vide his order passed u/s.143(3) dated 27.12.2019 determined the income of the assessee at Rs.40,35,960/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “Decision: 7 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 5. I have considered the grounds of appeal as well as the contentions of the appellant and also perused the material available on record. Ground of appeal No.4 is general in nature and does not call for any adjudication. The remaining grounds are adjudicated as under: Grounds of appeal No.1 and 2: 6. There is only one issue involved in these grounds is against the addition of Rs.33,00,000 as unexplained cash credit u/s 68 of the Income Tax Act. 6.1 In this case, the AO issued summon u/s. 131 on 21.11.2019 requiring the personal attendance of the appellant for recording his sworn deposition. The appellant in his statement, explained the source of cash deposit as the cash withdrawal and capital introduced by the assessee from his personal account. The source of cash deposit explained by the appellant in response to Question no. 19 was duly recorded at page no. 2-3 of the assessment order as follows: Sl. No. Particulars Amount (Rs.) 1. Opening balance as on 01.04.2016 in C.P.Coal Company AX DEPA Rs.510572.58 2. Cash withdrawn in 16.05.2016 from Bank account in Allahabad Bank Rs.11,00,000.00 3. Cash withdrawn in 16.06.2016 from Bank account in Axis Bank Rs.9,00,000.00 4. Cash withdrawn in 28.07.2016 from Bank account in Allahabad Bank Rs,1,00,000.00 5. Cash withdrawn in 24.08.2016 from Bank account in Axis Bank Rs.5,00,000.00 6. Cash withdrawn in 21.09.2016 from Bank account in Allahabad Bank Rs.3,00,000.00 7. Capital introduction by Mr. Gyanchand Tatiya from personal account on 13.10.2016 Rs.4,50,000.00 8 Capital introduction by Mr. Gyanchand Tatiya from personal account on 21.10.2016 Rs.5,00,000.00 8 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 9. Capital introduction by Mr. Gyanchand Tatiya from personal account on 31.10.2016 Rs.6,00,000.00 10. Capital introduction by Mr. Gyanchand Tatiya from personal account on 05.11.2016 Rs.2,00,000.00 11. Capital introduction by Mr. Gyanchand Tatiya from personal account on 02.11.2016 Rs.4,20,000.00 Total Rs.54,80,572.58 6.2 As can be seen from the above, the appellant explained the source for a part of cash deposits as the cash withdrawn from banks between 16/05/2016 and 21/09/2016, which was claimed to have been deposited during the demonetization period. During assessment proceedings, the appellant was specifically asked to explain the purpose of withdrawal of cash and the reason for keeping cash idle for such a long period of time, for which the appellant stated that \"he does not have faith in the banking system and he has insecurity to keep cash in the bank account'. Further, rest of the cash deposit to the tune of Rs. 21,70,000 was explained as capital introduction from the personal account of Mr. Gyanchand Thatiya. This shows that the appellant has claimed to have kept Rs. 21.70 lakhs belonging to his personal account (proprietorship account) in cash with him which was deposited during the demonetization period. In response to Question No. 22 of the sworn statement under section 131 of the Act, the appellant stated that he did not intend to derive benefit from investment in share market or from any other persons or from any other financial institution by investing his money that's why whatever cash is available from time to time has been kept with himself. These explanations were not considered by the AO. In the absence of satisfactory explanation regarding the cash deposits of Rs.33,00,000 during demonetization period, the AO treated said cash deposit as 'unexplained cash credit' u/s. 68 of the Act. The assessment was thus completed u/s. 143(3) by adding Rs.33,00,000/- u/s. 68 r.w.s. 115BBE. 6.3 It is noticed from the assessment order that the AO has not added the entire amount of cash deposited during the demonetization period but added only Rs.33,00,000 as unexplained cash credit u/s.68 of the Income Tax Act for not furnishing satisfactory explanation. 6.4 Before me, the appellant submitted that the amount deposited was out of cash-in-hand. However, there is no presumption that the cash-in-hand or cash withdrawn from banks was used for cash 9 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 deposits in question. As opined by Hon'ble Supreme Court in Sumati Dayal vs. CIT [1995] 80 Taxman 89 (SC) such matters have to be considered in the light of human probabilities. 6.5 It is \"apparent\" that the appellant MIGHT HAVE used the cash- in-hand or the cash previously withdrawn from bank accounts to deposit in the bank. BUT IS IT \"REAL\" ? The appellant is insisting to consider the 'apparent' i.e., depositing the cash-in-hand or cash withdrawal from banks, as 'real' and to allow the matter in its favour. This raises the question whether the 'apparent' can be considered as 'real'. The AO has rightly relied upon the decision of Hon'ble Supreme Court in Sumati Dayal vs. CIT (supra), where Hon'ble Supreme Court held as under -As laid down by this Court, apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities - CIT v. Durga Prasad More [1971] 82 ITR 540, at pp. 545, 547 (SC).\" 6.6 The appellant made a vague statement that cash-in-hand and cash previously withdrawn were used to make cash deposits in the banks, without giving any corroborative evidence. 6.7 In the present case, applying the test of human probabilities, one can safely conclude that no prudent businessman will withdraw cash, when large cash is already on hand. Further, appellant being a mechanical engineer, if he submits that he has no belief in bank, it appears rather strange and is unacceptable. Further, as held by the Apex Court in Sumati Dayal (supra), the AO is entitled to look into the surrounding circumstances to find out the reality by applying the test of human probabilities. Based on such analysis, the AO had a reason to believe that it is highly improbable that the cash-in-hand must have been deposited, especially in a scenario when the appellant was withdrawing cash in spite of having large sum of cash in hand. The appellant's explanation that cash was withdrawn despite sufficient cash-in-hand and the subsequent acceptance of cash has NOT been found satisfactory. 6.8 In Rupaljain vs. CIT [2023] 152 taxmann.com 346 (SC), Hon'ble Supreme Court dismissed the SLP of Hon'ble Allahabad High Court, there by holding that such cash deposit was rightly treated as unexplained credit u/s. 68 of the Act. 6.9 The AO has disallowed only the cash deposit of Rs.33,00,000 for want of reliable explanation as to why cash was continuously withdrawn, when enough/sufficient cash was already in hand. In the light of the AO's observations, judicial precedents and the 10 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 principles laid down by Hon'ble Supreme Court, which allow tax authorities to examine the reality of transactions, I am of the considered opinion that the appellant failed to provide sufficient evidence to justify the source of the cash deposits in question. Therefore, the addition of Rs.33,00,000 as unexplained cash credit under section 68 of the Income Tax Act stands justified. Accordingly, these grounds are dismissed. Ground of appeal No. 3: 7.0 Vide this ground, the appellant contented that the AO has erred in recording the statement u/s. 131, which is bad in law as well as un-warranted. 7.1 As mentioned in earlier paragraphs of the order, during the assessment proceedings, the appellant was asked to explain the sources of cash deposit of Rs.33,00.000 during demonetization period in SBN. The appellant submitted response online, however, the same was not found satisfactory by the AO. Accordingly, summon u/s. 131 was issued on 21.11.2019 requiring the personal attendance of the appellant for recording the statement. In response to the summon, the appellant appeared on 16.12.2019 and his statement was recorded u/s. 131 of the I.T. Act, 1961. 7.2 On perusal of the assessment order, it is noticed that the assessee appeared in response of summon u/s. 131 of the I.T. Act, 1961 without raising any objection before Assessing Officer and his statement was also recorded. Having participated in the tax proceedings, the appellant cannot raise such objections before the appellate authorities. 7.3 Further, Section 131(1) reads as follows: \"Power regarding enforcing the attendance of any person, etc. 131. (1) The Assessing Officer, Deputy Commissioner (Appeals), Joint Commissioner, Commissioner (Appeals), Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner and the Dispute Resolution Panel referred to in clause (a) of sub-section (15) of section 144C shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; 11 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 (c) compelling the production of books of account and other documents; and (d) issuing commissions.\" 7.4 Thus, section 131(1) confers on the Income Tax Authorities mentioned therein, the same powers as those vested in a court under the CPC, when trying a suit. Section 131(1) of the I.T. Act, by conferment of the powers as envisaged therein, equates the powers of the Income Tax Authorities with those of a Court. Therefore, it follows that it is only during the pendency of some proceeding before it, that an Income Tax Authority can exercise the power vested on them under section 131(1), and not otherwise. 7.5 In the case at hand, scrutiny proceedings u/s.143(3) was pending before the AO. Therefore, the action of the AO of issuing summons u/s.131 of the IT Act, enforcing the attendance of the assessee and recording his statement, cannot be faulted with. In the light of the factual and legal matrix brought out as above, I am of the considered opinion that the re-recording of statement u/s.131 is not bad in law. Therefore, I dismiss this ground raised by the appellant. 8. In the result, the assessment order is upheld, and the appeal is dismissed.” 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record. 7. Admittedly, it is a matter of fact borne from record that the assessee during the year under consideration, i.e. A.Y.2017-18, had on two occasions during the demonetization period made cash deposits in SBNs in his bank account aggregating to Rs.46,01,000/-, viz. (i) cash deposit in SB A/c. with State Bank of India, GCET Branch, Raipur on 10.11.2016: Rs.13,01,000/-; and (ii) cash deposit in CC A/c. 20246189407 with Allahabad Bank, Branch : Amrit Sandesh on 22.11.2016: Rs.33 lacs. 12 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 Although, the A.O was of the view that cash deposit of Rs.13,01,000/- (supra) made by the assessee in his bank account on 10.11.2016, i.e. on the first day of banking after the demonetization scheme had come into force, was sourced out of the funds that were genuinely available with him on the said date, but he called upon the assessee to put forth an explanation regarding the cash deposit of Rs.33 lac (supra) made in his CC A/c. No.20246189707 with Allahabad Bank on 22.11.2016. As the explanation of the assessee that the cash deposit of Rs.33 lac (supra) was sourced from the books of account of his sole-proprietary concern, viz. M/s. CP Coal Company, which in turn was primarily sourced from, viz. (i) opening cash in hand as on 01.04.2016 : Rs.5.10 lac (approx.); (ii) cash withdrawals from books of accounts of the proprietary concern, i.e. over the period 16.05.2026 to 21.09.2016; Rs.29 lac and (iii) capital introduced by the assessee on cash in his proprietary concern, i.e over the period 13.10.2016 to 02.11.2016 : Rs.21.70 lac, did not find favour with the A.O, therefore, he held the entire amount of Rs.33 lac (supra) as the assessee’s unexplained cash credit u/s.68 of the Act. 8. Controversy involved in the present appeal lies in a narrow compass, i.e. sustainability of the view taken by the A.O that the cash deposit of Rs.33 lac (supra) made by the assessee in his bank account on 22.11.2016 is an unexplained cash credit u/s. 68 of the Act. 13 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 9. Shri Sakshi Gopal Agrawal, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that the A.O had grossly erred in law and facts of the case in treating the cash deposit of Rs.33 lac (supra) that was sourced from the duly audited books of account of the proprietary concern of the assessee, viz. M/s. CP Coal Company as an unexplained cash credit u/s. 68 of the Act. Elaborating on his contention, the Ld. AR had taken me through the copy of the “cash book” of the aforementioned proprietary concern, viz. M/s. CP Coal Company for the year under consideration, Page 79-93 of APB. The Ld. AR had specifically drawn my attention to the transactions in the “cash book” on 22.11.2016, which revealed that cash deposit of Rs.33 lac was made by the assessee in his bank account, viz. CC A/c. No.20246189407 with Allahabad Bank. The Ld. AR submitted that as the subject cash deposit of Rs.33 lac was made by the assessee from the regular books of account of his proprietary concern, viz. M/s. CP Coal Company, therefore, there was no justification for the A.O to have held the same as an unexplained cash credit u/s. 68 of the Act. The Ld. AR on being queried about the details of the source of cash deposit in SBNs as was mentioned by the A.O at Page 2 of his order, submitted that the said bifurcated details were provided by the assessee for the limited purpose of substantiating his claim as regards the availability of cash in hand before start of the demonetization period. Carrying his contention further, the Ld. AR submitted that a perusal of the 14 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 “chart” culled out by the A.O at Page 2-3 of the assessment order, revealed that the cash deposits in SBNs made by the assessee during the demonetization period were sourced out of, viz. (i) opening cash in hand on 01.04.2016: Rs.5.10 lacs (approx.); (ii) cash withdrawn from the bank accounts during the period 16.05.2016 to 21.09.2016 :Rs.29 lacs (aggregate); and (iii) cash introduced by the assessee by way of his capital from the cash in hand available in his personal account : Rs.21.70 lacs (aggregate). It was submitted by the Ld. AR that as the subject cash deposit in SBNs of Rs.33 lacs made by the assessee in his bank account during the demonetization period, i.e. on 22.11.2016 was sourced out of the duly audited books of accounts of the proprietary concern, viz. M/s. CP Coal Company, therefore, there was no justification for the A.O to have held the same as unexplained cash credit u/s. 68 of the Act. 10. Per contra, the Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the explanation of the assessee as regards retaining of a substantial amount of cash in hand with him instead of depositing/investing the same defied all logic and was found beyond human probabilities, therefore, the A.O had rightly rejected the same and held it as an unexplained cash credit u/s. 68 of the Act. 15 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 11. I have thoughtfully considered the contentions advanced by the Ld. authorized representatives of both the parties in the backdrop of the orders of the lower authorities and the material available on record before me. 12. As observed by me hereinabove, the assessee on being queried about the source of cash deposit of Rs.33 lac (supra) made in CC A/c. No.20246189707 with Allahabad Bank on 22.11.2016, had stated that the same was sourced out of the books of account of his sole proprietary concern, viz. M/s. CP Coal Company. Ostensibly, the cash deposit of Rs.33 lac (supra) as had been culled out by the A.O in the body of the assessment order based on the assessee’s statement recorded u/s. 131 of the Act, dated 16.12.2019 is primarily sourced from, viz. (A) opening cash- in-hand on 01.04.2016: Rs.5.10 lacs (approx.); (B) cash withdrawn from bank account, viz. (i) CC A/C. No20246189707 with Allahabad Bank, Branch: Amrit Sandesh Complex, Raipur; AND (ii) OD A/c. No.915030057859194 with Axis Bank Ltd. Branch: Pandri: Rs.29 lacs; and (C) cash introduced by the assessee as capital contribution (out of his personal funds) in his proprietary concern : Rs.21.70 lacs. 13. In so far the opening cash in hand on 01.04.2016 of Rs.5.10 lacs (supra) is concerned, I find that the availability of the same with the assessee on 31.03.2016 can safely be gathered from the “balance sheet” of his sole proprietary concern i.e. M/s. CP Coal Company as on 31.03.2016, 16 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 i.e. for A.Y.2016-17, Page 78 of APB. Also, the cash withdrawals made by the assessee from his bank account during the year under consideration, i.e. over the period 16.05.2016 to 21.09.2016 of Rs.29 lacs (aggregate) is proved on a perusal of the bank accounts of his proprietary concern, viz. (i) CC A/c. No.20246189707 with Allahabad Bank, Branch : Amrit Sandesh Complex, Raipur ( Rs.15 lacs), Page No.101 to 104 of APB; and (ii) OD A/c. No.915030057859194 with Axis Bank Ltd., Branch : Pandri ( Rs.14 lacs), Page 99 to 101 of APB. 14. At the same time, the assessee’s claim of having introduced cash in form of capital with his proprietary concern, viz. M/s. CP Coal Company in five tranches over the period 13.10.2016 to 02.11.2016 amounting to Rs.21.70 lacs is found to be fully unsubstantiated. Although the assessee in his statement recorded u/s. 131 of the Act dated 16.12.2019, had claimed to have introduced cash amounting to Rs.21.70 lacs (supra) by way of capital addition (out of personal funds available with him) in his proprietary concern, but I am afraid that the same in absence of any material which would irrefutably evidence availability of the aforesaid substantial amount of cash with him to source the capital introduction on the respective dates, cannot be summarily accepted. Although the assessee had placed on record a copy of his “balance sheet” (personal) as on 31.03.2016 which, inter alia, reveals the availability with him of cash in hand of Rs.48.71 lacs (approx.) as on 31.03.2016, but the said claim is in 17 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 the thin air and neither forms part of his return of income for the immediately preceding year, i.e. A.Y.2016-17 nor is supported by any independent material. In fact, the AO’s conviction that now when the assessee during the pre-demonetization period was already having substantial amount of cash available with him, i.e. sourced out of opening CIH : Rs.5.10 lac (supra) and cash withdrawn from bank accounts of the proprietary concern : Rs.29 lacs, therefore, it was beyond comprehension and against the principle of preponderance of human probabilities that he would be in possession of substantial amount of cash-in-hand (in his personal account) carries substance. If the assessee during the pre- demonetization period was in possession of substantial amount of cash in hand (personal account), then neither there would have been any need for him to have made heavy cash withdrawals from the bank accounts of his proprietary concern nor made cash withdrawals from his bank accounts for incurring business expenses. Accordingly, the assessee’s claim of having introduced cash in form of capital in his proprietary concern , viz. M/s. CP Coal Company aggregating to Rs.21.70 lacs (supra) in absence of any supporting material, and being beyond human probabilities cannot be accepted. 15. Based on my aforesaid observations, the cash in hand available with the assessee in the “books of account” of his proprietary concern, viz. M/s. CP Coal Company, i.e. on the date on which he had made a cash deposit of 18 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 Rs.33 lacs in his CC A/c. No.20246189707 with Allahabad Bank, Branch: Amrit Sandesh Complex, Raipur would stand reduced by an amount of Rs.21.70 lacs, i.e. the capital (in cash) allegedly claimed to have been introduced by him during the period 13.10.2016 to 02.11.2016 out of cash in hand (from personal account). As the “cash book” of the assessee reveals availability of the CIH as on 22.11.2016 of Rs.33,14,870.58, therefore, after reducing the same by an amount of Rs.21.70 lacs (supra) the balance remains at Rs.11,44,870.58. Accordingly, I am of the view that the cash in hand available with the assessee to source the cash deposit of Rs.33 lacs on 22.11.2016 is explained only to the extent of Rs.11,44,870.58. I, thus, in terms of my aforesaid observations restrict the addition in the hands of the assessee to Rs.21,55,130/- (out of Rs.33 lacs made by the A.O). 16. In the result, appeal of the assessee is partly allowed in terms of the aforesaid observations. Order pronounced in open court on 01st day of October, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 01st October, 2024. ***SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 19 Shri Gyan Chand Tatiya Vs. ITO, Ward-2(1), Raipur ITA No. 296/RPR/2024 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "