Anil Kumar Agarwal Vs DCIT (ITAT Agra)
Cash Deposits Fully Explained Through Cash Book & Bank Withdrawals—CIT(A)’s Partial Confirmation Reversed; Entire ₹11 Lakh Addition Deleted
The Assessee filed return declaring ₹2,29,550. Based on AIR information showing ₹13 lakh cash deposit in HDFC Bank, AO reopened the assessment u/s 147 and treated the entire ₹13 lakh as unexplained income u/s 68, stating that the Assessee’s replies were vague.
CIT(A) examined the sources and accepted only ₹2 lakh as explained (cash received on sale of property to Smt. Gashkin Begum), rejecting explanations regarding commodity-trading receipts from Adroid Securities and treating cheque withdrawals of ₹6 lakh as non-cash withdrawals. CIT(A) therefore confirmed ₹11 lakh as unexplained.
Before Tribunal, the Assessee produced:
- HDFC Bank certificate proving the ₹6 lakh withdrawal (21-02-2011) was a self cheque and therefore a cash withdrawal,
- Cash Book for FY 2010-11 showing all daily cash movements, speculative income receipts, drawings & cash deposits,
- Ledger & supportive entries demonstrating cash availability throughout the year.
Tribunal noted that:
- The Cash Book showed no negative cash balance on any day,
- All cash deposits aggregating ₹13 lakh were fully covered by recorded cash availability,
- Cash withdrawals remain a valid source unless Revenue proves diversion for other purposes—which Revenue failed to show,
- Books (including Cash Book) were never rejected,
- Cash receipts from speculative transactions were already offered to tax as speculative income.
Relying on S.R. Venkata Ratnam vs CIT (127 ITR 807, Kar.), Tribunal held that earlier-year or earlier-date cash withdrawals must be presumed to be available unless shown otherwise.
Accordingly, Tribunal held that the entire ₹13 lakh was satisfactorily explained, and the CIT(A) erred in restricting relief to ₹2 lakh.
Result
