Case Law Details

Case Name : Karan Bhalla Vs ITO (ITAT Delhi)
Appeal Number : ITA No.4862/Del/2014
Date of Judgement/Order : 09/06/2017
Related Assessment Year : 2008-09
Courts : All ITAT (6332) ITAT Delhi (1448)

Karan Bhalla Vs ITO (ITAT Delhi)

The assessee has given the details of source of the cash which are reproduced in the order of the Ld. CIT(A).However no supporting documents have been filed. The assessee did not produce any independent evidence in support of cash flow statement. No evidence of any amount is received on occasion of marriage and birthday have been filed. Even during the course of arguments, the assessee was not able to produce any evidence to prove that in fact marriage of the assessee had been performed in February, 2007. Anyhow if the claim of assessee may be considered favourably for receipt of marriage gift and birthday gift, assessee would have spent some expenditure on those celebrations but no evidence in this regard has also been filed. Ld. CIT(A) after examining the bank account noted that withdrawals have been made in small amount very frequently. Therefore it could not be considered as redeposit in the bank account of the assessee. The assessee failed to co-relate the withdrawals from the bank account for the purpose of redeposit in the same account. No evidence in support of cash summary has been filed. Therefore whatever contentions have been raised by the assessee before the authorities below to explain cash deposit in the bank account has not been supported by any evidence. Ld. Counsel for assessee relied upon order of ITAT Delhi bench in the case of DCIT vs. Sunil Bhalla in ITA No. 6689/Del/2013 dated 12th May, 2017 in which departmental appeal in the case of assessee’s father has been dismissed in which the AO in the remand report has accepted substantial availability of cash with that assessee and the AO also agreed to the availability of the funds with the assessee and that the cash withdrawals of Rs. 15 lacs post last date of deposit was considered favourably. However in the case of assessee the AO has objected to the explanation of the assessee in the remand report because assessee has made up story after thought. The assessee failed to explain source of the cash deposit in the bank account. Therefore order in the case of DCIT vs. Sunil Bhalla (supra) will not apply to the fact of the case. Ld. Counsel for assessee also relied upon judgment of the Hon’ble Supreme Court in the case of Gouri Prasad Bagaria vs. CIT (1961) 42 ITR 112 (Supreme Court) in which the Tribunal had believed the assessee words in view of his conduct and past history and the Hon’ble Supreme Court held that the Tribunal having believed the assessee’s statement, there was an end of the matter in so far as the fact was concerned. I may note that the conduct of the assessee in the present case was wholly non cooperative before the AO because the assessee despite statutorily notice issued to him calling for various explanation about source of the cash deposit in the bank account failed to respond to the statutorily notices and did not file any explanation or produce any evidence to explain source of the cash deposit in the bank account of the assessee. The conduct of the assessee therefore speaks against the assessee. The crux of the matter would that assessee did not produce any relevant or cogent evidence before the authorities below to explain the source of cash deposit of Rs. 17,31,500/-. Therefore no interference is called for in the matter. The appeal of the assessee stands dismissed.

FULL TEXT OF THE ITAT JUDGEMENT

This appeal by assessee has been directed against the order of Ld. CIT(A)() XI New Delhi dated 24th June, 2014 for assessment year 2008-09 challenging the addition of Rs. 17,31,500/- on account of cash deposit in the bank account.

2. Briefly the facts of the case are that the assessee filed return of income at Rs. 2,48,000/-. The case was selected for scrutiny. The assessee was asked to explain the source of the cash deposited by him in saving bank account maintained with IndusInd Bank , Gurgaon on 20 occasions totaling to sum of Rs. 17,31,500/-. The assessee was asked to furnish copy of the bank account, statement of affairs / balance sheet for assessment year under appeal as well as of last two years along with house hold withdrawals etc. and fresh investments of property with documentary evidences. The assessee however did not comply with the statutory notices. The AO in the absence of any explanations from the side of the assessee passed ex parte assessment order u/s 144 of the I.T. Act and made the addition of Rs. 17,31,500/- and treated the same as income of assessee from undisclosed sources. The addition was challenged before Ld. CIT(A). The assessee also requested for admission of additional evidences which were admitted. The assessee’s written submission is reproduced in impugned order in which the assessee explained that during the year assessee had withdrawn cash amounting to Rs. 10,16,968/- from the same bank account and have been used to make the deposit. It was also explained that father of the assessee during the March, 2008 sold some valuables for a sum of Rs. 44 lacs out of which Rs. 50,000/- was deposited by assessee in his bank account in March, 2008. The assessee’s marriage took place in the month of February, 2007. A considerable sum of money was received by the assessee from his friends and relatives as gift on the occasion of his marriage. The AO filed the remand report and explained that assessee failed to explain the source of cash deposit in the bank account. The receipt of the gift at the time of marriage and birthday is after thought and cannot be relied upon in the absence of any supporting documents. The assessee was having opening cash in hand, there was no need to withdraw the amount from the bank. The withdrawal from the bank has not been used to make the deposit again.

3. Ld. CIT(A) considering the explanation of the assessee confirmed the addition and dismissed this ground of appeal of assessee. His findings in para 8.2 of the appellate order is reproduced as under :-

“8.2 On considering the facts of the case and written submissions made by the appellant, regarding the source of cash deposit of Rs. 17,31,500/- in IndusInd Bank, the appellant has tried to explain the source of such cash in the following way :

Cash Summary

DURING 2007-08 F.Y. (SUMMARISED)

S. No. MONTH AMOUNT
1.  August-07 315000
2.  September-07 15650
3.  October-07 47818
4.  November-07 482500
5.  December-07 25000
6.  January-08 74000
7.  February-08 25000
TOTAL 984968 ”

It is observed that the explanation offered by the appellant are vague and self-serving. No independent evidences in the form of Wealth tax return or Cash flow chart filed with ITR could be produced by the appellant. Just to show opening cash balance of Rs. 11 lac as on 01.04.2007, the appellant has shown massive gifts of more than Rs. 11 lac in marriage and birthday of the appellant. No evidences in whatsoever are produced in support of marriage gifts and birthday gifts allegedly received by the appellant. Moreover, if at all some customary gifts are received by the appellant at the time of marriage or birthday, the expenditure incurred in such celebrations is much more than the gifts received and the appellant is silent on this point. It is apparent that the appellant has concocted the story just to explain the source of cash deposited by him in the bank account. Therefore, the benefit of opening cash balance of Rs. 11 lac cannot be given to the appellant. Regarding the cash deposits out of cash withdrawals made by the appellant from the same account, I have examined the entries of bank account in detail. The withdrawals have been made in small amounts very frequently during the month, though the monthly summary of’ withdrawals show a bigger figure. I fully agree with the AO’s remand report on the point that there should not have been any urgency in making further withdrawals from the bank account if the appellant was having sufficient cash balance with him. In fact it is clear from the bank account that withdrawal is fully utilized before making the next withdrawal. Therefore, the appellant’s attempt to take benefit of cash withdrawal of Rs. 9,84,986/- for explaining the source of cash deposit is outrightly rejected. Thus, the entire amount of cash deposit of Rs. 17,31,500/-remains unexplained. Therefore, the AO’s action in making addition o f Rs.17,31,500/- in appellant’s income treating the same as income from undisclosed sources is upheld. Ground No. 5 of the appeal is dismissed. ”

4. After considering rival submissions, I do not find any merit in this ground of appeal of assessee. The assessee has given the details of source of the cash which are reproduced in the order of the Ld. CIT(A).However no supporting documents have been filed. The assessee did not produce any independent evidence in support of cash flow statement. No evidence of any amount is received on occasion of marriage and birthday have been filed. Even during the course of arguments, the assessee was not able to produce any evidence to prove that in fact marriage of the assessee had been performed in February, 2007. Anyhow if the claim of assessee may be considered favourably for receipt of marriage gift and birthday gift, assessee would have spent some expenditure on those celebrations but no evidence in this regard has also been filed. Ld. CIT(A) after examining the bank account noted that withdrawals have been made in small amount very frequently. Therefore it could not be considered as redeposit in the bank account of the assessee. The assessee failed to co-relate the withdrawals from the bank account for the purpose of redeposit in the same account. No evidence in support of cash summary has been filed. Therefore whatever contentions have been raised by the assessee before the authorities below to explain cash deposit in the bank account has not been supported by any evidence. Ld. Counsel for assessee relied upon order of ITAT Delhi bench in the case of DCIT vs. Sunil Bhalla in ITA No. 6689/Del/2013 dated 12th May, 2017 in which departmental appeal in the case of assessee’s father has been dismissed in which the AO in the remand report has accepted substantial availability of cash with that assessee and the AO also agreed to the availability of the funds with the assessee and that the cash withdrawals of Rs. 15 lacs post last date of deposit was considered favourably. However in the case of assessee the AO has objected to the explanation of the assessee in the remand report because assessee has made up story after thought. The assessee failed to explain source of the cash deposit in the bank account. Therefore order in the case of DCIT vs. Sunil Bhalla (supra) will not apply to the fact of the case. Ld. Counsel for assessee also relied upon judgment of the Hon’ble Supreme Court in the case of Gouri Prasad Bagaria vs. CIT (1961) 42 ITR 112 (Supreme Court) in which the Tribunal had believed the assessee words in view of his conduct and past history and the Hon’ble Supreme Court held that the Tribunal having believed the assessee’s statement, there was an end of the matter in so far as the fact was concerned. I may note that the conduct of the assessee in the present case was wholly non cooperative before the AO because the assessee despite statutorily notice issued to him calling for various explanation about source of the cash deposit in the bank account failed to respond to the statutorily notices and did not file any explanation or produce any evidence to explain source of the cash deposit in the bank account of the assessee. The conduct of the assessee therefore speaks against the assessee. The crux of the matter would that assessee did not produce any relevant or cogent evidence before the authorities below to explain the source of cash deposit of Rs. 17,31,500/-. Therefore no interference is called for in the matter. The appeal of the assessee stands dismissed.

5. In the result appeal of the assessee is dismissed.

Pronounced in the Open Court.

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