Rajinder Kumar Garg Vs ITO (ITAT Chandigarh)
Loan Withdrawals Proved – ITAT Deletes Demonetisation Addition; Retention of Cash ≠ Unexplained Income: Tribunal Follows P&H HC
Assessee, proprietor of M/s Raj Kamal Decorators, filed return declaring income of ₹2,34,230. During demonetisation period, cash deposits of ₹35,00,000 were made in his bank account. AO accepted ₹2,00,000 as explained & treated the balance ₹33,00,000 as unexplained money u/s 69A.
CIT(A) examined the cash book, accepted business receipts of ₹8,85,000 & rental income of ₹1,10,000 but sustained ₹30,45,000 on the ground that retention of such a large amount in cash for long was against human conduct & unsupported by evidence.
Before Tribunal, Assessee submitted that he had taken two genuine housing loans from DHFL (₹60,00,000 in 2014 & ₹12,09,123 in 2016), fully verified by AO. Withdrawals were made through proper banking channels. The unutilised portion of ₹30,85,952 was shown in cash book & balance sheet as on 31.03.2016. Cash was retained for further construction but due to delay in plan, it remained idle & was deposited during demonetisation. It was argued that the Department brought no evidence to show that the withdrawn cash was spent or diverted elsewhere. Reliance was placed on Shivcharan Dass v. CIT (126 ITR 263, P&H HC) which held that once withdrawal is proved & Revenue cannot show alternative use, mere lapse of time cannot justify addition. Also, suspicion cannot replace evidence as per Dhakeshwari Cotton Mills (SC).
