Ajit Rameshchandra Pathak Vs DCIT (ITAT Surat)
No Presumptions, Only Evidence: Books Not Rejected, Withdrawals Accepted — Suspicion Cannot Replace Proof- ITAT Surat Quashes Unexplained Money Addition-
Assessee, an individual earning interest & dividend income, was selected for limited scrutiny due to large cash deposits during demonetisation. Total deposits of ₹59,39,500 were noticed-₹43,00,000 in the bank account of Assessee’s late mother, Smt. Shantaben Pathak, & ₹16,39,500 in his own account. AO presumed that earlier cash withdrawals made by mother & Assessee were spent for renovation or other purposes, without rejecting books or producing contrary evidence, & treated the entire amount as unexplained money taxable u/s 69A.
Before CIT(A), Assessee demonstrated that his late mother had withdrawn ₹45,00,000 between April–October 2016, duly recorded in her cash book & corroborated by bank entries. The deposits were made after her death, & Assessee operated the account only as legal heir. Similarly, deposits in Assessee’s own account were backed by earlier withdrawals reflected in his books. Both sets of cash books were accepted by Department. CIT(A), however, mechanically affirmed AO’s view without independently examining evidence.
Before Tribunal, Assessee reiterated that Department never disproved the withdrawals, never rejected books, & relied merely on assumptions. Tribunal observed that when cash withdrawals are accepted, books are maintained regularly, & Department brings no material to show diversion of funds, availability of cash cannot be denied. The addition was based purely on suspicion. Tribunal relied on several decisions including Murlidhar Ice-Cream & Sweet Parlour, Vishan Lal, B. Jenson Thanaraj, C. Vamsi Mohan, Deepali Sehgal, Rajeev Kumar Gupta, Smt. Satya Bhama Bindal & others, which consistently hold that unless AO proves the cash was used elsewhere, deposits out of earlier withdrawals cannot be treated as unexplained u/s 69A.
