ITAT confirms addition of unexplained cash deposited in bank account

Shaheen Khan Vs ITO (ITAT Allahabad)

Facts- The main sources of income of the assessee were from interest on FDRs, interest on saving bank account and interest income of his minor son and daughter. ROI of the assessee was processed by Revenue u/s 143(1) of the Act, and later on the case of the assessee was selected for framing scrutiny assessment u/s. 143(3) read with Section 143(2) of the 1961 Act , through CASS on the basis of AIR information as cash was deposited in saving bank accounts of the assessee above the prescribed threshold limits.

The assessee was asked to explain sources of the cash deposits in his bank account. AO observed that the cash deposits in the bank accounts of the assessee to the tune of Rs. 21,82,000/- could not be verified and hence the same were added to the income of the assessee by the AO as unexplained and unproved.

Assessee argued that the cash deposited is advance against sale of flat to M/s. Avtar Chemist.

Conclusion- It is held that the appellant has not entered into any agreement for sale of flat with M/s. Avtar Chemist and this story was cooked up only to explain the source of deposits in bank account of the appellant. Accordingly, the addition of Rs. 21,82,000 is confirmed.

FULL TEXT OF THE ORDER OF ITAT ALLAHABAD

This appeal, filed by assessee, being ITA No.544/Alld./2014, is directed against an appellate order dated 31.07.2014in Appeal No.31/ITO/R-3(1)/MZP/11-12 passed by learned Commissioner of Income Tax (Appeals), Allahabad (hereinafter called “theCIT(A)”),for assessment year(ay):2009-10, the appellate proceedingshad arisen before learned CIT(A)from assessment order dated 19th December, 2011 passed by learned Assessing Officer (hereinafter called “the AO”) under Section 143(3) of the Income-tax Act,1961(hereinafter called “ the Act”) .We have heard both the parties through Video Conferencing mode through Virtual Court.

2. The grounds of appeal raised by assessee in ITA No. 544/Alld./2014for ay: 2009-10in memo of appeal filed with Income-Tax Appellate Tribunal, Allahabad Bench , Allahabad(hereinafter called “ the tribunal”) , reads as under:-

“1. Because Ld. CIT(A) was not justified in confirming the addition of Rs. 21,82,000.00 as unexplained cash credit on irrelevant considerations and surmises.

2. Because the claim of the appellant before the authorities below was that he had received Rs. 2400000.00 as advance for sale of flat from M/s Avtar Chemist, 12, Rani Mandi, Allahabad in F.Y. 2008-09 vide agreement to sale and out of the said amount the appellant had deposited Rs. 21,82,000.00 in his bank accounts and the balance amount was utilized for meeting household expenses.

3. Because with a view to prove and establish the fact that the appellant had received Rs. 2400000.00 from M/s AvtarChemist, 12 Rani MandiAlld, the appellant submitted various documents and evidences before the A.O. but the same have been discarded and disbelieved by the A.O. without any plausible material and reason. In fact the AO as well as the CIT(A) have drawn adverse inferences on the basis of surmises and conjectures which are not tenable in law.

4.Because M/s Avtar Chemist to the best of their hilt tried to prove the payment of Rs. 2400000 as advance money for purchase of flat to the appellant but the authorities below have concluded against the appellant without adverting to the actual fact and circumstances of the case.

5. Because Rs. 2400000 was paid by M/S Avtar Chemist out of his accounts which was duly explained and got verified by the authorities below but the same have been disbelieved by the said authorities without following the settled principal of law.

6. Because it is an admitted fact that M/s. Avtar Chemist had confirmed the payment of Rs. 2400000.00 to the appellant through their statement, written submission as well as producing the books of account and this fact has not been controverted by the authorities below. However, they ultimately concluded that since the entire payment to the appellant have been made through cash as such the same is not acceptable.

7. Because the appellant has also submitted that working of cash flow out of which the payment of Rs. 2400000 was made by the Avtar Chemist to the appellant but without appreciating the same have been disbelieved and a contrary finding has been recorded against the appellant.

8. Because out of the aforesaid cash flow it was submitted by the appellant that the partners of M/s. Avtar Chemist have contributed the amount for payment of Rs. 2400000.00 which amount was arranged by them by obtaining unsecured loan from their well-wishers but without disputing the fact about the said transactions the authorities below did not believe the said claim.

9. Because without disputing the fact that the partners have contributed the amount towards payment of the advance money to the appellant, the same has only been disbelieved on the ground that the partners have failed to prove source of money received from various persons.

10. Because once it is proved that the partners have contributed the money then it is settled law that they are not required to prove source to source and incase the authorities below come to the conclusion that the sources of the partners are not worthy or believe, they could be independently proceeded in law in their own stand but it would not give any authority to draw and adverse view against either to the partners or the appellant.

11. Because the appellant has established the identity, capacity genuineness of the transaction for payment of advance money received from M/s. Avtar Chemist but an adverse and contrary view have been taken by the authorities below merely on the basis of ulterior considerations which is not warranted in law.

12. Because the ld. CIT(A) as well as Ld. A.O. were legally not correct in making addition of Rs. 176800.00 toward expenditure on taking the properties allotted in possession, Rs. 200000.00 towards addition of unexplained investment in FDR and Household expenses amounting to Rs. 105800 without considering the full facts of the cases as well as giving credit to the opening balance lying with the bank as well as in cash flow statement submitted by the appellant.

13. Because the ld. CIT(A) had allowed benefit of double addition made in purchase of FDR and investment in properties which was otherwise allowable while telescoping the addition made to the extent of Rs. 21,82,000.00.

14. Because without prejudice to the above grounds of appeal, Sec. 68 does not apply to the facts of the appellant since for applicability of Section 68, the amount should be found credited in the books of accounts of the appellant and while admittedly the appellant is not maintaining any books of account. Further it is settled view of law that bank pass book is not a books of account. Accordingly the entire exercise done by the authorities below are against the provision of law and is liable to be annulled on this ground alone.

15. Because the agreement to sell have not been adversely commented rather the same has been accepted thus the refund of money in case of cancellation of deal is not liable to be taxed.

16. Because the appellant craves leave to add, amend or delete any ground or grounds of appeal at the same time of hearing of the present appeal.

17. Because the order is bad in law and facts and as such is liable to be cancelled to the extent indicated above.”

3. The brief facts of the case are that the assessee filed his return of income with Revenue on 14th August, 2009 , declaring total income of Rs. 4,56,844/-. The main sources of income of the assesseewere from interest on FDRs, interest on saving bank account and interest income of his minor son and daughter. The return of income of the assessee was processedby Revenue u/s 143(1) of the Act, and later on the case of the assesseewas selected for framing scrutiny assessment u/s. 143(3) read with Section 143(2) of the 1961 Act , through CASS on the basis of AIR information as cash was deposited in saving bankaccountsof the assesseeabove the prescribed threshold limits. The AO issued notices to assessee u/s. 143(2) and 142(1)of the 1961 Act from time to time, and it is claimed by Revenue that these notices were duly served on the assessee. During the course of assessment proceedings, the AO issued questionnaire and asked assessee to furnish various details. The assesseesubmitted part replies before the AO , and it is claimed by the AO that details of name and addresses of persons from whom the assessee has taken cash loans were not supplied by the assessee during the course of assessment proceedings. The AO issued summons u/s 131 to the assessee for examiningassessee on oath on 02.12.2011. The assessee appeared before AO on 02.12.2011 and filed application for adjournment. The AO provided one more opportunity to the assessee, and the case was accordingly fixed for 7th December , 2011. In the meantime , the AO issued notices u/s 133(6) of the 1961 Act to Branch Manager, Axis Bank , Mirzapur, Allahabad Bank, Mirzapur, and Kotak Mahindra Bank, Civil Lines, Allahabad, U.P., as in these banks the assessee was maintaining his bank accounts, with directions to furnish copies of bank accounts of FDR’s, TDR’s and SB accounts held in the name of the assessee. On 7th December, 2011 , the assessee’s counsel appeared before the AO and submitted medical certificate of illness of the assessee. In the meantime , the AO received information from the aforesaid banks as called for in the notices issued u/s 133(6) of the 1961 Act. The AO observed that during the course of assessment proceedings, the assessee has not fully complied with the notices issued by AO from time to time and non-cooperative attitude is adopted by the assessee. The AO proceeded to frame scrutiny assessment against assesseebased on material available on record.The AO observed that the assessee has submitted cash flow statement during course of assessment proceedings, in which the assessee accepted to have deposited cash of Rs. 29,38,300/- in his bank accounts, during the year under consideration . The assessee was asked to explain sources of thesecash deposits in his bank account. The assesseehad explained before the AO that Rs. 21,82,000/-was taken in cash from his friends and relatives during the year under consideration, which stood deposited in bank accounts. The assessee was asked by AO to furnish details of such persons with proof of their identity and I.T. return acknowledgement, but the assessee did not comply with the directions of the AO , and the name and addressesof his friends and relatives as well their identity, genuineness and credit worthiness from whom the assesseehas claimed to have received cash loan of Rs. 21,82,000/- were not furnished by assessee before the AO. The AO observed that the cash deposits in the bank accounts of the assesseeto the tune of Rs. 21,82,000/- could not be verified and hence the same were added to the income of the assessee by the AO as unexplained and unproved , vide assessment order dated 19.12.2011 passed by AO u/s 143(3) of the 1961 Act.

3.2 Further, it was observed by AO that the assessee has shown house-hold expenses to the tune of Rs. 1,44,400/- , while the assessee spent Rs. 1,17,447/- on studiesof his children. The AO observed that the assessee’s family comprised of self, wife and two children who are studying. The AO observed that the household spending appears to be very low considering the status of the family andforeign trips as were made by the assessee during the year under consideration. The AO estimated household expenses of the assesseeto the tune of Rs. 2,50,000/-, and consequently an addition of Rs. 1,05,600 was made by AO to the income of the assesseeon account of low household expenses , vide assessment order dated 19.12.2011 passed by AO under Section 143(3) of the Act.

3.3 There were further additions being made by AO on account of un-explained investment in FDR made by assessee with Kotak Mahindra Bank, Civil Lines, Allahabad on 12th July, 2008to the tune of Rs. 5lakh , and also on account of FDR of Rs. 5lakh made by assessee on 4th August, 2008 with Axis Bank, Mirzapur, of which as per AO the sources of these FDR’s remained unexplained and consequently the said sum of Rs. 10,00,000/- stood added by AO to the income of the assessee, vide assessment order dated 19.12.2011 passed by AO u/s 143(3) of the 1961 Act.

3.4 The AO made further additions to the income of the assessee to the tune of Rs.7,50,000/- on account of unexplained investment in property. The AO observed that investment in properties made by assesseewere to the tune of Rs. 36,50,500/­( Rs. 29,00,500/- invested in Flat No. A-506B , AnsalRohtas Stylus, VibhutiKhand, while Rs. 7,50,000/- invested in booking of DLF Plaza, Lucknow) , as against Rs. 29,00,500/- shown by the assessee. Thus, the differential amount of Rs. 7,50,000/-was treated by AO as unexplained investment and added to the income of the assessee , vide assessment order dated 19.12.2011 passed by AO u/s 143(3) of the 1961 Act.

4. Aggrieved by an assessment framed by AO vide assessment order dated 19.12.2011 passed u/s 143(3) of the 1961 Act, the assessee filed first appeal with Ld. CIT(A) , who was pleased to pass detailed, speakingand reasoned appellate order dated 31.07.2014, after makingdue enquiries and verifications , which appellate order is annexed to this order. In nut-shell, the ld. CIT(A)was pleased to confirm the addition ofRs. 21,82,000/- as was made by AO, on account of unexplained cash deposits in the bank account of the assessee, after making due enquiries and verifications. During the course of appellate proceedings before ld. CIT(A), the assessee has changed its stance and taken a new plea that amount of Rs. 24,00,000/- was received by assesseein cash from M/s AvtarChemist towards advanceagainst sale of his property situated at Flat No. H-5 , built over a part of freehold site number 31/1, Civil Station , situated in Mohalla Mahatma Gandhi Marg, Civil Lines, Allahabad, vide unregistered agreement to sale dated 29.09.2008. It was explained by assessee before ld. CIT(A) that out of the said cash advance of Rs. 24,00,000/- received against sale of aforesaid property from M/s. Avtar Chemist, an amount of Rs. 21,82,000/- was deposited by assesseein cash in bank accounts of the assessee. However, earlier the assessee had taken stand before AO that an amount of Rs. 21,82,000/- was raised in cash from friends and relatives, of which the assessee furnished no details before the AO. The ld. CIT(A) after due enquiries and verification proved that the said M/s. Avtar Chemist was not having cash available of Rs. 24,00,000/- with it to make cash payment to assesseeas advance against purchasing aforesaid property from assessee. The ld. CIT(A) demonstrated that cash available with M/s. Avtar Chemist was only to the tune of Rs. 6,28,572/- and hence it was not possible for M/s. Avtar Chemist to advance cash of Rs. 24,00,000/- to assessee as advance for purchasing aforesaid property from assessee. The ld. CIT(A) also noted that the assessee has changed its stance before ld. CIT(A) that this amount of Rs. 24,00,000/- was received in cash as advance against sale of aforesaid property which was utilized for depositing cash in bank accounts , as against the earlier stand taken before the AO that an amount of Rs. 21,82,000/- was received in cash from friends and relatives which amount was used by assesseeto deposit cash in his bank accounts. The ld. CIT(A) held that M/s Avtar Chemist has not given any cash advance of Rs. 24,00,000/- to assessee for purchasing any property from the assessee and further held that the assessee has not entered into any agreement for sale dated 29.09.2008, for sale of its flat toM/s. Avtar Chemist and the entire story is cooked up only to explain the source of cash deposit in the bank accounts of the assessee and household expenses. The ld. CIT(A) was pleased to confirm additions to the tune of Rs. 21,82,000/- on account of cash deposits in assessee’s bank accounts , which as per ld. CIT(A) the assessee was not able to substantiate , vide appellate order dated 31.07.2014 passed by ld. CIT(A).

4.2 So far as additions as were made by AO on account of low household expenses to the tune of Rs. 1,05,600/-, the ld. CIT(A) upheld the same on the grounds that the assessee has shown household expenses to the tune of Rs. 1,44,400/- ,while the assessee has spent Rs. 1,17,447/- towards education of children. The ld. CIT(A) further observed that the assessee has also undertaken foreign trip during the year under consideration. The ld. CIT(A) also observed that the claim of the assessee that he received Rs. 24,00,000/- in cash towards advance against sale of his aforesaid flat to M/s. Avtar Chemist, which was used to deposit cash of Rs. 21,82,000/- in his bank accounts and balance amount of Rs. 2,18,000/- was used for household expenses , stood already rejected by ld. CIT(A) as the entire story of having received cash against advance for sale of aforesaid flat stood rejected by ld. CIT(A) in its appellate order dated 31.07.2014 and hence this claim of the assessee that Rs. 2,18,000/- received out of advance for sale of aforesaid flat , was used towards meeting household expenses , was rejected by ld. CIT(A), vide appellate order dated 31.07.2014 and addition of Rs. 1,05,000/- as was made by AO towards household expenses stood confirmed by ld. CIT(A).

4.3 So far as addition of Rs. 10,00,000/- as made by AO regarding unexplained investment in FDRs made by assessee with Kotak Mahindra Bank, Civil Lines, Allahabad , firstly on 12th July, 2008 to the tune of Rs. 5 lakh , the ld. CIT(A) went through the bank statement of the assessee with Kotak Mahindra Bank and other details available on record , and ld. CIT(A) was pleased to confirm addition of Rs. 2,00,000/- as unexplained investment in FDR, while addition of Rs. 3,00,000/-stood deleted by ld. CIT(A) on the grounds that the assessee has claimed to have received in cash of Rs. 3,00,000/- on 10.07.2018 from M/s. Avtar Chemist which was included in total cash advance of Rs. 24,00,000/- claimed to have been received by assessee from M/s. Avtar Chemist as advance against sale of flat, and since addition to the tune of Rs. 21,82,000/- of cash deposit in bank already stood confirmed along with low household expenses, then the addition to the tune of Rs. 2,00,000/- is only sustainable, while addition of Rs. 3,00,000/- was deleted by ld. CIT(A) as the said sum became part of addition to the tune of R2. 21,82,000/-which stood confirmed by ld. CIT(A) . The assessee has deposited Rs. 29,38,000/-in his bank accounts in cash during the year under consideration, and Rs. 5 lacs was deposited on 12.07.2008 in cash by assessee in Kotak Mahindra Bank and FDR of Rs. 5 lacs was also made on the same day viz. 12.07.2008. So far as FDR of Rs. 5 lakh made by assessee on 4th August, 2008 with Axis Bank, Mirzapur, the ld. CIT(A) observed that the assessee has opening balance as on 01.04.2008 of Rs. 11,32,875.36 and there were no cash deposit in Axis Bank till 24.10.2008 , and hence ld. CIT(A)was pleased to delete the addition as were made by AO to the tune of Rs. 5,00,000/- on account of FDR of Rs. 5,00,000/- made by assessee on 04th August, 2008 with Axis Bank, Mirzapur as the said FDR was made from assessee’s bank account and there was no cash deposit prior to making of said FDR and the balance held with Axis Bank was sufficient to explain the making of said FDR of Rs. 5,00,000/- from Axis Bank, Mirzapur , on 04th August, 2008, vide appellate order dated 31.07.2014 passed by ld. CIT(A).

4.4 So far as additions to the income of the assessee to the tune of Rs.7,50,000/- on account of unexplained investment in property which was made by assessee on 06.08.2008 towards DLF Plaza, Lucknow , as was made by AO, the ld. CIT(A) confirmed the additions to the tune of Rs.1,76,800/- , which was in fact cash deposited by assessee in his bank account with Kotak Mahindra Bank on 12.04.2008 and 02.05.2008, which as per ld. CIT(A) remained unexplained, while rest of the unexplained investment as was held by AO to the tune of Rs. 5,73,200/-as per ld. CIT(A) stood explained by the assesseeand consequently addition to that extent stood deleted . The ld. CIT(A) went through the entire bank accounts and further referred to the cash deposited in bank accounts and the additions already sustained by him , to arrive at the decision to uphold additions towards unexplained investments to the tune of Rs. 1,76,800/- , vide appellate order dated 31.07.2014 passed by ld. CIT(A).

5. Aggrieved by an appellate order dated 31.07.2014 passed by ld. CIT(A), the assessee has filed an appeal before the tribunal. This appeal was heard through Virtual Court through Video Conferencing mode by Division Bench of tribunalon 04th August, 2021 and thereafter the department filed written counter submissions on 06th August, 2021 and 24th August, 2021 to the written submissions filed by ld. Counsel for the assessee on the final date of hearing on 04th August 2021, wherein Revenue has taken the stand that the written submissions filed by ld. Counsel for the assessee on 04th August, 2021 viz. on the date of final hearing before Division Bench , were not made available to the Department before the date of final hearing on 04th August, 2021 and it is only post hearing the said written submissions filed by ld. Counsel for the assessee on 4th August 2021 were made available to Department. In the interest of principles of natural justice and fairness to both the rival parties, it was considered appropriate to re-fix this appeal for clarification so that both the parties are finally heard on these counter written submissions filed by Revenue post hearing of the appeal on 04th August, 2021. The appeal was finally heard by Division Bench on 01st October, 2021, wherein both the rival parties made their final arguments with respect to issues agitated in this appeal.

5.2 The ld. Counsel for the assesseeopened arguments before us. The ld. Counsel for the assessee submitted that the assessee had expired on 22.12.2014 and the legal heir namely his wife Mrs. Shaheen Khan is brought on record and fresh Form No. 36 is filed with tribunal substituting legal heirs by bringing them on record.The said fresh Form no. 36 filed by legal heirs of assesseeis placed on record in file. It was submitted by ld. Counsel for the assessee that affidavit of legal heir Mrs. Shaheen Khan along with death certificate of Mr. Ahmad Hussain Khan is also filed, which arealso placed on record in file. The Ld. DR has also placed on record letter dated 19.02.2021 addressed to tribunal, supported with letter No. F.No. ACIT/C-1/VNS/ITAT/AAQPK8864N/2020-21/1143 , dated 11.02.2021 of ld. ACIT, Circle-1, Varanasi addressed to ld. Addl. CIT, Sr. DR, ITAT, Allahabad, intimating that the assessee expired on 22/12/2014 , along with succession certificate dated 03.09.2016 in favour of Mrs. Shaheen Khan(wife of Late Mr. Ahmad Hussain Khan) by Civil judge(CD) , Mirzapur, U.P.. The said documents are placed on record in file. It was submitted by ld. Counsel for the assesseethat addition of Rs. 21,82,000/- was made by the AO which was later confirmed by ld. CIT (A) , which additions relates to cash deposits in the bank accounts of the assessee and on the allegation that source of raising cash for making deposits in the bank accounts of the assessee were not explained by assessee . It was submitted by ld. Counsel for the assessee that an amount of Rs. 24,00,000/- was received in cash from M/s. Avtar Chemist on various dates during the year under consideration towards advance against sale of assessee’sproperty being Flat No. H-5 , built over a part of freehold site number 31/1, Civil Station , situated in MohallaMahatama Gandhi Marg, Civil Lines, Allahabad, vide agreement to sale dated 29.09.2008. It was submitted by ld. Counsel for the assessee that Shri. Anil Saraf, Partner of M/s. Avtar Chemist appeared before the AO and hence identity of the said assessee namely M/s. AvtarChemist stood established . It was submitted by ld. Counsel for the assessee that creditworthiness of the said party M/s. Avtar Chemist was proved before the AO (during remand proceedings by AO) and also before ld. CIT(A). It was submitted by ld. Counsel for the assessee that said Mr. AnilSaraf has given statement on oath before the AO, during remand proceedings. Our attention was drawn to page 6 of the assessment order, wherein the AO made additions to the tune of Rs. 21,82,000/- on account of cash deposits in the bank accounts maintained by assessee. Our attention was also drawn to page 11 and 14 of ld. CIT(A) orders. Our attention was also drawn to page 55-56 of the paper book, wherein statement of Shri Anil Kumar Saraf, Partner of M/s. Avtar Chemist, dated 05.09.2013 recorded before AO u/s 131 is placed. It was submitted that cash flow statement was filed by assessee. It was submitted by ld. Counsel for the assessee that the revenue is asking assessee to explain source of source of cash deposits in the bank accounts , which is not permissible. It was also submitted that bank pass book is not books of accounts, and hence no additions u/s. 68 of the 1961 Act can be made . It was also submitted by ld. Counsel for the assesseethat vide Ground No. 12 raised by assessee in memo of appeal filed with tribunal , the assessee has challenged the additions to the tune of Rs. 1,05,600/- as confirmed by ld. CIT(A) on account of low household expenses as also additions to the tune of Rs. 2,00,000/- as confirmed by ld. CIT(A) on account of unexplained investment in FDR which also is challenged by assessee, and also addition of Rs. 1,78,600/- as confirmed by ld. CIT(A) on account of unexplained investment in property is subject to challenge before tribunal. The ld. Counsel for the assessee submitted that written submission are filed in explanation of all the additions as were made by the authorities below and prayers were made to adjudicate the same on merits. Our attention was also drawn to page 57-61of the paper-book , wherein agreement to sale dated 29.09.2008 claimed to have been entered into by assessee with M/s. Avtar Chemist is placed. Incidentally this agreement to sale is not having any pre-printed numbers affixed by GOI press. It also did not have any details of date of issue of stamp paper , stamp paper vendor, on whose favour this stamp paper was issued and purpose of stamp paper. This fact was brought to the notice of the Ld. Counsel for the assessee. The ld. Counsel for the assessee has later submitted copies of agreement to sale dated 29.09.2008 with reply dated 03.02.2021(placed on record), and the claim is made that stamp paper were issued on 30.03.2008 and it bore the stamp of the vendor at the back side of the stamp paper.

5.3. The Ld. DR, on the other hand, submitted that the Department has filed written submission, dated 2nd August, 2021 which should be taken on record. It was submitted by ld. DR that the assessee is supposed to explain cash deposits in his bank accounts. It was submitted by ld. DR that since there were more than Rs.10 lacs cash deposits in the bank accounts of the assessee, the case was selected for framing scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act, based on information in AIR. Our attention was drawn to Page No. 7 of the written submissions dated 02.08.2021 filed by Ld. DR, and it was submitted by ld. DR that there is a schedule of AIR information in the income tax return, but the assessee failed to declare and disclose that an amount of more than Rs. 10 lacs was deposited in cash in his bank accounts during the year under consideration in the aforesaid AIR schedule in ITR. It was submitted by Ld. DR that cash was deposited by assesseein his Axis Bank and Kotak Mahindra Bank accounts,totaling more than Rs.10 lakhs during the year under consideration and hence the case of the assessee was selected for framing scrutiny assessment under CASS , based on AIR information. It was also submitted by ld. DR that Kotak Mahindra Bank account was not shown in the ITR filed by assessee with Revenue. Our attention was drawn to Page Nos. 3 of ITR(page 3 of written submission dated 02.08.2021 ). Our attention was also drawn to page 8/written submissions, which is computation of income. Our attention was also drawn by ld. DR to Page Nos. 9 to 11 of the written submission filed by Department to contend that the AR did not explain source of cash deposited in bank accounts before the AO and was merely seeking adjournment from AO from time to time. Our attention was also drawn by ld. Counsel for the assessee to page 12 and 13 of the written submissions filed by ld. DR, wherein vide letter filed on 24.11.2011 , the assessee enclosed cash flow statement. In the cash flow statement which is annexed to this letter, the assessee has stated that Rs. 21,82,000/- was received as loan from friends and relatives during the year under consideration (page 13/ written submissions by ld. DR). It was submitted by ld. DR that more than 27 lakhs+ were deposited in cash during the year under consideration in Kotak Mahindra Bank , while Rs. 1 lakh cash was deposited in Axis Bank. Our attention was drawn to page 14 and 15 of written submissions filed by ld. DR to contend that the assessee was merely seeking adjournment before the AO , instead of explaining the sources of cash deposits in bank accounts. Medical Certificate was submitted on 3.12.2011 by counsel for the assessee stating that the assessee is ill , and the assesseethereafter did not appeared before the AO. The ld. DR submitted that assessment order was passed by AO on 19.12.2011, u/s 143(3) of the 1961 Act. It was submitted that when the case was pending before Ld. CIT (A) for adjudication , and after a gap of more than one year, the assessee asked for order sheet entries from the AO , reference was drawn by ld. DR to page 19-24 of written submissions filed by ld. DR. It was submitted by ld. DR that it is only before ld. CIT(A) , that theassessee came out with a new plea that there is an agreement to sale and the assessee claimed that an amount of Rs. 24 lacs was received in cash by assessee as advance against the sale of his aforesaid , vide agreement to sale dated 29.09.2008. It was also submitted by ld. DR that first cash deposit was made by assessee with Kotak Mahindra Bank on 12.04.2008 , of Rs. 1.00 lacs. On 02nd May , 2008, the assessee deposited cash of Rs. 76800/- in Kotak Mahindra Bank. On 12.07.2008, the assessee deposited Rs. 5.00 lacs in cash with Kotak Mahindra bank , and on 06.08.2008, the assessee further deposited cash of Rs. 5.00 lacs with Kotak Mahindra Bank and finally on 17.10.2008, the assessee deposited cash of Rs. 16 lacs with Kotak Mahindra Bank.

Thus, in all cash of Rs. 27,76,800/- was deposited by assessee in Kotak Mahindra Bank , during the year under consideration. It was submitted that cash of Rs. 11,76,800/- was deposited in cash in Kotak Mahindra bank , prior to execution of agreement to sale which is dated 29.09.2008.It was submitted by ld. DR that there is no unique identification number in the stamp paper on which agreement to sale was claimed to be executed. It was submitted that this stamp paper was acquired only to create evidence and is merely an afterthought. Our attention was drawn to appellate order passed by ld. CIT(A), page 92 onwards and it was submitted that the assessee changed its stance before ld. CIT(A). It was submitted by ld. DR that ld. CIT(A) had discarded this agreement to sale, as this document is a cooked up document and is merely an afterthought. Our attention was drawn to written submissions filed by ld. DR , dated 02.12.2011. Our attention was drawn to page 23/written submissions filed by ld. DR on 03.02.2021, and it was submitted that the assessee initially claimed before AO that the said amount of cash of Rs. 21,82,000/- was received as loan from friends and relatives. It was submitted that in cash flow statement filed by assessee before AO, it was clearly stated that the amount of Rs. 21,82,000/- was received as loans from friends and relatives , while before ld. CIT(A) , a new stand was taken that the amount of Rs. 24,00,000/- was taken as advance in cash as advance against sale of aforesaid flat. It was submitted that the AO called information from Sub-Registrar and ld. Sub-Registrar submitted in reply that this unregistered agreement to sale is not admissible as an evidence.

5.4 The ld. Counsel for the assessee submitted in rejoinder that the assessee could not produce correct details before the AO, but the same were presented before ld. CIT(A). It was submitted by ld. Counsel for the assessee that additional evidences were placed before ld. CIT(A) stating correct facts and our attention was drawn to page 11 of the appellate order passed by ld. CIT(A).

5.5 The ld. DR submitted that the assessee has claimed that finally this agreement to sale dated 29.09.2008 was not implemented and sale deed could not be executed and it is claimed that this agreement to sale stood cancelled in 2013, and finally aforesaid flat never got transferred in favour of M/s. Avtar Chemist. It was submitted that ld. CIT(A) examined these documents . The assessee has claimed before ld. CIT(A) that although M/s. Avtar Chemist advanced cash of Rs. 24 lacs to assessee, but the partners introduced the cash in the firm by in-turn borrowing from 33 persons and in each case the said borrowings was less than Rs. 20000/-. The ld. DR submitted that ld. CIT(A) examined 33 persons and concluded that the amount remained unexplained. Our attention was drawn to page 92-93 of appellate order passed by ld. CIT(A). It was further submitted that M/s. Avtar Chemist filed its income-tax return for ay: 2009-10 to 2012-13, and thereafter no income tax return was filed. It was further submitted that the income tax cases of the said M/s. Avtar Chemist were processed u/s 143(1), and it was submitted that partners of M/s. Avtar Chemist did not file income tax return for any of the ay’s. The ld. AR rebutted to this and said ld. CIT(A) has recorded in its order that the partners of M/s. Avtar Chemist filed their return of income. Our attention was drawn by ld. DR to page 92-94 and 104 of appellate order passed by ld. CIT(A). The ld. DR also made submission, without prejudice, that in case if the Division Bench holds that M/s. Avtar Chemist gave Rs. 24 lacs in cash to the assessee as advance for purchase of property, then in that case, the said amount is to be added as income in the hands of M/s Avtar Chemist.

5.6 The ld. Counsel for the assessee relied upon the judgment of Hon’ble Supreme Court in the case of Dakeswari Mills Limited v. CIT , reported in (1954) 26 ITR 775(SC); decision of Hon’ble Supreme Court in the case of Chuhamal v. CIT , (1988) 172 ITR 250(SC) , Thiruvengda Pillai v. Navneethammal in WP(Civil) No. 290/2001 , dated 19.02.2008. The ld. Counsel for the assessee submitted that all objections of ld. DR are based on surmises and conjectures.

5.7 When this appeal was heard on clarification on 01.10.2021 , for the reasons cited in preceding para’s of this order, the rival parties made the following contentions:

5.7.1 The ld. Counsel for assesseehas now filed counter to department’s written submissions, filed by ld. DR post hearing on 06.08.2021 and 24.08.2021, which is placed on record in file. The ld. DR submitted that he has already made his submissions in details in written submissions filed with tribunal, and he would rely on oral as well written submissions/counter filed with tribunal. The ld. Counsel for the assessee submitted that the assessee has already proved all the three ingredients of Section 68 of the 1961 Act viz. identity, creditworthiness and genuineness of the transactions stood proved , and hence no addition is warranted in the hands of the assessee. The ld. Counsel for the assessee submitted that submissions of ld. DR are all based on surmises, assumptions and conjectures . It was submitted that the said sum was reflected in the subsequent years and is not an income of the assessee.

6. We have considered rival contentions and perused the material on record including cited case laws. The assessee is an individual , deriving income from interest from FDR’s , SB account and interest income of minor children. As per material available on record, there is no other declared sources of income , apart from interest income, as detailed above. The assessee filed his return of income with Revenue on 14th August, 2009 , declaring total income of Rs. 4,56,844/-. The case of the assessee was selected by Revenue under CASS for framing scrutiny assessment u/s. 143(3) read with Section 143(2) of the 1961 Act, based on AIR information that the assessee has deposited during the year under consideration cash of more than threshold limits in his saving bank accounts. The assessee had admittedly deposited cash of Rs. 29,38,300/- in his saving bank accounts during the year under consideration. During the course of assessment proceedings conducted by AO u/s. 143(3) read with Section 143(2) of the 1961 Act, the assessee was , inter-alia, asked by AO to explain sources of cash deposits in his saving bank accounts . The assessee submitted cash flow statement before ld. AO in which the assessee explained that cash of Rs. 21,82,000/- was received from friends and relatives , as cash loans during the year under consideration . The AO asked assessee to furnish details of the persons from whom said cash loans were taken, including identity, IT return acknowledgment . The assessee did not furnish any details of persons from whom the assessee has claimed to have received cash loans of Rs. 21,82,000/- during the year under consideration , but rather sought adjournments from time to time. The AO made additions to the tune of Rs. 21,82,000/- in the hands of the assessee on the grounds that cash deposits in the bank accounts of the assessee to the tune of Rs. 21,82,000/- could not be verified and hence the same was added to the income of the assessee by AO as unexplained and unproved cash deposits. Being aggrieved, the assessee filed first appeal with ld. CIT(A). During the course of appellate proceedings before ld. CIT(A), the assessee changed its stance and submitted that the assessee has received cash advance of Rs. 24,00,000/- from M/s Avtar Chemist as advance towards sale of his flat situated at Flat No. H-5, built over a part of freehold site number 31/1, Civil Station , situated in MohallaMahatama Gandhi Marg, Civil Lines, Allahabad, vide agreement to sale dated 29.09.2008. The assessee explained before ld. CIT(A) that the assessee was not well when assessment proceedings were going on before the AO , and medical certificates to that effect were duly submitted before AO during the course of assessment proceedings , and the assesseefurther claimed before ld. CIT(A) that the AO did not provide adequate opportunity of being heard , and it was claimed that , hence , this was the main reasons that the correct details could not be submitted by assesseebefore the AO , as the assessee claimed that it submitted details before AO without verifying from records. The ld. CIT(A) made detailed enquiries and verifications during appellate proceedings including summoning third parties and also seeking remand reports from AO. The ld. CIT(A) also complied with principles of natural justice wherein all the relevant material obtained during enquiry and verifications by ld. CIT(A) including remand reports submitted by AO , were all confronted to assesseefor his rebuttal, before passing appellate order against the assessee. The ld. CIT(A) observed that contention of the assessee that the AO did not provided adequate opportunity of being heard during the course of assessment proceedings is not correct as that as many as 12 notices were issued by AO , and rather it is the assessee who did not provide the relevant and complete information despite being given proper and adequate opportunity of being heard. The ld . CIT(A) also observed that the AO in its remad report did not deny that medical certificate was submitted by assessee before the AO during the course of assessment proceedings. The ld. CIT(A) admitted additional evidences filed by assessee, called for remand reports from AO and confronted the same to assessee for rebuttal, before proceeding to adjudicate appeal filed by assessee on merits . The ld. CIT(A) finally arrived at decision that M/s Avtar Chemist has not given any cash advance of Rs. 24,00,000/- to assessee for purchasing any property from assessee and further held that the assessee has not entered into any agreement for sale dated 29.09.2008, with respect to sale of his flat to M/s. Avtar Chemist and the entire story is cooked up by assesseeonly to explain the source of cash deposits in his bank accounts and to explain additions made towards low household expenses declared by assessee. We have observed that the assessee has changed its stance before ld. CIT(A) that sources of cash deposit in his bank accounts to the tune of Rs.21,82,000/- were out of cash advance of Rs. 24,00,000/- received by assessee from M/s. Avtar Chemist against sale of his aforesaid flat, while earlier stand taken by assessee before AO vide cash flow statements submitted before AO during the course of assessment proceedings, was that cash loan of Rs. 21,82,000/- were received by assessee from his friends and relatives of which , however, no details were furnished by assessee before the AO during the course of assessment proceedings as to name and addresses of the friends and relatives from whom cash loans were obtained by assessee, their PAN number, creditworthiness and genuineness of these so called cash loans claimed to be received from friends and relatives. The justification offered by assessee is that the assessee was unwell when assessment proceedings were going on and hence correct details could not be filed before the AO during the course of assessment proceedings as details were submitted before referring to documents, does not inspire confidence as what appears is that the stand now taken by assessee that cash advance of Rs. 24,00,000/- was received against the sale of flat is taken by assessee to save himself from the clutches of tax liability and also penalty provisions as cash loans above threshold limits are subject to penalty provisions u/s 269SS of the 1961 Act. Even if we accept the claim of the assessee that correct details could not be presented before the AO as the assessee was unwell or the assessee offered explanation before AO without referring to documents we have to see the entire changed version on the touchstone of preponderance of human probabilities and material available on record. We have observed that the said agreement to sale dated 29.09.2008 stipulates that the total consideration of the flat was Rs. 33 lacs, and claim is made that M/s Avtar Chemist has advanced cash advance of Rs. 24 lacs to the assessee, while market practice generally prevalent is to give advance of around 10% of the total value of purchase price ,while in the instant case , cash advance of 72.7% was given by buyers and that too in cash in advance without entering into agreement to sale as all alleged cash advances preceded the agreement to sale dated 29.09.2008 as per details submitted by assesseeand available on record, as under :-

10.07.2008                     Rs. 3,00,000/- cash claimed to have been received by

assessee from M/s Avtar Chemist against

cash advance against sale of his flat

 04.08.2008                   Rs. 5,00,000/- cash claimed to have been

received by assessee afrom M/s Avtar

Chemist against cash advance against

sale of his flat

27.09.2008                    Rs. 16,00,000/- cash claimed to have been received by

assesseefrom M/s Avtar Chemist against

cash advance against sale of his flat

The agreement to sale is claimed to be dated 29.09.2008 , while all the payments in cash were claimed to have been received prior to signing of agreement to sale dated 29.09.2008, which itself is against human probabilities that buyers have made huge cash advances to assesseewithout any agreement to sale. Further, it is observed that agreement to sale , dated 29.09.2008 is an unregistered agreement. It is also observed that the stamp paper claimed to be used by assessee for executing agreement to sale was stated to be issued on 30.03.2008 as per details overleaf, the stamp paper is around six months prior to execution of agreement to sale. The validity of stamp paper is six month and it is only on last days when the stamp paper was about to expire, this agreement to sale is claimed to have been entered on 29.09.2008. This also is against preponderance of human probabilities that the assessee has allegedly bought the stamp paper six months prior to its execution. The stamp papers used to execute agreement to sale, dated 29.09.2008 does not have pre-printed numbers embossed on the stamp paper, which are embossed for identifying the genuineness of stamp paper and identifying the GOI press in which the said stamp papers were printed, and further also the issuing vendor has not placed serial numbers of entry in register maintained for keeping record for the details of issuing stamp papers, in the stamp paper which is the market practice . This cast doubt over the genuineness of the entire story of entering into agreement to sale , dated 29.09.2008 and receipt of cash advance of Rs. 24 lacs by assessee from M/s Avtar Chemist, as an cash advance for sale of assessee’s flat. The learned CIT(A) made detailed enquiries and verification and demonstrated that said M/s Avtar Chemist was not having cash of Rs. 24,00,000/-in its books of accounts to advance to assessee the said sum of money as cash advance for purchase of aforesaid flat , and at best, M/s Avtar Chemist was having cash of Rs.6,28,572/- in its books of accounts to advance to assessee for purchasing flat and the entire story is cooked up and after thought to come out of clutches of tax-liability and penal provisions. The said M/s Avtar Chemist claimed that it was not having cash of its own in its books of accounts, but it received cash amounts from its partners who in turn borrowed in cash as loan in small denominations from large number of persons , 51 alleged lenders who have given cash loans to partners to the tune of Rs. 12.70 lacs in small denominations which stood infused in the firm M/s Avtar Chemist in cash , who in turn gave cash advance to assessee of Rs. 24 lacs to buy assessee’s flat . When the partners of Avtar Chemist were called by ld. CIT(A), they were not able to give at first instance details of the persons who gave them these cash loans , and rather in some cases, they changed the name of lenders to small denominations of cash loans of each less than Rs. 20000/- instead of earlier names of lender who gave higher amount of loans which could entail penalty provision u/s 269SS. Mr. AnoopSaraf, partner of M/s Avtar Chemist first stated on oath before ld. CIT(A) that an amount of Rs. 1.75 lacs was given as cash from his own sources to M/s Avtar Chemist , Rs.1.25 lacs was received by him as cash loan from Shri NeeluVerma which was used to give to M/s Avtar Chemist ,Rs. 50,000/- was received as cash loan from Shri Ashok KesarwaniVerma which was used to give to M/s Avtar Chemist and Rs. 1,00,000/-was received as cash loan from Shri Vijay KesarwaniVerma which was used to give to M/s Avtar Chemist. The said Avtar Chemist has inturn claimed to have given in aggregate Rs. 24 lacs to assessee in cash as advance for purchase of assessee’s flat. Mr. AnoopSaraf , Partner of M/s Avtar Chemist also explained his relationship with these persons, but later changed his version and stated that he was wrong when he said these cash loans were received from the above three persons , rather Mr. AnoopSaraf, Partner , Avtar Chemist later stated that the total amount of Rs. 4,50,000/- ( including his claim of giving Rs. 1.75 lacs to Avtar Chemist from his own sources) was received from 15 lenders who gave cash loans of small denomination of each being less than Rs. 20,000/- which was obviously done to save himself from the penal provision u/s 269SS. Mr. AnoopSaraf had also stated It is also brought on record that the partners of Avtar Chemist were having meager income and they were not filing any return of income with department. The ld. CIT(A) examined these so called 51 lenders stated by all the partners of Avtar Chemists to have given them cash loans , and demonstrated that these persons either denied to have given any cash loans to Partners of M/s Avtar Chemist or they abstained from appearing before ld. CIT(A) or these persons were not having means to advance cash loans to partners of M/s Avtar Chemist. It is also seen from perusal of bank statements of M/s Avtar Chemist , that M/s Avtar Chemist was making even small-small payments such as payment to LIC etc. vide cheques . Thus, the normal practice adopted by M/s Avtar Chemist is to give payments by cheques even of small-small denominations , but this huge amount of Rs. 24 lacs is paid by M/s Avtar Chemist in cash to assessee, and that too by infusing of funds from partners in the firm in cash , who have claimed that in turn they borrowed to the tune of Rs. 12.70 lacs in cash from large number of lenders running into 51 persons. The assesse is not able to controvert the finding of ld. CIT(A). Proceeding further, ultimately the sale of aforesaid flat did not got completed and it is claimed that after a gap of five years in March, 2013, the said agreement to sale dated 29.09.2008 was cancelled and the assessee paid back cash of Rs. 24,00,000/- to M/s Avtar Chemist, which was claimed to have been paid by assessee to Avtar Chemist over a period of two financial yearsviz. financial year 2011-12(Rs. 21 lacs) and 2012-13(Rs. 3 lacs). The repayment in f.y.2011-12 and 2012-13 as detailed above was also paid in cash by assessee to M/s Avtar Chemist, and it is claimed that these amounts were out of cash withdrawals from bank. Firstly, claim was made before ld. CIT(A) that M/s Avtar Chemist did not made payment of balance amount of Rs. 9 lacs and hence the agreement to sale , dated 29.09.2008 was cancelled in 2013, but now stand is changed once again by assessee that the map of the flat was not approved by competent authority and hence the sale was cancelled after a gap of five years. It is pertinent to mention that there is no evidence brought on record by assessee to demonstrate that any effort was made by assesseeor said M/s Avtar Chemist to get the map approved from competent authorities or to get the defects removed in the map/constructed flat, in five years period from 2008-2013. No doubt the partner of M/s Avtar Chemist appeared before authorities and his statement was recorded wherein he confirmed that M/s Avtar Chemistgave cash advance of Rs. 24 lacs to assessee as for purchase of assessee’s flat, but if the whole narrative of the assessee is seen in totality , the claim made by assessee of having received cash advance of Rs. 24 lacs in financial year 2008-09 against sale of his flat , does not inspire confidence , and ld. CIT(A) has rightly arrived at decision that the M/s Avtar Chemist has not given any cash advance of Rs. 24,00,000/- to assessee for purchasing any property from assessee and further held that the assessee has not entered into any agreement for sale dated 29.09.2008, for sale of its flat to M/s. Avtar Chemist and the entire story is cooked up only to explain the source of cash deposit in his bank accounts of the assessee and to explain additions made towards low household expenses, which was done to save assessee himself from the clutches of tax liability and penalty provisions . Rather, the ld. CIT(A) proved after detailed enquiry and verification, that said M/s Avtar Chemist was never having sufficient cash available in its books to advance Rs. 24 lacs to assessee in cash as advance for purchase of assessee’s flat. The assessee is not able to controvert the finding of ld. CIT(A). Keeping in view the entire material on record, we are of the considered view that ld. CIT(A) rightly arrived at decision of rejecting the contentions of the assessee and upholding the additions of Rs. 21,82,000/- , and we confirm the well reasoned, detailed and speaking order passed by ld. CIT(A) which was passed by ld. CIT(A) after detailed enquires and verifications and the said appellate order was also passed by ld. CIT(A) after complying with principles of natural justice wherein the ld. CIT(A) confronted assessee with all material for rebuttal before passing appellate order , and we are not inclined to interfere with the appellate order passed by ld. CIT(A), which we confirm/uphold, and hold that cash deposit to the tune of Rs. 21,82,000/- as was made by assessee in his bank account was out of income from undisclosed sources of the assessee. Thus, what is apparent is not real although paper trail is created by assessee, but the same does not inspire confidence and the apparent is not real as the whole transaction of receiving cash advance of Rs. 24 lacs from M/s. Avtar Chemist as cash advance against sale of assessee’s flat is merely an after thought and a story created by assessee to save himself from tax liability and penal provisions , and rather this cash deposit of Rs. 21,82,000/- was concealed income of the assessee from undisclosed sources. Reference is drawn to decision of Hon’ble Supreme Court in the case of CIT v. Daulat Ram Rawat Mull (1977) 87 ITR 349(SC) and decision of Hon’ble Supreme Court in the case of Sumati Dyal v. CIT , reported in (1995) 214 ITR 801(SC). The assessee has relied upon the decision of Hon’ble Supreme Court in the case of Dakeshwari Mills Limited(supra), but in our considered view this case does not support the stand of the assessee, as we have already observed that the AO issued as many as 12 notices and it was the assessee who sought adjournments from time to time and finally did not give complete information before the AO, and later the assessee changed its stand before ld. CIT(A). Rather, the ld. CIT(A) admitted additional evidences filed by assessee, sought remand reports from AO twice and in fact adjudicated appeal of merits after giving proper and adequate opportunity to assessee and also complying with principles of natural justice. All the material was confronted by ld. CIT(A) to assessee for rebuttal before passing appellate order, which order was passed after detailed enquiries and verification, and is a detailed, well reasoned and speaking order . The assessee has also relied upon decision of Hon’ble Supreme Court in the case of Chuhamal(supra). This case also does not support the assessee as in this case Hon’ble Supreme Court in context of Section 69A has held that Section 69A coupled with surrounding circumstances can be considered to draw inference that the tax-payer invested in wrist watches which was found from the possession of the tax-payer , out of concealed income . In the instant case also, the explanation offered by assessee coupled with paper trail created does not inspire confidence based on the entire factual matrix of the case which already stood rejected by us, and we have already held that cash deposits to the tune of Rs. 21,82,000/- in bank accounts of the assessee were from concealed income of the assessee from undisclosed sources .The assessee has also relied upon decision of Hon’ble Supreme Court in the case of Thiruvengda Pillai (supra). This case was decided on its own facts and also this case was not in context of income tax proceedings. While in the instant case before us, we have arrived at decision after carefully considering the entire material on record and also on the touchstone of preponderance of human probabilities. The assessee has infact deposited cash of Rs. 29,38,300/- in his bank accounts. It is observed from cash flow statement submitted by assessee before the AO during the assessment proceedings, that the assessee has also claimed that it had opening cash in hand of Rs. 5,52,650/- (pb/page 13) as on 01.04.2008 , while the assessee has only sources of income by way of interest income from FDR, SB A/c and interest income of minor children. The assessee has claimed that cash deposited in bank accounts were also partly from above cash in hand to the tune of Rs. 5,52,650/- . There is no evidence on record that the said cash in hand was declared to Revenue in preceding assessment year and/or the said opening cash as on 01.04.2008 was available with the assessee. There is no justification offered by assessee and also no known sources of income of the assessee are available on record which could justify such a huge cash in hand available to assessee as on 01.04.2008. We also reject this claim of the assessee that said cash in hand as on 01.04.2008 of Rs. 5,52,650/- was available to the assessee.Theassessee fails on this issue. We order accordingly.

6.2 So far as addition of Rs. 1,05,600/- on account of low household expenses is concerned, since we have already held that the assessee has not entered into agreement to sale dated 29.09.2008 for sale of its flat and no such cash advance of Rs. 24,00,000/- was received by assessee as advance against sale of flat, the claim of the assessee that Rs. 1,05,600/- was spent out of said cash advance of Rs. 24,00,000/- received as advance against sale of his flat also stood rejected. The assessee has shown an amount of Rs. 1,44,400/- towards household expenses. It is not controverted by assessee that he spent Rs. 1,17,447/- for studies of his children , and further he had also made foreign visit. The assessee family consist of assessee, his wife and two children. In our considered view based on facts and circumstances of the case and keeping in view social status of the assessee ( the assessee is holding FDR’s in bank of significant amounts , making investments in properties etc.), the household expenses estimated by AO to the tune of Rs. 2,50,000/- for year under consideration was quite reasonable and fair, also keeping in view that the assessee spent Rs. 1,17,447/- for studies of his children out of total estimated household expenses of Rs. 2.50 lacs and also made foreign visit during year under consideration, we uphold the addition of Rs. 1,05,600/- as was made by AO and later confirmed by ld. CIT(A) as in our considered view, the said addition is quite fair and reasonable . This issue is also decided against assessee and we hold that household expenses to the tune of Rs. 1,05,600/- were paid out of concealed income from undisclosed sources. We order accordingly.

6.3 So far as additions of Rs. 5,00,000/- made by AO with respect to FDR made out of Kotak Mahindra Bank, on 12.07.2008 being an unexplained investment , which stood confirmed by ld. CIT(A) to the tune of Rs. 2,00,000/- as unexplained investment in FDR, while addition of Rs. 3,00,000/- as was made by the AO stood deleted by ld. CIT(A). The ld. CIT(A) referred toaddition of Rs. 21,82,000/-confirmed by him and granted relief to assessee of Rs. 3,00,000/- claimed to be received by assessee on 10.07.2008 in cash and deposited in Kotak Mahindra bank on 12.07.2008 , being sourced out ofaddition of Rs. 21,82,000/- sustained by ld. CIT(A) w.r.t. cash deposited by assessee in his bank account . The ld. CIT(A) also upheld the additions to the tune of Rs. 1,76,800/- as unexplained investment in property, as the assessee has deposited cash of Rs. 1,00,000/- on 12.04.2008 and Rs. 76,800/- on 02.05.2008 , which as per ld. CIT(A) remained unexplained. The assessee has deposited following amounts in his bank account with Kotak Mahindra Bank up-till 17.10.2018, as under:

The total of above cash deposits comes to Rs. 27,76,800/-. The addition of Rs. 21,82,000/- on account of cash deposits in bank as concealed income from undisclosed sources, also stood confirmed by us, in preceding para’s of this order. We have already rejected the theory of entering into agreement to sale , dated 29.09.2008. We have also rejected the claim of the assessee that it had Rs. 5,52,650/- as opening cash in hand as on 01.04.2008 , as there is no evidence on record to justify the same. This leaves us with balance of Rs. 5,94,800/- and this cash deposit also remained unexplained as no justification is offered by assessee and/or the justification offered stood rejected by us. In our considered view, the ld. CIT(A) upheld additions to the tune of Rs. 3,76,000/- on account of unexplained FDR and unexplained investment in property, although cash deposit of Rs. 5,94,800/- still remained unexplained as detailed above, while addition sustained by ld. CIT(A) was to the tune of Rs.3,76,800/- on account of unexplained FDR and property. It is not shown to us that Revenue is aggrieved by theaforesaid decision of ld. CIT(A), and it could not be shown to us by rival parties that an cross appeal or CO is filed by Revenue. There were cash withdrawal as well deposit post 17.10.2008, which stood explained by corresponding cashwithdrawals from bank, and the same were also accepted by ld. CIT(A). Thus, under these circumstances, we are inclined to accept/confirm the additions as were confirmed/upheld by ld. CIT(A) on account of unexplained investment in FDR to the tune of Rs. 2,00,000/-and also addition to the tune of Rs. 1,76,800/- on account of unexplained investment in property. The assessee fails on this issue also. We order accordingly.

7. In the result, appeal filed by the assessee in ITA no. 544/Alld/2014 for ay:2009-10stand dismissed.

Order pronounced in the open court on 11/11/2021at Allahabadthrough virtual
Court through Video Conferencing