Sunil Mathur Vs ITO (ITAT Jaipur)
The issue under consideration relates to source of cash deposits during the year in the two bank accounts maintained by the assessee amounting to Rs 13.5 lacs. In this regard, firstly, it is noted that during the year under consideration, the assessee has sold a property and consideration thereof amounting to Rs 43.50 lacs has been received through banking channels and there is no allegation by the AO in terms of any on-money received by the assessee in cash over and above the declared sale consideration. It has been explained by the assessee that the source of cash deposits during the year is out of earlier two years withdrawals and cash in hand at the beginning of the year. In support of his contention, the assessee has submitted cash book and cash flow statement for previous two financial years depicting the individual transactions of receipts and payments/withdrawals. We have gone through these cash flow statements and find that the assessee has sufficiently explained the source of deposits in form of salary and other retirement benefits which have been duly declared and withdrawals towards household expenses which are partly funded by him and partly by his wife and therefore, availability of cash in hand at the beginning of the year has been sufficiently explained. In the result, considering the entirety of facts and circumstances of the present case, we hereby direct the Assessing officer to delete the addition so made in the hands of the assessee towards unexplained cash deposits and ground no. 2 of assessee’s appeal is allowed.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This is an appeal filed by the assessee against the order of ld. CIT(A), Kota dated 06.03.2019 wherein the assessee has taken the following grounds of appeal :-
“1.1 The impugned additions and disallowances made in the order u/s 143(3)/147 dated 31.08.2016 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted.
1.2 The very action taken u/s 147 r/w 148 is bad in law without jurisdiction and being void-ab-initio, the same kindly be quashed. Consequently the impugned assessment framed u/s 143(3)/147 dated 31.08.2016 also kindly be quashed.
2. Rs. 13,50,000/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the impugned addition made by the AO on the account of the cash deposits of Rs. 13,50,000/- in the bank account under the head of. The addition so made and confirmed being contrary to the provisions of law and facts kindly be deleted in full. ”
2. During the course of hearing, the ld A/R submitted that the relevant facts in brief are that the assessee filled ROI on 05.07.2014 declaring total income of Rs. 2,05,080/-, consisting of income from Salary from Punjab Kesri, Rental Income from House Property, and Fee receipts and advertising commission and interest from S.B. A/c. During the assessment proceeding, the AO noticed that assessee has deposited cash of Rs.13,50,000/- in his saving account (i.e. Rs.10,00,000/- in SBI A/c and Rs.3,50,000/- in Punjab National Bank) as tabulated at Pg-2 of the impugned assessment order. When asked, the assessee submitted that the same was sourced out of the past savings of the preceding years` withdrawals from the same very accounts. In support, he submitted Bank Books i.e State Bank of India A/c No. 10927256219, State Bank of Bikaner & Jaipur A/c No. 6116128932 and Punjab National Bank A/c No. 07260000300264723. Similarly, the assessee submitted Cash Book / Cash Flow Statement (“CFS”) for three years i.e. A.Y. 2012-13 to 2014-15. The AO however, rejected the contention stating that no cash were withdrawn from Bank account nor received from any person during the current year. The opening Bank Balance was low. He further observed that if the assessee was really having cash balance as shown in his hand, he would have deposited the same in the bank. Hence, the assessee failed to establish the amount as shown in the cash book and concluded that the amount so withdrawn in earlier might have been utilized for households or in other expenses. Finally, he added the amount of Rs.13,50,000/-deposited in cash as income from other sources and on appeal, the same was confirmed by the ld CIT(A).
3. It was submitted by the ld A/R that the ld. AO is completely silent so far as the cash book for the A.Y. 2012-13, 2013-14 and 2014-15 (F.Y. 2011-12 to 2013-14), admittedly, submitted before the AO during the assessment proceedings however, there appears no judicious consideration of the same. Though he expressed some doubts as regard the cash availability based on the cash book that assessee might have utilized the cash but he did not at all rejected/doubted the correctness of the cash book and therefore, such an evidence produced before him was binding upon him. Since the assessee is a salaried class person hence was not required to prepare books of account but to support of its contention of availability of sufficient fund of Rs.12,60,650/- (as on 01.04.2013) prior to the deposits, he submitted cash book before the AO itself. It was submitted that in the non-business cases, submission and consideration of the cash book / cash flow statements to explain the source is not uncommon and even the Hon’ble Courts and Tribunals have taken cognizance and rather accepted such an evidence and explanation based thereon is valid. Therefore, the AO could not have blindly ignored such cash book unless he could reject the same based on the contrary material to support. The said cash book shows opening cash in hand of Rs. 5,43,750/- as on 01.04.2012. The assessee fully explained and established the source of this opening cash in Para-4 of his written submissions before the ld. CIT(A) reproduced at Pg-3 of his order and also reproduced hereunder:
“4. The Appellant had taken voluntary retirement from the Dainik Navjyoti Printing Press Pvt. Ltd’, Ajmer on 31/ 01/ 2011 and had received retirement benefits (1) Gratuity Rs. 2,60,377/- (2) PF Rs. 6,39,146/- (3) Pension Rs. 17,316/- Total Rs. 9,16,839/- and al l these sums were deposited in Bank Accounts and the receipt had been shown in computation of Income for A/ Y 2011-12 and were duly withdrawn from the Bank.”
4. After receiving total amount on retirement of Rs.9,16,839/- i.e. Gratuity Rs. 2,60,377/-was deposited in SBI A/c on 20.04.2011 and PF Rs. 6,39,146/- was deposited in PNB Bank on 24.12.2011 and there after cash withdrawal were made therefrom on various dates as per Cash Book. The amounts withdrawn in cash was partly utilized and partly available and the balance was shows opening cash in hand of Rs. 5,43,750/- as on 01.04.2012 and after recording further cash transactions of receipts / payments, the opening balance was of Rs.12,60,650/- as on 01.04.2013, relating to A.Y. 2014-15.
5. It was further submitted that both the lower authorities have completely ignored one important aspect and admitted fact that the assessee had sold a residential house no. 5-L-26, Mahaveer Nagar-III, Vistar Yojna, Kota on 23.10.2013 to Shri Pramod Kumar Dhakad for Rs.43.50 Lakhs and the entire consideration was received through cheque/RTGS in the bank account on different dates (i.e Rs.50,000/- on 06.07.2013, Rs.9,50,000/- on 11.07.2013, Rs.23,99,983/- and Rs.9,50,017/- on 22.10.2013). Though Rs.40 Lakhs were transferred yet 3.50 Lakh were still available. In addition, the assessee was also in cash receipts of Salary, Rental Income and Other income in the period of three years and were available till Jul-2013 and onwards. All bank transactions made in cash are fully reflected in the cash book together with the regular withdrawals on monthly basis towards household expenses. Thus, to the extent of such income received in three years was fully available (because the household expenses were shown in cash book met with by cash withdrawals). Notably, deposit of Rs.13.50 was met from cash drawings from bank only (See chart at w/s Pg-6). Still cash income of Rs.5-6 lakh for three years was available in addition.
6. It was further submitted that the cash book has been prepared taking into account all the transactions of cash deposits and cash withdrawal done in two banks i.e. SBI and PNB as also after reducing household expenditure of Rs.75,000/- during the year (which is quite justified and reasonable looking to the size of the family and there standard and habits). Even the AO also did not dispute the claimed amount of the household expenditure. This way, the assessee had sufficient cash balance on all the subjected dates of cash deposits. This is evident from the following table based on the cash book:
