ACIT Vs Dr. Anil Kumar Verma (ITAT Agra)
The issue under consideration is whether the addition made u/s 69 by AO due to undisclosed sources of cash deposits in bank account is justified in law?
ITAT states that, the Assessing Officer in the remand report had confirmed that the amount deposited in the bank were found duly recorded in the cash book. The Revenue before us during the course of arguments and also in the written submissions have not disputed the correctness of the cashbook. Further, it was also not the case of the Assessing Officer that the cash book maintained by the assessee was incorrect. In view of the above, once the assessee was able to explain the source of deposits in the bank based on the cash book, which were admittedly not disputed and rejected by the AO, therefore, no addition on the basis of the bank deposit can be made out and accordingly, the ground raised by the Revenue is liable to be dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
Present appeal and cross objection are being filed by the Revenue and the assessee, feeling aggrieved by the order of the ld. CIT(A)-II, Agra for the assessment year 2009-10. The following grounds have been raised by the Revenue in ITA No.274/Agr/2013:
“1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.62,13,500/- out of addition of Rs.63,63,500/- made by AO on account of cash Deposit in bank accounts without appreciating the facts of the case that the assessee has introduced cash amounting to Rs.31 lacs in the cash book on different dates from “cash in safe” and the assessee has shown professional receipts of only Rs.1 8,22,680/-and interest income of Rs. 6,06,073/- for the A. Y. 2009-10.
2. The Id. CIT (A) has erred In law and on facts In glossing over the fact that the assessee never produced any sundry creditor before the AO as desired by the latter and never furnished copies of ITR and bank statements of the sundry creditors, thus the addition of Rs.63,63,500/-
3. The Id, CIT(A) has erred in law and on facts in restricting the addition of Rs.5,98,306/- to Rs.46,794/- u/s 36(l) (iii) of the Act without properly appreciating the facts of the case that the assessee has also vested his capital in Sai Om Developers, Bajaj Alianz, FDR, shares in Sahara etc and, therefore, it cannot be concluded that the donation of 93,67,242/- was given out of the assessee’s capital and not from his borrowed funds.
4. The Id. CIT(A) has erred in law and on facts in deleting the addition of 85,000/- on account of unexplained investment made in purchase of car without properly appreciating the facts of case that the assessee did not contradict the statement given by him during the course of the survey conducted when the amount was surrendered and it was only towards the fag end left for completion of the assessment that an affidavit was filed bythe assessee denying investment.
5. The order of Id CIT(A) being erroneous in laws and on facts deserves to be quashed andthat the order of AO to be restored.
6. The appellant craves leave to add or alter any or more ground or grounds of appeal as may be deemed fit at time of hearing of appeal.”
2. The grounds raised by the assessee in the cross objection read as under:
“1) That the learned CIT(A) has erred in law and on facts of the case in affirming addition of Rs.1,50,000/- in respect of cash deposit in the SB account of Mrs. Renu Verma , who is independent Income Tax Assessee.
2) That the learned CIT(A) has erred in law and on facts of the case in affirming addition of Rs.1,50,0007- in the account of Loan received by account payee cheque on 21-04-2008, wrongly entered in the account of Mr. Bharat Bansal.
3) That the learned CIT(A) has erred in law and on facts of the case in affirming addition of Rs.46,794/- U/S 36(l)(iii) in respect interest paid to Syndicate Bank.
4) That the learned C1T(A) has erred in law and on facts of the case in affirming addition of Rs.92,626/- in respect of interest paid to Barklay Finance with out deduction of TDS u/s 40(a) (i a).
5) That the departmental appeal is bad in law as well as on facts and is liable to be dismissed.
6) For the reasons discussed above and to be argued at the time of hearing , respondent pray for relief.
7) The respondent craves leave to add or amend any ground of cross objection.”
Assessee submission
ITA No. 274/Aera/2012
1. First Ground relates to deletion of Rs. 62,13,500.00 out of total addition of Rs. 63,63,500.00 made by the learned AO, the learned AO totaled the cash deposits in various 7 bank accounts at Rs. 63,63,500.00 and added the same in the income of the assessee. The main argument of the AO while adding these amount is that assessee has shown the total medical receipts amounting to Rs. 18,22,680/- and after deducting the expenses according to him the net profit comes to Rs. 6,33,343/- and that these deposits cannot be made out of the income of the year, hence these amounts were deposited was income from undisclosed source.
2. The ld. DR for the Revenue had submitted that the order passed by the ld. CIT is required to be interfered as the source of deposit were not explained by the assessee before the AO/CIT.
3. The ld. DR had filed the written submissions and flow chart in this regard and in the said flow chart it was submitted as under :
