2018 (6) TMI 1816 - AT - Income Tax

Unexplained cash deposits - HELD THAT - CIT (Appeals) has proceeded on this basis that the entry regarding withdrawal is by way of clearing of cheque but when examined the bank statement available in the Paper Book, find that the clearing of cheque is mentioned by the bank against the entry of deposit of same amount and against withdrawal the narration given is by self . It comes out that there is cash withdrawal of Rs.25.85 lakhs on 10.01.2011 and the deposit of cash in the bank account of Rs.10.01 lakhs is on 13.01.2011 and therefore, in my considered opinion, the source of deposit stands explained. Hence this addition is deleted. Cash deposit in bank account - addition was made by the AO on this basis that this amount was received from the father-in-law and the assessee has not produced any evidence and therefore, the addition was made by the Assessing Officer - HELD THAT - This is not the case of AO or CIT (Appeals) that this cash received from Ms. Swati is used by the assessee for some other investment or for some other cash deposit in bank account. In the absence of any such allegation, the source of Rs.2 lakhs stands explained and hence,delete this addition. This decision is further supported by these facts that as per the entry in the bank statement there is a deposit of cheque of Rs.2 lakhs on 15.2.2011 and there is reversal of such entry on the same date on this basis that cheque returned because of insufficient funds and assessee's submission is this that cheque of Rs.2 lakhs was received from Ms. Swati and it was deposited and the same was dishonored and cash was received against such dishonor of cheque. Accordingly Ground Nos.5, 6 7 are also allowed.

Summary

Issues:
1. Appeal against the order of Learned Commissioner of Income Tax (Appeals)-3, Bangalore for the Assessment Year 2011-12.
2. Clarification on cash withdrawals and deposits from bank statements.
3. Source explanation for cash deposits in bank accounts.
4. Disputed cash deposits and their sources.

Analysis:
1. The appeal was filed against the order of the Learned Commissioner of Income Tax (Appeals)-3, Bangalore for the Assessment Year 2011-12. The grounds raised by the assessee were considered, and it was noted that some grounds were general in nature and did not require separate adjudication.

2. The issue of cash withdrawals and deposits from bank statements was discussed. The Authorized Representative pointed out discrepancies in the bank statement entries, clarifying that certain withdrawals were made by cash and not through clearing. The Tribunal examined the bank statements and found that the source of certain cash deposits was explained by corresponding cash withdrawals from different accounts. Consequently, certain additions made by the Assessing Officer were deleted.

3. The Tribunal further analyzed the source explanation for cash deposits in bank accounts. The Authorized Representative provided evidence that cash deposits were made from cash received from specific individuals. The Tribunal considered the evidence presented and the explanations provided, leading to the deletion of certain additions made by the Assessing Officer.

4. Lastly, the Tribunal reviewed disputed cash deposits and their sources. The Authorized Representative clarified that certain cash deposits were made from cash received from specific individuals, which was accepted by the Assessing Officer in the assessment order. The Tribunal found that the source of these cash deposits was adequately explained and supported by evidence, resulting in the deletion of additional amounts added by the Assessing Officer.

In conclusion, the appeal of the assessee was allowed based on the detailed analysis of the issues related to cash withdrawals, deposits, and their respective sources as presented and supported by the Authorized Representative.