2022 (9) TMI 1493 - AT - Income Tax

Unexplained cash deposits in the bank account - unexplained money u/s 69A - rejecting the explanation and evidences filed by the assessee - addition made invoking provisions of Section 115BBE - HELD THAT - As decided in Shri Mathew Philip case 2019 (11) TMI 1404 - ITAT COCHIN cash withdrawals from bank account continues remains as cash balance with the assessee even for many month and for sometimes cash withdrawn is utilized on the same day. All these probable aspect of the matter cannot be simply ignored or brushed aside but the facts remains that the factum of cash withdrawn from bank is not at all disputed. It is not a case of the AO that the amount withdrawn from bank account was utilized or deposited somewhere else, it was CIT(A) who improvised the stand of revenue by taking into consideration. The amounts contemplated by the assessee to the family to meet routine expenses. As explained by the assessee before ld. CIT(A) that the family size of assessee s is 10 comprising assessee, his wife, two sons and two daughters-in-law and four grandchildren. In this situation when the son of assessee is doing construction business and other sons and both the daughters-in-law are also earning then the contribution of assessee Rs.20,000/- per month for household expenses and other expenses cannot be held as in sufficient and the ld. CIT(A) cannot allowed to make a new case as an appellate stage. Unless and until, revenue authorities bring on record positive or adverse material to establish that the amount withdrawn by the assessee from his bank account was utilized or deposited somewhere else and the impugned amount of cash deposited was not the same which was withdrawn by the assessee from his bank account. The addition u/s 69A of the Act would not survive and thus, cannot be held as sustainable on the touch stone of principles of tax jurisprudence. The main allegation leveled by the ld. CIT(A) that it is a highly, unlikely someone huge cash for so long is not tenable and sustainable - Decided in favour of assessee.

Summary

Issues:
1. Addition of Rs. 7,30,000 on account of cash deposits in bank accounts.
2. Application of provisions of section 115BBE of the Act.

Analysis:

Issue 1: Addition of Rs. 7,30,000 on account of cash deposits in bank accounts:
The appeal was filed against the order of the National Faceless Appeal Centre (NFAC) regarding the addition of Rs. 7,30,000 on account of cash deposits in bank accounts. The Authorized Representative (AR) argued that the addition was confirmed based on an incorrect interpretation of facts and figures provided by the assessee. The AR highlighted that the authorities erred in rejecting the explanations and evidences filed by the assessee and in invoking Section 115BBE of the Act retrospectively. The AR also emphasized that the family members' earnings could contribute to meeting routine and special expenses. The Co-ordinate Bench of ITAT Cochin's order in a similar case was cited to support the argument that cash withdrawals remaining idle for some time is plausible, and unless evidence shows otherwise, additions under section 69A of the Act are not sustainable. The tribunal observed that the cash withdrawals were not disputed, and the addition was deleted based on the principles of tax jurisprudence. The tribunal found the CIT(A)'s argument regarding keeping huge cash idle for a long time untenable and allowed the appeal, directing the deletion of the addition.

Issue 2: Application of provisions of section 115BBE of the Act:
The authorities had levied tax by invoking the provisions of section 115BBE of the Act. The AR argued that these provisions could not be applied retrospectively to the relevant assessment year. However, the DR supported the authorities' orders, stating that a person like the assessee, a bank manager, would not keep a significant cash amount idle for an extended period. The tribunal noted that the main grievance of the authorities was that the cash deposits were unexplained, leading to their addition as unexplained money under section 69A of the Act. Citing a Co-ordinate Bench's decision, the tribunal emphasized that cash withdrawals remaining idle for some time is a plausible scenario and unless evidence proves otherwise, such additions are not sustainable. The tribunal found the CIT(A)'s argument regarding keeping significant cash idle for a long time untenable and directed the deletion of the addition. The tribunal allowed the appeal, emphasizing the need for positive or adverse material to establish that the withdrawn amount was not the same as the deposited amount.

In conclusion, the tribunal allowed the appeal, directing the deletion of the addition of Rs. 7,30,000 on account of cash deposits in bank accounts and highlighting the need for concrete evidence to support additions under section 69A of the Act.