2019 (2) TMI 225 - AT - Income Tax

Cash deposits in the bank account after withdrawing the some amount out of the same bank account - Held that - Revenue should prove, it was the assessee who spent the amount in question. Meaning thereby burden is upon by Revenue to prove that withdrawn amount by the assessee have been spent by assessee somewhere else. CIT(A) put a negative onus upon the assessee to prove that money withdrawn from the bank account of the family was not utilized. Since the explanation of assessee has been partly accepted by the AO that cash withdrawn from the same bank account in assessment year under appeal is available to assessee to make re-deposit in the same bank account, therefore, considering the facts of the case, details of record and in the light of decision in the case of Shiv Charan Dass (1980 (4) TMI 74 - PUNJAB AND HARYANA HIGH COURT), the amount withdrawn during the year from the same bank amount is available to assessee to make re-deposit in the same bank account in assessment year under appeal. Thus, the assessee would be entitled to the benefit of ₹ 5,79,100/-. Assessee claimed gifts of ₹ 5 lakhs from family member. The assessee filed affidavits and ITR of the 3 family members in which they have stated that amount of ₹ 2 lakhs, ₹ 2 lakhs and ₹ 1 lakh have been gifted to the assessee, however, no evidence of their creditworthiness have been produced before the authorities below. Mere filing of affidavits and ITR is not sufficient to prove creditworthiness of the donors. No reasons or occasion of gifts have been explained. No evidence of financial capacity of the donors and their source have been filed on record. Therefore, it appears that it was the unexplained amount of the assessee which assessee tried to explain through the alleged gifts. No interference is called for in the matter. Confirm the addition of ₹ 5 lakhs. No other source of balance amounts have been explained and is not supported by any evidence. Ld. Counsel for assessee also contended that assessee is working in UNO, therefore, no addition could be made against the assessee. Since, cash amount have been deposited in the bank account, therefore, Section 69 would apply against the assessee. It is a deeming provision and addition is made on account of unaccounted income of the assessee for which source is not explained. Therefore, whether assessee is working with UNO or not would not make out any case in favour of the assessee.

Summary

Issues:
Challenge against addition of ?12,97,300 in the assessment year 2010-11.

Analysis:
1. The appeal was against the addition of ?12,97,300 in the assessment year 2010-11. The assessee did not contest the reopening of the assessment, leading to the dismissal of Ground no. 1.

2. The case involved cash deposits and credit card bill payments. The Assessing Officer (AO) reopened the case under section 147 of the Act based on AIR data. The assessee provided explanations and submitted affidavits for cash gifts, but failed to provide the source of funds for the gifts.

3. The AO observed the withdrawal and deposit patterns in the bank account, raising concerns about unexplained cash deposits. The CIT(A) upheld the addition, suggesting possible personal use of withdrawn funds.

4. The assessee argued for the deletion of the addition, emphasizing cash withdrawals and re-deposits from the same bank account. The CIT(A) maintained the addition due to lack of evidence on the donors' creditworthiness and the purpose of gifts.

5. The Tribunal considered the burden of proof on the Revenue to show the actual spending of the withdrawn amount. It allowed the benefit of ?5,79,100 based on the re-deposited funds from the same bank account.

6. The Tribunal also highlighted the insufficiency of evidence regarding the gifts, citing relevant case laws. It confirmed the addition of ?5 lakhs, emphasizing the unexplained nature of the amount.

7. The Tribunal addressed the argument of the assessee's employment with UNO, stating that Section 69 applies to unaccounted income regardless of the source. The final decision modified the addition to ?5,79,100, deleting this portion and confirming the rest.

In conclusion, the Tribunal partially allowed the appeal, setting aside the addition of ?5,79,100 while confirming the remaining amount. The decision was based on the burden of proof, lack of evidence on gift sources, and application of Section 69 for unexplained income.