2022 (3) TMI 73 - AT - Income Tax

Unexplained cash deposits u/s 68 - assessee deposited cash in his bank account on various dates - HELD THAT - We find that the assessee deposited cash in his bank account on various dates. The assessee has placed on record 'Cash balance summary' alongwith cash book extract, average cash balance and bank statement. A perusal on these documents would adequately prove that the assessee is a man of means - AO found any deficiency in the cash book maintained and produced by the assessee. Merely on surmises and conjectures, assessing officer brushed aside the books of accounts produced by assessee. Therefore, in our opinion, the authorities below were not justified in making the addition. The documents on record that the assessee's late brother Shri Dilipkumar Amichand was a man of worth. Shri Dilipkumar Amichand redeemed his investment in Reliance Mutual Funds to the extent of ₹ 63,28,380/-. The assessee has, in the paper book produced copy of invoice issued in the name of M/s. Dilipkumar Amichand Kothari by Flax Investment Services Pvt. Ltd. for sale of gold bar (owned by Shri Dilipkumar Amichand). Further, from the order of Ld. CIT(A), it transpires that the Ld. CIT(A) had called for remand report from the assessing officer. But the assessing officer did not file any remand report. Therefore, it was not fair on the part of the Ld. CIT(A) to decide the issue against the assessee as all the material evidence that needed for his decision were filed before him and the assessing officer had an opportunity to put on his say on the matter. For these reasons, we do not see any merit in the findings recorded by the Ld. CIT(A). Therefore, we reverse the orders of authorities below on this issue and hereby delete the addition. Assessee appeal allowed.

Summary

Issues:
1. Unexplained cash deposits under section 68 of the Act.
2. Addition claimed to be inherited from deceased brother in the form of silver and gold.

Analysis:

Issue 1: Unexplained cash deposits under section 68 of the Act
The appeal was filed against the order passed by the Commissioner of Income-tax (Appeals) regarding unexplained cash deposits in the assessee's bank account. The assessing officer held the deposits as unexplained under section 68 of the Act. The Ld. CIT(A) remanded the issue to the assessing officer for a remand report, but as no report was provided, the Ld. CIT(A) decided the issue on merits, finding that the source of cash was not explained. On appeal, the counsel for the assessee presented documents showing sufficient funds from the estate of the deceased brother to invest in the bank account. The Tribunal found that the assessing officer did not find any deficiency in the cash book maintained by the assessee and made the addition based on surmises and conjectures. Hence, the Tribunal held that the authorities below were not justified in making the addition, and the grounds of the assessee were allowed.

Issue 2: Addition claimed to be inherited from deceased brother in the form of silver and gold
Regarding the addition claimed to be inherited from the deceased brother, the assessing officer found discrepancies in the claim and doubted the creditworthiness of the deceased brother. The Ld. CIT(A) upheld the addition, but the Tribunal observed that the late brother had substantial investments and assets, as evidenced by documents provided by the assessee. The Tribunal noted that the assessing officer did not file a remand report despite being given the opportunity. Therefore, the Tribunal found no merit in the Ld. CIT(A)'s findings and reversed the orders of the authorities below, deleting the addition. Consequently, both grounds of the assessee were allowed, and the appeal was allowed in favor of the assessee.

In conclusion, the Tribunal ruled in favor of the assessee on both issues, highlighting the importance of providing sufficient evidence to substantiate claims and the necessity for assessing officers to base decisions on concrete evidence rather than conjectures.