2015 (3) TMI 396 - AT - Income Tax

Unaccounted cash deposits in Bank on various dates - addition u/s 68 deleted by CIT(A) - Held that - The impugned cash deposits have been made out of the funds withdrawn in the preceding years and hence, we are in agreement with the conclusion drawn by the CIT(A) that assessee s stand on this issue has been proved by positive evidences. Per contra, the AO has not brought out any material or evidence in spite of search operation at the residential premises of the assessee to dismiss assessee s claim/stand that the assessee actually has such funds available at the time of subsequent cash deposits. We are also inclined to hold that the CIT(A) was quite justified in reaching to a conclusion that the assessee has discharged its onus incumbent upon him u/s 68 of the Act by submitting supportive and reliable evidence and explanation viz. same bank pass book etc. Therefore, the addition u/s 68 of the Act was not sustainable. - Decided against revenue. Addition on figures scribbled on loose slips, found and seized during the course of search - CIT(A) deleted addition - Held that - the substantive addition was made in the hands of Smt. Avinash Monga and in the assessee s case, there was merely a protective addition. We further note that the CIT(A)-XXX, New Delhi, after detailed deliberations found that the substantive addition is not sustainable and both the additions of ₹ 12,72,707/- and ₹ 91,870 except addition to the extent of ₹ 10,000 were deleted. We are also in agreement with the conclusion of the CIT(A) in the impugned order that whatever undisclosed income had to be taxed based on these loose papers, has been taxed in the hands of assessee s wife Smt. Avinash Monga substantively and as the rest of substantive addition has been deleted, then there is no ground to uphold the protective addition in the hands of present assessee Shri Suresh Monga. Finally, under above noted facts and circumstances, we reach to a logical conclusion that the CIT(A) was right in granting relief for the assessee and deleting the protective addition. - Decided against revenue.

Issues Involved:
1. Admissibility of additional ground raised by the Revenue.
2. Deletion of addition of Rs. 6,08,000 on account of cash deposits in the bank.
3. Deletion of addition of Rs. 12,72,707 and Rs. 91,817 based on figures found on loose slips during the search.

Issue-wise Detailed Analysis:

1. Admissibility of Additional Ground Raised by the Revenue:
The Tribunal considered the arguments from both sides regarding the admissibility of the additional ground. The Revenue argued that the additional ground was necessary for proper adjudication, as it pertained to a mixed question of law and fact. The assessee initially objected but later conceded that if deemed just, the additional ground could be adjudicated on merits. The Tribunal admitted the additional ground for adjudication, noting its necessity for a comprehensive resolution of the Revenue's grievance.

2. Deletion of Addition of Rs. 6,08,000 on Account of Cash Deposits in the Bank:
The Revenue challenged the deletion of Rs. 6,08,000, arguing that the assessee failed to provide evidence supporting the claim of receiving loans from Shri Gyan Gupta. The CIT(A) had deleted the addition, reasoning that the bank account showed withdrawals prior to the deposits, indicating the availability of funds. The CIT(A) relied on the principle from CIT vs Durga Prasad More (1971) 82 ITR 540 (SC), which states that the apparent must be considered real unless proven otherwise. The Tribunal upheld the CIT(A)'s decision, agreeing that the assessee had provided sufficient evidence to correlate the deposits with earlier withdrawals and that the Revenue had not disproved the assessee's claim.

3. Deletion of Addition of Rs. 12,72,707 and Rs. 91,817 Based on Figures Found on Loose Slips During the Search:
The Revenue contended that the CIT(A) erred in deleting the addition of Rs. 12,72,707 and Rs. 91,817, which were based on figures found on loose slips during a search. The CIT(A) had deleted these additions, noting that the substantive addition for the same amount had been made in the hands of the assessee's wife, Smt. Avinash Monga, and that the Tribunal had upheld the deletion of these additions in her case. The Tribunal observed that the figures on the slips were not corroborated with actual assets or evidence and were deemed "dumb documents." The Tribunal affirmed the CIT(A)'s decision, noting that the protective addition in the assessee's case could not stand once substantive addition in the wife's case was deleted.

Cross Objection of the Assessee:
The assessee raised a cross-objection regarding the loan amount of Rs. 6 lakhs being treated as unexplained cash credit under Section 68. However, since the Tribunal dismissed the Revenue's main ground on this issue, the cross-objection became infructuous and was dismissed.

Conclusion:
The Tribunal dismissed both the Revenue's appeal and the assessee's cross-objection, upholding the CIT(A)'s order in favor of the assessee. The Tribunal's decision was based on the lack of substantive evidence from the Revenue and the proper discharge of onus by the assessee regarding the cash deposits and figures on loose slips. The order was pronounced in the open court on 23.2.2015.

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