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2017 (3) TMI 1253 - HC - Income TaxUnexplained cash deposit - Held that - Tribunal has upheld the finding recorded by CIT(A) with regard to cash deposit to the tune of ₹ 14,20,212/- as unexplained. It has been categorically recorded by the Tribunal that out of the 33 withdrawals, only two withdrawals of ₹ 2 lacs each from Bank of Rajasthan and ICICI Bank were made in cash. The rest were all withdrawals by cheque small amounts made mostly by an employee of the assessee. Similarly, in many cases, small amounts were withdrawn two or three times on a single day by different persons. Further, the deposits in Bank were made after a gap of two-three instances of withdrawals. Taking the totality of facts and circumstances of the case, the Tribunal concurred with the findings recorded by the CIT(A) that the withdrawals were for the purpose of business and not available for redeposit. Further, the withdrawals were re-deposited after a gap of two or three months which was not probable. Thus, the assessee was not able to link the cash withdrawn from the bank with the cash deposit. Consequently, the finding of the CIT(A) with regard to treating the cash deposit of ₹ 14,20,212/- as unexplained income of the assessee was correctly upheld by the Tribunal. Thus, the appeal of the assessee dismissed.
Issues:
1. Addition of ?14,20,212 as unexplained income. 2. Justification of the Tribunal's decision. 3. Shift of onus for proving utilization of the sum. 4. Upholding addition under sections 68/69A of the Income Tax Act. Analysis: Issue 1: Addition of ?14,20,212 as unexplained income The appellant-assessee appealed against the Tribunal's order upholding the addition of ?14,20,212 as unexplained income for the assessment year 2007-08. The CIT(A) had accepted ?27 lakhs deposited by the assessee but rejected the balance amount, stating that ?14,20,212 was deposited after a gap of 2-3 months and hence not available for redeposit. The Tribunal concurred with the CIT(A) that the withdrawals were for business purposes and not available for redeposit, as they were re-deposited after a considerable gap. The Tribunal upheld the finding that the cash deposit of ?14,20,212 was unexplained income, leading to the dismissal of the appeal by the assessee. Issue 2: Justification of the Tribunal's decision The Tribunal, after examining the evidence, upheld the CIT(A)'s finding regarding the unexplained cash deposit of ?14,20,212. The Tribunal noted that most withdrawals were made by cheque, with only two cash withdrawals of ?2 lakhs each. It was observed that withdrawals were often small amounts made by an employee and deposited back after a gap, making it improbable to link the cash withdrawn with the deposit. The Tribunal agreed with the CIT(A) that the withdrawals were for business purposes and not available for redeposit, leading to the affirmation of treating the cash deposit as unexplained income. Issue 3: Shift of onus for proving utilization of the sum The appellant raised a question regarding the onus of proving the utilization of the sum of ?14,20,212, questioning whether it should be on the Tribunal or the department. However, the Tribunal's decision was based on the lack of linkage between the cash withdrawn and deposited, concluding that the appellant failed to establish a connection. Therefore, the onus of proof was not a determining factor in this case. Issue 4: Upholding addition under sections 68/69A of the Income Tax Act The CIT(A) upheld the addition of ?14,20,212 under sections 68/69A of the Income Tax Act, considering the unexplained sources of income. The Tribunal concurred with this decision, emphasizing the lack of clarity in the cash flow statement and the inability to establish a direct link between withdrawals and deposits. The Tribunal dismissed the appeal filed by the assessee, as the findings were considered pure facts and not shown to be illegal or perverse, leading to the dismissal of the appeal on merits. In conclusion, the High Court dismissed the appeal by the appellant-assessee, as no substantial question of law arose from the Tribunal's decision, and the findings were upheld as factual and legally sound.
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