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TMI Blog2018 (8) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 12,11,160/- and accordingly denies his liability to pay tax, surcharge and interest demanded thereon. ii. That on the facts as well as on law, Ld. AO erred in making addition of ₹ 2,68,000/- being cash paid for purchase of new car by treating it as undisclosed investment u/s 69 of the Income Tax Act, 1961. iii. That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in charging interest u/s 234B and 234C of the Income Tax Act, 1961. 2. Vide ground nos. 1 and 2, the grievance of the assessee relates to the confirmation of addition of ₹ 2,68,000/- made by the AO u/s 69 of the Income Tax Act, 1961 (hereinafter referred as to the Act). Facts of the case in brief are that the assessee filed the return of income on 24.3.2015 declaring an income of ₹ 9,43,160/-. Later on the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee purchased a new car from M/s Vardhman Cars Pvt. Ltd., and paid an amount of ₹ 10,8000/-. He asked the assessee to explain the total expenditure made on purchase of car and source thereof. The assessee submitted that he had pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 10,58,000/- 10,58,000/- 4. The AO observed that the information received from the company revealed that the assessee had paid a sum of ₹ 5,93,000/- while the assessee explained the total cash payment of ₹ 5,43,000/-. He, therefore, made the addition of ₹ 50,000/-. The AO also observed that the source of investment furnished by the assessee was as under;- Loan taken from SBI ₹ 4,50,000/- Through Credit Card ₹ 15,000/- Sale of old car to Shri Vijay Singh ₹ 2,25,000/- Cash Payment ₹ 5,43,000/- The AO asked the assessee to furnish complete address of the old car purchaser and after getting the address, he sent a letter through speed post which returned back unserved with the postal remarks i.e. incomplete address without part . He, therefore, added a sum of ₹ 2,25,000/-. 5. The AO also asked the assessee to furnish the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared total income of ₹ 9,43,160/- for the assessment year under consideration. His spouse Smt. Garima Sharma is also a salaried person and is an income tax assessee having PAN - ASCPM5888Q. Copy of ITR of both the appellant and his spouse are enclosed at Page no. 48-49 of the paper book. 4.l2 During the year under consideration both assessee and his spouse withdraw substantial cash from their bank accounts for purchase of Duster car. Copy of bank statements of appellant Sh. Vineet Sharma and his spouse Smt. Garima Sharma is enclosed at page no. 23-47 of the paper book. Summary of cash withdrawing during that period is as under: Period Amount of cash withdrawal by Sh. Vineet Sharma from: Amount of cash withdrawal by Smt. Garima Sharma from: HDFC Bank Standard Chartered Bank Citi Bank HDFC Bank From 01.04.2013 to 31.07.2013 ₹ 53,900/- ₹ 72,000/- 68,000/- ₹ 78,800/- From 01.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and hence addition of ₹ 268000/- made by the Ld. Assessing Officer is not correct. 4.18 In case of Baldev Charla 121 TTJ 366 ITAT Delhi has held that the explanation of the assessee cannot be rejected simply because there was a time gap, and hence addition confirmed by the Ld. Assessing Officer is not correct. 6.10. Is noteworthy to mention here that the investment for purchase of new car have been duly explained from bank withdrawals as discussed above and the same is genuine in view of facts that no prudent man will withdraw accounted cash from his bank account and convert it Into unaccounted/unexplalned/black money and simultaneously made investment from this unaccounted/unexplained/black money. To sum up 6.11 In case of P. K. Noorjahan the Honourable Supreme Court of India has held that, Section 69 of the Income Tax Act, 1961conferred only a discretion on the Income Tax Officer to deal with the investment as income of the assessee and that it did not make it mandatory on hii part to deal with the investment as income of the assessee as soon as the tatter's explanation happened to be rejected. The said discretion has to be exercised keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X
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