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TMI Blog2019 (12) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... ank account are out of cash in hand available with the said company. AO did accept that the bank opened in pertained to M/s. Orthonovo Joint Trauma Hospital Pvt. Ltd. On careful consideration of facts, we are of the view that cash deposits in bank account are out of cash in hand belonging to M/s. Orthonovo Joint Trauma Hospital Pvt. Ltd. hence, source of cash deposits are duly explained and same pertained to the company as as the source of cash deposits are from cash in hand of the impugned company.in such circumstances, we are of the view that the AO was not justified in making addition without bringing on record to establish that there was no cash in hand balance was available with said company. Therefore, having not done so the AO cannot added the sum belonging to company. Therefore, we hold that the addition made by the AO and sustained by the CIT (A) by invoking section 69 is not tenable in law, hence, same is deleted. - Decided in favour of assessee. - I.T.A No.195/ASR/2018 - - - Dated:- 19-12-2019 - Shri N.K. Choudhry, Judicial Member And Shri O.P. Meena, Accountant Member For the Assessee : Shri Surinder Mahajan, CA Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited out of cash in hand of the company M/s. Orthonovo Joint Trauma Hospital Pvt. Ltd.a company in which the assessee and his wife Smt. Jasleen Kaur are majority shares holder. The said company had regular current account with Capital Local Area Bank, which was duly reflected in its balance sheet. The AO has observed that the perusal of cashbook of the company showed regular cash in hand because of cash receipts and itis deposited in the current account every second or third day. Therefore, the assessee was asked to show cause as to why cash deposits in his personal bank account should not be treated as unexplained. The assessee has explained thathe was advised by his Astrologer to insert his name in the bank account of the company. He approached his banker but they refused. Therefore, he opened the bank account in his own name to deposit cash in said bank account. The assessee is also stated that the saving bank account was incorporated in the books of the company and the cash was withdrawn in the month of March. However, the AO observed that the balance sheet of the company does not reflect this bank account as on 31. 03. 2011. The interest earned on the cash deposits was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO has invoked section 68 by making addition on account of undisclosed cash deposit made into bank account of the assessee. Since the passbook maintained by the bank is not a books of accounts of the assessee. Therefore, the Ld. CIT(A) observed that the cash deposit in the bank account is upheld under section 69 of the Act. It was further submitted by the assessee that after having made an addition of ₹ 33, 71, 720 as cash credit under section 68 of the Act. The AO without prejudice to the assessment made by him propounded alternating theories considering the possibilities of higher judicial authorities. Such as an exercise by the AO is of no consequence. Nor it is within his powers to pre-empt the decision of the higher judicial authorities. Therefore, the CIT (A) has dismissed such observation made by the AO regarding possibility of invoking provisions of section 2(22)(e) or section 269SS or 271D and 271E. 6. Being, aggrieved the assessee filed this appeal before the Tribunal. Learned counsel submits that the addition is made on presumption and assumption. It was not the case of the AO that company was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 68 it cannot be taxed under section 69 of the Act nor can be brought to tax as deemed dividend u/s. 2(22)(e) of the Act.In the light of above submission, the learned Counsel submitted, the CIT (A) was not justified in sustaining the addition, when the AO was not certain under which head the addition should be made. Therefore, same may be quashed. 7. Per contra, learned CIT(D.R.) submitted decision in Kalayan Kumar Ray v. CIT [1991] 191 ITR 634 (SC) was given in the context of quantification of tax and interest thereon. In said case, the AO had not quantified interest chargeable to tax and made part of assessment order. Therefore, the Hon`ble Supreme Court held that has advised Department to incorporate such interest calculation in ITNS 65 form,Therefore, such decision is distinguishable on facts hence, not applicable to the assessee. It was further, submitted that as per section 292B of the Act the CIT (A) can rechristened the head of income. Therefore, substitution of section 69 in place of section 68 is well within the powers of the CIT (A). Further, the AO has rightly applied provisions of section 2(22) (e) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the light of the clear enunciation of the law in the aforementioned decisions of the Court, it is plain that as far as the present case is concerned, the AO was in error in proceedings on the basis that a sum of ₹ 20 0, 00,000 received by the Assessee was in the nature of a casual and non-recurring receipt which can be brought tax under section 10 (3) of the Act. Having held that it could not in the nature of capital gain, it was not open to the Revenue to seek to bring it a tax under the revenue receipt. There can be no manner of doubt that what is in the nature of capital receipt, cannot be brought to tax by resorting to Section 10 (3) read with section 56 of the Act. Therefore, Learned Counsel argued that when the cash deposits are taxed under section 68 it cannot be taxed under section 69 of the Act nor can be brought to tax as deemed dividend u/s. 2(22)(e) of the Act. 10. In the light of ratio laid down in above decision we hold that the CIT (A) was not justified in sustaining the addition, when the AO was not certain under which head the addition should be made. This means to the AO was some what agreed that cash depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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