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TMI Blog2016 (11) TMI 1685X X X X Extracts X X X X X X X X Extracts X X X X ..... EME COURT] has held that the AO cannot complete the assessment purely on guess and without any reference to evidence or any material at all. Also in the case of Umacharan Shaw Brothers [ 1959 (5) TMI 11 - SUPREME COURT] has held that AO cannot complete the assessment merely on suspicion which cannot take the place of proof in these matters. Thus we hold that the AO made the assessment merely on suspicion and without bringing any cogent material on record to establish that assessee cannot keep the cash in his hand being a NRI. Accordingly, we uphold the order of the CIT(A) in deleting the addition - Decided against revenue. - ITA Nos. 1727/Hyd/2014 - - - Dated:- 11-11-2016 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Revenue : Shri K.J. Rao. For the Assessee : Shri A.V. Raghuram. ORDER Per S. Rifaur Rahman, A.M.: This appeal filed by the revenue is directed against the order of CIT(A)-V, Hyderabad, dated 14/07/2014 for AY 2010-11. 2. Briefly the facts of the case are that the assessee filed his return of income for the AY 2010-11 on 22/07/2010 declaring total income of ₹ 2,96,450/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablish the nexus between the Cash withdrawn during the Financial Year 2007-08 and the cash deposited during the Financial year 2009-10. The assessee has failed to produce any evidence in support of his argument to prove that the cash deposited in the bank is the same which is withdrawn from Bank account during the financial year 2007-08. (iv) It is unusual that any person will keep amount of more than 50 lakhs ideally loosing significant interest for a period of more than one and a half year. (v) Under the present condition of law and order, it is impossible to keep cash of more than ₹ 50 Lakhs for a period of more than one and a half year in view of high risk of theft. 2.2 In view of the above observations, the AO held that sources for cash deposits were not the cash withdrawals of the last before year as explained by the assessee, it was an afterthought to hide the original sources for the cash deposits and added ₹ 34.70 lakhs as unexplained cash credits u/s 68 of the Act. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) against the addition made u/s 68 of the Act. 4.1 During the appeal proceedings, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take the place of proof In the case of CIT V Anupam Kapoor (166 Taxmann 178 H C Pun. Haryana), The Hon 'ble High Court took the same view as decided by Supreme Court in Umacharan Shaw Bros case and applied the same. It was also held that the addition cannot be made merely on the basis of conjuncture and surmises. In the case of Dhakeswari Cotton Mills Ltd V CIT 26 ITR 775(SC), The Hon'ble supreme Court made an observation that the Assessing officer is not entitled to make a pure Guess and make an assessment without reference to any evidence or any material at all. The Delhi Bench of ITAT in Sanjeev Kapoor Case: ITA 2091/De1/2010 dated 29-10-2010 Held It is bit unusual that aperson withdraws cash from Bank in Installments and redeposit the same into Bank without using the cash but still in the absence of any evidence regarding any other use of cash by the assessee, it can not be alleged that such cash was used by the assessee for some other purposes and it was not available with the assessee on the date when the assessee deposited the cash into Bank. There is no evidence brought on record by Ld A 0 in this regard. The facts in the case of Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd Vs. CIT (26 ITR 775) (SC) (iv) Delhi Bench of ITAT in Sanjeev Kapoor Case: ITA No.209l/Del/20l0 dated 29-10-2010 (v) Asst. CIT Vs Baldev Raj Charla Others (121 TTJ, 0366) 4.6 I have carefully considered the case-laws cited by the assessee and hold that the same are squarely applicable to the facts of the case. All the above Hon'ble Courts have held that the addition u/s 68 cannot be made merely on suspicion. In the case of the assessee, the A.O. neither brought on record any evidence to establish that the cash withdrawals were spent for some other purpose and that such cash was not available with the assessee as on the date of depositing the same into his Savings Bank Accounts. The AO has also failed to bring on record any evidence to show that the explanations of the assessee were incorrect. Hence, the observations of the A.O. in the assessment order in Para (2) (i) to (v) were devoid of any merit, reasoning and cannot be accepted. 4.7 In view of my above observations, both on facts and in law, I hold that the addition of ₹ 34,70,000 made on mere suspicion cannot be sustained, and hence, delete the addition. 6. Aggrieved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing officer has not brought any evidence on record that the cash withdrawn from the bank was not available to make deposits in the bank accounts. (viii) Any other ground that may be urged at the time of hearing. 7. Ld. DR submitted that the assessee is a NRI deposited cash in ICICI Bank to the extent of ₹ 34.70 lakhs on various dates during the current AY. The contention of the assessee cannot be accepted as the assessee could not have kept so much of cash in hand for the last two years. He has shown proof of withdrawal during the AY 2008- 09 but being a NRI, it is not possible for him to carry so much of cash for last two years in India. He submitted that CIT(A) has wrongly deleted the addition citing this as the addition was made on suspicion whereas the AO has clearly brought on record the circumstances which led to such addition. He relied on the order of AO. 8., Ld. AR agreed that the assessee is a NRI from AY 2008-09 onwards. He brought to our knowledge that in the earlier hearing of this case, the bench has a query that being a NRI, how the assessee operated the bank and details of stay in India during this 3 years under consideration. Subsequent to thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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