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TMI Blog2022 (1) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... planation, from her accounts with PNB Axis Bank, making it clear that the full facts in relation to the same have not been stated/clarified. No credit in its respect could thus be allowed. The assessee s explanation for the impugned cash deposit has in my view been therefore rightly regarded as unsatisfactory by the Revenue, finding her case as wholly unevidenced. Affidavit of the assessee s father (dated 10.10.2019), stating that no cash had been deposited (on 19.12.2016) in old currency, found false, could not be held against the assessee as he was not cross-examined - The said affidavit stood retracted on 14.10.2019, stating that some of it may have been in old currency. In this regard, even as observed during hearing, what value the said affidavit when it is an undisputed fact that cash (in old currency) at rs.2.47 lacs was deposited in bank on 19.12.2016, and toward which the assessee had in fact also furnished a disclosure on 07.02.2017 (PB pgs. 36-38). Nothing, thus, turns on the said affidavit, apart from speaking very poorly of the assessee s father, who issued the statement without confirming the facts. In fact, the affidavit being admittedly and materially inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 31/10/2019. 2. The appeal raises a single issue, i.e., the maintainability or otherwise in law of an addition in the sum of rs.2,47,000, being the cash deposited by the assessee in her bank account during the relevant previous year, on account of unsatisfactory explanation as to the nature and source thereof, i.e., in the facts and circumstances of the case. The Law 3. An explanation being a statement of fact/s and circumstance/s, the satisfactory or otherwise nature thereof is principally a matter of inference qua the truth of the explanation, drawn on a conspectus of the case, comprising the factual back ground of the case, i.e., the primary and secondary facts, admitted or proved. The same is to be, as per the law settled by the Apex Court, on the three parameters of identity and capacity (of the creditor or the source) and the genuineness of the transaction. The respective cases 4.1 In the facts of the case, the assessee, admittedly a student till a year ago, explained the cash deposit to be out of the cash available with her as at the beginning of the year (rs.1,97,500); that drawn from bank (rs.66,000) since, i.e., up to 08.11.2016, the date immedia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, on being show caused in the matter, was that she cannot be questioned as the Government had itself declared that cash deposit/s up to rs.2.50 lacs (during the demonization period) would be accepted without question. The explanation being now furnished is only on it being subsequently clarified that she was not covered by the said pronouncement as she had business income and, further, her total cash deposits during the demonetization period, at rs. 10.47 lacs, exceeded rs.2.50 lacs. Her entire case, thus, is an after-thought and, no wonder, unsubstantiated, based on self-serving statements. This sums up the Revenue s case. Discussion/Findings 5.1 My first observation in the matter is that the period 08.11.2016 to 31.12.2016, typically termed as the demonetization period , was a period of great anxiety in the society, particularly for the business community, as people were anxious to deposit their money (demonetized currency notes), now no longer legal tender, with the banks, which had been authorized to accept the same (as well as release new currency). This was as not so doing for which the period up to 31.12.2016 had been specified, would imply a total loss of thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attract any enquiry and, thus, perceived as safe. The holding of the balance cash, admittedly available in old currency notes (of lower denomination) as on 08/11/2016, i.e., rs.1.15 lacs, is again not comprehensible. One can understand a cash holding therein at rs. 10,000-15,000, particularly considering the non-spending or non-utilization thereof at any stage, so that the same gets explained only in relation to the quantum of the cash deposited, i.e., provides the reason for the same being kept just below the safe limit of rs. 2.50 lacs. Further still, the reason for cash accumulation by the assessee has been stated as for incurring expenditure on her impending wedding. The same again lacks credibility. Firstly, the same would at best explain the non-deposit of cash generated during the year (01.4.2016 onwards), and not of that available before that date (rs. 2 lacs), as she could not be attributed with prescience to know her wedding date at that time. What, one may ask, in any case prevented the assessee to deposit cash in bank, withdrawing it as and when, and to the extent, required. The same is also inconsistent with the withdrawal of cash during the year, even as no cash, eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l or business purposes, so that there is no cash consumption at all. Despite this, she nevertheless keep withdrawing cash, accumulating rs.2 lacs (approx.) up to 31.3.2016, and rs.3.62 lacs by 08.11.2016. This is bizarre. Why would one withdraw cash without any reason to do so, as evident from the fact of non-expenditure of any sum, leave alone in cash, during the last three years (PB pgs. 42 - 47). This becomes all the more quizzical considering that all her needs are being met as explained by Sh. Bardia during hearing, by her parents and, further, withdrawing cash from bank, in which she maintains a tidy balance, is now a matter of minutes, as indeed has been the case in the instant case, with the assessee withdrawing through ATMs. The only explanation for the cash withdrawal during the current year could be for its utilization or anticipated utilization. The second stated source for cash is the tuition income, explained to be received from six students preparing for their CS December, 2016 exams, @ rs.20,000/- each. The assessee is stated to be a qualified Company Secretary. However, when asked about when she graduated there being nothing on record which states so, met with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned cash deposit has in my view been therefore rightly regarded as unsatisfactory by the Revenue, finding her case as wholly unevidenced. (b) The assessee has also raised two legal pleas, for the first time before the Tribunal, which are accordingly being considered. It is contended that the affidavit of the assessee s father (dated 10.10.2019), stating that no cash had been deposited (on 19.12.2016) in old currency, found false, could not be held against the assessee as he was not cross-examined. In fact, the said affidavit stood retracted on 14.10.2019, stating that some of it may have been in old currency. In this regard, even as observed during hearing, what value the said affidavit when it is an undisputed fact that cash (in old currency) at rs.2.47 lacs was deposited in bank on 19.12.2016, and toward which the assessee had in fact also furnished a disclosure on 07.02.2017 (PB pgs. 36-38). Nothing, thus, turns on the said affidavit, apart from speaking very poorly of the assessee s father, who issued the statement without confirming the facts. In fact, the affidavit being admittedly and materially incorrect, the argument is also without merit. (c) The second lega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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