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TMI Blog2022 (4) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... r of these 3 bank accounts. At this juncture, we are inclined to mention that there were total 19 bank accounts which were used as the Benamidar. But the issue that arising from the order of the AO is limited to the extent of 6 bank accounts only. Accordingly, we are not inclined to give any finding on the remaining bank accounts which have been accepted as the Benamidar. Whether the cash book prepared for the financial year 2004-05 and the cash balance (opening as on 1 April 2004), should be considered as the cash available with the assessee for the purpose of depositing the same in the bank account? - AO has not brought anything on record suggesting that the assessee has made investment or utilized the impugned cash withdrawal from the bank in the financial year 2004- 05 for some other purpose. In the absence of such finding, the presumption goes in favour of the assessee that such cash was available with him which has been utilized for making the deposit in the year under consideration. At this juncture, it is also important to note that it was submitted by the assessee before the learned CIT-A that he has prepared the cash book for the period beginning from 1st April 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee : Shri Vartik Chokshi, A.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Revenue against the order of the Learned Commissioner of Income Tax(Appeals)-12, Ahmedabad, arising in the matter of Assessment Order passed under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 2006-07. 2. The only issue raised by the Revenue is that the learned CIT (A) erred in deleting the addition made by the AO on account of unexplained cash credit under section 68 of the Act. 3. The facts arising from the order of the authorities below are that the assessee in the present case is an individual and claimed to be engaged in the construction activity. The assessee was belonging to the Dev Group which was subject to search seizure operation under the provisions of section 132 of the Act dated 3rd January 2013. The assessee was found to be the Benamidar of three bank accounts of his employees which were being operated and managed at his instructions. There were cash deposits in these bank accounts which were subsequently transferred throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his claim has filed the copy of the bank book and cash book along with the bank statement for the financial year 2004-05. 3.3 The assessee also contended that he has also deposited the amount in cash in the impugned bank accounts in the year under consideration out of the cash available with the group concern namely Dev Pritam Nagar Cooperative Housing Society. 3.4 The assessee further submitted that whatever amount was deposited by way of cash in the impugned Benami bank accounts was transferred to the bank account of the assessee by way of cheque which was subsequently transferred back/returned back to the bank account of the benamidar who in turn withdrew the same in cash which was utilized to return the money belonging to Dev Pritam Nagar Cooperative Housing Society. 3.5 The assessee without prejudice to the above further contended that the Revenue has already made the addition in the hands of Shri Rameshbhai M. Solanki for the amount of cash deposited in his bank account in the year under consideration in the assessment framed under section 147 read with section 143(3) of the Act vide order dated 21st February 2014. The amount of cash deposits in the year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the amount of cash deposit as unexplained cash credit under the provisions of section 68 of the Act. The AO, for the alternate contention of the assessee was of the view that the addition made in the hands of the Shri Rameshbhai M. Solanki might get deleted by the higher forum and therefore the contention of the assessee for the double addition would no longer be tenable in that event. Thus the AO added the entire amount of ₹ 1,99,91,050/- to the total income of the assessee. 4. Aggrieved assessee preferred an appeal to the learned CIT-A. 5. The assessee before the learned CIT (A) clarified the modus operandi adopted by him for depositing the cash in the different bank accounts of his Benamidar and subsequently transferring the same in his bank account and thereafter transferring the funds from his bank account to the bank account of the Benamidar, following withdrawal of cash from the bank account of the Benamidar. As per the assessee, this modus operandi was accepted by the settlement commission in the petition filed by him for the assessment years 2007-08 to 2013- 14. 5.1 The assessee further contended that he was maintaining 19 bank accounts which were Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so not believe the payment of cash to the society which would result higher amount of cash available with the assessee as on 31st March 2006. Consequently, such higher amount of cash will reduce the income shown before the settlement commission. Thus, the action of the AO is tax neutral. 6. The learned CIT (A) after considering the submission of the assessee deleted the addition made by the AO by observing as under: 3.2 The submissions made by the appellant are considered. The Appellant was subjected to search under Section 132 of the Act on 3rd January. 2013 wherein he had stated that three bank accounts being account No. 2276, 2277 and 2542 belonging to employees/per sons and held with MCVB are benami accounts. On this basis the AO taxed entire cash deposits in three bank accounts along with unexplained cheque entries in such accounts as unexplained cash credit in the hands of the Appellant. The Appellant explained that such cash deposits were out of available cash balance with him and same was generated out of cash withdrawn from various benami accounts belonging to various employees and held in MCVB. The AO denied such credit mainly on the ground that during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Application, the Appellant has submitted cash flow statement wherein all the transactions in benami accounts including three benami accounts which are subject matter in the present Assessment Year under appeal was included and the Appellant has prepared such cash flow which is similar to cash book prepared for the current Assessment Year as well as for the preceding Assessment Years. The Appellant has 'also shown opening cash balance at ₹ 50,00,000/- in Settlement cash flow statement even though closing balance as on 31st March, 2006 was higher than such figure. It is also observed that the Hon'ble Settlement Commission has not made any adverse observation regarding above cash flow statement of the appellant and same was accepted as such in the order under Section 245D(4), dated 29th September, 2016, Considering such facts cash book prepared by the Appellant for current Assessment Year as well as for the preceding Assessment Years cannot be held to be an afterthought as such modus operandi is accepted by Hon'ble Settlement Commission and even opening balance of ₹ 50,00,000/- was considered as explained available cash balance. It is also observed that the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposit of ₹ 4,50,000/- in the name of one Shri Suresh Goswami and hence the addition made by the AO to that extent is confirmed. The related ground of appeal is partly allowed. 7. Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us. 8. The learned DR before us vehemently supported the order of the AO by reiterating the contentions raised therein. 9. On the contrary the learned AR before us filed a paper book running from pages 1 to 201 and contended that the assessee has made cash deposits in the bank account out of the cash withdrawal made in the earlier years. It was also contended by the learned AR that the assessee being the key person of Dev group has received the cash from the society which was utilized for making the deposit in the bank account. The learned AR vehemently supported the order of the learned CIT-A. 10. We have heard the rival contentions of both the parties and perused the materials available on record. The facts relating to the dispute on hand have already been explained/elaborated in the preceding paragraph. Therefore, for the sake of brevity and convenience, we are not inclined to repeat the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggesting that the assessee has made investment or utilized the impugned cash withdrawal from the bank in the financial year 2004- 05 for some other purpose. In the absence of such finding, the presumption goes in favour of the assessee that such cash was available with him which has been utilized for making the deposit in the year under consideration. At this juncture, it is also important to note that it was submitted by the assessee before the learned CIT-A that he has prepared the cash book for the period beginning from 1st April 1999 till 31st March 2006 to justify the availability of cash in hand in his books of accounts. But the AO has never questioned to the assessee about the cash available in the earlier years with the assessee. The submission of the assessee before the learned CIT-A reads as under: This argument was never pointed out during the assessment proceedings and it was only in the impugned order that the Ld.Assessing Officer challenged the opening balance as at 1.4.2004 and treated it as unexplained. The appellant in this regards submits that Cash Book pertaining to the period before that which the appellant had not furnished in order not to burde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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