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TMI Blog2022 (8) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in sustaining an addition of Rs. 2,00,000/- u/s 69A as unexplained credit entries in bank account. 4. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in sustaining an addition of Rs. 1,01,075.30 u/s 56 as unexplained interest income/receipt in bank account. 5. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in not allowing deduction u/s 80C amounting to Rs. 1,00,000/- in respect of HDFC Life Insurance. 6. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)grossly erred in upholding the invocation of section 115BBE for computing the tax liability. 7. That the appellant craves leave to add, amend, alter modify, substitute or delete any ground or grounds of appeal on or before the hearing of the appeal." 3. The assessee has raised a petition for additional evidence which reads as under:- "i) Copy of cheque for Rs. 2,00,000/- obtained from the bank of the appellant. This cheque was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submissions, evidences, Indian customary tradition and factual situation. The sources of cash deposits are explained as under :- 1. That a sum of Rs.5,01,000/- was received as cash gifts from Mrs. Indu Pandya (mother of Abhilasha Jain) on various occasions in support of which bank statements of Mrs. Indu Pandya are furnished at paper book page no. 19 to 23. Affidavit of Mrs. Indu Pandya is furnished at paper book page no. 18 as confirmation of the gifts. Details of cash withdrawals are furnished as under :- S.NO. DATE AMOUNT 1 13.08.2012 10000 2 13.09.2012 50000 3 03.10.2012 36000 4 22.10.2012 25000 5 13.12.2012 50000 6 02.01.2013 50000 7 27.02.2013 10000 8 04.04.2013 25000 9 05.04.2013 15000 10 13.07.2013 20000 11 12.11.2013 10000 12 11.08.2014 50000 13 11.08.2014 25000 14 12.09.2014 20000 15 25.09.2014 55000 16 05.12.2014 50000 Total 501000 It is humbly submitted that the cash was deposited in the bank account due to directions/instructions of government as demonetization was declared. Cash flow statement is furnished at paper book page no. 1 to 3. 2. That a sum of Rs.11,25, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted on surmises and suspicion without any material on record. The cash flow statement and other evidences submitted by the appellant were arbitrarily rejected without pointing out any specific defect. No material was brought on record by the ld. A.O. to establish that the cash withdrawn from the bank account was not available for deposit when demonetization was declared. The humble appellant wish to rely on the following judgments :- S.No. Judgement Held 1 Shri M. Prabhakar ITA No. 1727/Hyd/2014 dated 11.11.2016 (ITAT Hyderabad) Bench AO concluded that there is no possibility of keeping such huge amount in cash by the assessee being a NRI but AO has not brought on record that why he cannot keep so much of cash in hand. AO has made the addition merely on conjectures/surmises/suspicion and no proper reasons were given why he cannot keep the cash in hadn except he remark of being an NRI. The Hon'ble ITAT, Hyderabad Bench relied on the judgment of Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. wherein it was held by the Hon'ble Apex Court that the AO cannot complete the assessment purely on guess and without any reference to evidence or any material at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dave Vs. ITO (ITAT, Jodhpur) 94 TTJ 19 Mere fact that the assessee could not explain the time gap between the amount withdrawn and investment or where the amount was kept would not itself justify the addition. 8 ACIT Vs. Baldev Raj Charla 121 TTJ 366 (ITAT, Delhi) There being no material with IT authorities to show that the amounts of cash deposits in question, admittedly withdrawn from bank and assessee concern, were utilized for any other purpose, no addition could be made only on the ground that there was time gap between the withdrawals and the corresponding cash deposits. 9 Smt. VeenaAwasthi ITA No. 215/LKW/2016 dated 30.11.2018 (ITAT Lucknow) All throughout Assessing Officer has raised suspicion on the behavioural pattern of frequent withdrawal and deposits by the assessee. There is no law in the country which prevents citizens to frequently withdraw and deposit in his own money. Documentary evidences furnished before the Revenue clearly clarifies that on each occasion at the time of deposit in her bank account, assessee had sufficient availability of cash which is also not disputed by the revenue. Entire transactions of withdrawals and deposits are duly reflected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Just before demonetization, as per the cash flow statement the appellant was having cash balance of Rs.22,73,500/- out of which Rs.15,00,000/- were deposited back in bank account due to demonetization, hence still Rs.7,73,500/- surplus is available with the appellant to cover the allegation of ld. A.O. regarding personal expenditure, petty cash withdrawals etc. It is humbly submitted that the entire source of cash deposits was duly explained during the assessment proceedings with supporting evidences but the ld. A.O. still opted to make the addition brushing aside all the submissions, evidences, Indian customary tradition and factual situation. Hence, it is most respectfully requested that the impugned addition, being illegal and unjustified, may kindly be deleted." 7. Aggrieved by the assessment order, the assessee filed an appeal before the ld. CIT(A) but remain unsuccessful and ld. CIT(A) confirmed the addition by observing in para 8 to 8.11 reads as under:- "8. Ground no. 2 is against addition of Rs. 15,00,000/- made u/s 69A towards unexplained cash deposits under bank account. 8.1 It has been contended that the appellant had received Rs. 5,01,000/- from her mother in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cash, there was no reason to withdraw further cash from the bank account when she already had huge unutilized cash available with her. In the fact and circumstances the whole argument is so make believe story, after thought and completely implausible. The argument is rejected. 8.3 During the assessment/ appeal the appellant had submitted cash flow statement which showed that only incoming were shown but no expenses/ cash outflows were shown. It is not possible that the appellant had not utilized even a single rupee in all these years and did not incur even a single rupee expenditure. The cash flow statement which is concocted, fabricated and self-serving has been rightly rejected by the AO. 8.4 It is also noteworthy that the huge cash deposit of Rs. 15,00,000/- was made by way of a single deposit on 12.11.2016 and it was clearly made in consequence of demonetization of high value currency. The appellant has not shown that he had ever made such a huge cash deposit in earlier or subsequent financial years. 8.5 Demonetization of Rs. 500 and Rs.1000 bank notes was announced by the Hon'ble Prime Minister on 08.11.2016. The purpose was inter-alia to unearth black money which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t satisfactorily prove source and nature of amount which he encased on demonetization, revenue authorities were perfectly justified in drawing an inference that said sum was of an income nature. 8.9 Hon'ble ITAT Delhi has in Leela Devi Vs /TO (ITATDelhi) [ITA. No. 1423/Del/1420] has upheld addition of unexplained cash deposit in the bank account in AY 2017-18 i.e. during the demonetization period. 8.10 The appellant claims are unsubstantiated, without any tenable evidence, self-serving and a make believe story. Clearly, the appellant had deposit her own undisclosed money in the bank account during the demonetization period. The appellant has failed to explain the source of the same, the addition of Rs. 15,00,000/- u/s 69A of the Act made by the AO is confirmed. 8.11 This ground of appeal is dismissed" 8. In addition to the above written submission, the ld. AR of the assessee submitted that the assessee being a lady kept her stridhan amount received as gift on marriage and other social occasions including the withdrawal from NRE/NRO account made by the assessee. The same is not utilized anywhere and lying in India. The mother of the assessee gifted cash and same was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash withdrawal cannot be considered as used without bringing anything contrary on record and for this the benefit goes in favour of the assessee. The assessee has clearly established the nexus of cash deposits viz-a-viz to the cash available with the assessee filing of all relevant record including the affidavit of her mother and her bank statement. All these records are not disputed by the Assessing Officer. The ld. AR of the assessee has also submitted that the invocation of the higher rate U/s 115BBE of the Act is effective from 15.12.2016 as the Hon'ble President of India gave consent on that date whereas the money has deposited dated 12.11.2016 and thus, the higher rate cannot be applied. 9. Per contra, the DR appearing on behalf of the Revenue submitted that the addition made by the AO and ld. CIT(A) is based on the provisions of Section 69A of the IT Act, the assessee failed to establish the manner for which the assessee is in a possession of such a substantial amount in cash. The assessee failed to explain satisfactory that how cash she has received on social occasions and why withdrawal were consistently made in past. Even though that the assessee is having sufficient cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much of money and what made the assessee to keep such huge money in hand. But, on record, submitted by the assessee, we find that he had sufficient money. Even the AO could not bring any proof that the assessee has in fact utilized or applied the cash withdrawn two years back, except making a remark that there is no possibility of keeping such amount by the assessee being a NRI. He has not brought on record, why he cannot keep so much of cash in hand and no contrary findings were given by him against the submissions of assessee. AO has made the addition merely on conjectures/surmises/suspicion and no proper reasons were given why he cannot keep the cash in hand except the remark of being an NRI. In our view, the Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. (supra) has held that the AO cannot complete the assessment purely on guess and without any reference 9 ITA Nos. 1727/H/14 Sri M. Prabhakar to evidence or any material at all. Also in the case of Umacharan Shaw & Brothers (supra), the Apex Court has held that AO cannot complete the assessment merely on suspicion which cannot take the place of proof in these matters. Respectfully following the ratio laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant's bank statement of HDFC NRO A/c No. 50100085719780 (paper book page no. 17) one credit entry of Rs.2,00,000/- is appearing on 05.01.2017 to which the appellant submitted that it seems cheque deposit for dollar exchange, details are being tracked and shall be submitted shortly. The ld. CIT(A) rejected the submissions while passing the order as by that time the appellant lady residing at China couldn't provide the details. The appellant lady was unable to trace the details as she was in China and Covid-19 situation was disturbing the world all over. However, after the CIT(A) passed the order, the details were traced. The credit entry of Rs.2,00,000/- pertains to receipt back of sum advanced from M/s Shri Ganesh Sales. Copy of cheque obtained from the HDFC bank alongwith bank statement of earlier year showing sum advanced to M/s Shri Ganesh Sales on 15.03.2016 has been submitted as an additional evidence alongwith an application dated 02.06.2022 (filed on 03.06.2022) for admission of additional evidences under the Income-tax Appellate Tribunal Rules. For the reasons stated above, it is most respectfully requested that this issue may kindly be restored back to the ld. A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained, capital account and Balance sheet cannot be furnished." 19. Aggrieved by the assessment order before the ld. CIT(A) who has confirmed the addition by observing in para 11 to 11.1 reads as under:- "11. Ground no. 5 is against not allowing deduction u/s 80C of Rs. 1,00,000A made in respect of HDFC life insurance. 11.1 The appellant has submitted copy of the policy document. Admittedly, the same was not submitted during assessment. No request has been made during appeal under Rule 46A for admission of this policy as additional evidence. Further, the document nowhere indicates that the same is an approved investment u/s 80C of the Act. In view of these facts, the deduction cannot be allowed u/s 80C. This ground of appeal is dismissed." 20. Per contra, the ld. DR relied on the orders of lower authorities. 21. We have heard the rival contentions and perused the material available on record. It is seen that the ld. CIT(A) did not deal this issue as assessee has not placed on record a petition under Rule 46A but assessee contended that details are already in bank statement. Considering the overall facts we also feel that let this issue also be verified by ld. AO based o ..... 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