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TMI Blog2022 (9) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made under section 69A - Ground No. 1 raised in assessee's appeal is allowed. Addition on account of cash deposited in the bank account of the partnership firm - unexplained money of the assessee - HELD THAT:- In the present case, nothing has been brought on record by the Revenue to support the above presumption. There is also no examination into the financials and business of the firm. Nor the statement of any other partner has been recorded, which could support the presumption reached by the Revenue. As it is pertinent to note that the transaction of cash deposit is made in the bank account of the firm, which is undoubtedly a separately assessed entity and also file its return of income. Thus, the aforesaid transaction of cash deposit was required to be examined in the hands of the firm rather than the assessee, which was one of the partners in the said firm. It is not the case of Revenue that in the assessment of firm it has been found that the cash belongs to the assessee. Therefore, in view of the above, we find no reason to sustain the addition in the hands of assessee on the basis of cash deposited in the bank account of the firm, which is a separate asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked to produce source of substantial cash deposited during the demonetisation period along with supporting documents. In reply, assessee submitted that the cash deposited during the aforesaid period was out of cash withdrawals from the HDFC bank account made during 28/07/2016 to 04/11/2016 totalling to Rs. 21 lakhs. The assessee further submitted that the cash withdrawal was lying with him and was not used anywhere else. The Assessing Officer ( AO‟) on the basis of AIR information, issue notice under section 133(6) of the Act to the HDFC bank and called for various information pertaining to the assessee and the disputed transaction, which was responded by the concerned bank. The AO vide order dated 24/12/2019, passed under section 143(3) of the Act did not agree with the submissions of the assessee and observed as under: 5. .......... .......... The assessee's submissions were not found acceptable. There is no need to withdraw cash from bank accounts and keep it lying in home. If the cash was withdrawn for a particular purpose then why were there more withdrawals at a regular frequency of around 10-15 days without first utilizing the cash already at hand. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame bank account. There has to be a reason for withdrawal of cash and re-depositing the same which could be non-utilization of cash so withdrawn for any specific reason. However, It is not even the case of the assessee that the cash was withdrawn for making payment in respect of any transaction which did not materialize and therefore, the same was deposited back in the bank account. The assessee did not make any such contention neither any evidence in this regard was furnished either at the time of assessment or at the time of appeal. The submission of the assessee is that the cash was withdrawn from the bank account and was kept at his residence which was deposited back due to demonetization without being specific as to the reason for the same. The assessee did not furnish any explanation as to why this cash was withdrawn and why it was lying at his residence. As mentioned previously, a person having bank account will not simply withdraw money and keep it at his residence without any purpose. It is, therefore, evident that the cash which was withdrawn on multiple dates in small amount from 28.07.2016 to 28.10.2016 was utilized by the assessee for the purpose which the assessee did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unga (West) 28.10.2016 1,50,000/ Matunga (West) Total 20,00,000/ 9. From the perusal of the statement of bank account maintained with HDFC Bank, Martunga (West) branch, Mumbai, forming part of the paper book, the above details are fully substantiated. We also find that apart from the aforesaid cash withdrawals, the assessee also withdrew amount of Rs. 2,25,000 on 04/08/2016 as well as amount of Rs. 28,500 on 29/09/2016. Further, it is also evident that all the above cash withdrawals have been made through cheque by the assessee. Thus, as on the date of declaration of demonetisation i.e. 08/11/2016, the assessee has withdrawn an amount of Rs. 22,53,500 from the HDFC Bank, Martunga (West) branch. As per the assessee, the cash which was withdrawn was kept at his residents and due to demonetisation, the assessee deposited the old bank notes into Martunga (West) branch amounting to Rs. 20 lakh on 10/11/2016. From the above, it is evident that the amount withdrawn by the assessee was much more than the amount deposited in the very same bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose, in that even, it is not open to the authority to make the addition on the basis that the assessee has failed to explain the source of deposits. As regards the decision of Hon‟ble Punjab and Haryana High Court in Smt. Kavita Chandra vs CIT: [2017] 81 Taxmann.com 317 (Punjab Haryana) relied upon by the learned DR is concerned, we find that the same is factually distinguishable. As in that case, the amount of cash deposit was much more than the withdrawal by the taxpayer from its bank account. 11. Thus, in view of the above, we find no reason to sustain the addition made by the lower authorities, particularly when both cash withdrawal and deposit are duly substantiated from the bank statement of the very same branch. Accordingly, we direct the AO to delete the addition of Rs. 22 lakh made under section 69A of the Act. As a result, ground No. 1 raised in assessee‟s appeal is allowed. 12. The issue arising in ground No. 2, raised in assessee‟s appeal, is pertaining to addition of Rs. 25,00,000, on account of cash deposited in the bank account of the partnership firm i.e. Nivara Builders and Developers. 13. The brief facts of the case pertaining to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lders and Developers. The assessee claimed that he has retired, but he did not mention the date of retirement i.e. whether he had retired from the firm before the cash was deposited in the firms account. In any case, it is an undisputed fact that the assessee has a close association with the firm. On perusal of the firm's account it is found that cash amounting to Rs. 25,00,000/- was deposited in The Bharat Co-op. Bank (Mumbai) Ltd. in the account of the firm on 11.11.2016 and the amount was transferred to the assessee on 16.11.2016. It is pertinent to note that the credit balance in the firm's account prior to deposit of cash was only Rs. 32,024.53 and hence there is no dispute about the fact that Rs. 25,00,000/- received by the assessee was sourced from the cash deposit made in the account of the firm. The assessee did not make any effort to explain the source of cash deposited in the firm's account and therefore, he cannot be said to have discharged the onus of explaining the source of Rs. 25,00,000/- transferred to his account from the account of the firm when it represented deposit of cash in the firm's account. In the given facts of the case do not find any in ..... 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