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TMI Blog2022 (11) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... loans and advances certainly seems to be abnormal but the same cannot be rejected until and unless it is cross verified from the concern parties. As such no addition can be made based on surmise and conjecture. Had there been any doubt about the credibility of the loan shown by the assessee, the onus was upon the revenue to disprove the contention of the assessee based on the relevant documentary evidence. Accordingly in the absence of any cross verification, we are not inclined to uphold the finding of the authorities below about the source of cash deposit. With respect to the bank withdrawal, we note that the assessee has claimed to have withdrawn from the bank which is evident from the order of the authorities below. Admittedly, the advances were made by the assessee as on 31 March 2014, thus it is transpired that withdrawal from the bank was utilized for making such loans and advances to the extent of the amount discussed above. However there was some amount left out of the withdrawal from the bank amounting which probably has been utilized by the assessee for making the cash deposit in the bank. Assessee has declared an income in the income tax return and therefore a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - to Rs. 8,13,000/- only. Likewise, the assessee has not shown any withdrawal for household expenses throughout the year and also made withdrawal from the bank on 4 occasion only. Further, the cash was deposited just before making payment to Bhumika Commodities Pvt Ltd. for making investment in shares and commodities. Therefore, the AO held that assessee s explanation that cash was deposited out of withdrawal and recovery of cash received from loan and advances was not tenable. Hence, the AO made addition of Rs, 10,40,800/- under section 69A of the Act. 5. The aggrieved assessee carried the issue before the learned CIT(A). 6. The assessee before the learned CIT-A furnished copy of balance sheet for the year ending 31st March 2013 and 2014, cash book for FY 2013-14 and list of loan parties. The list of loan parties was containing details of loan amount and detail of documentary evidences such as copy of confirmation, PAN, Adhar card and in some cases copy of ITR. The learned CIT-A forwarded the submission of the assessee to the AO for the remand report. 7. The AO vide letter dated 16-01-2019 submitted that the contention of the assessee that cash was deposited out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is placed on the following decision where it has been held that cash deposited in the banks, if not supported with the proper evidence, will be treated as unaccounted deposit u/s.68 of the Act. 1. Sudhir Kumar Sharma HUF Vs, CIT Punjab Si Hariyana 46 taxrnan.com 340 held as under:- Section 68 of the Income-tax Act, 1961 - Cash credits (Cash deposits) - Assessment year 2007-08 - During assessment proceedings, Assessing Officer noticed that assessee had deposited huge amount of cash in his bank account - In view of failure of assessee to explain source of said deposits, Assessing Officer added amount so deposited to assessee's taxable income by invoking provisions of section 68 - Tribunal confirmed said addition - Whether since various amounts in cash were deposited in bank account of assessee, onus was upon assessee to explain nature and source of said cash deposits -Held, yes - Whether since assessee failed to give list of persons who advanced cash to him along with their confirmation in respect of said cash credits, impugned addition was to be confirmed - Held, yes [Para 9] [In favour of revenue] FACTS During assessment proceedings, the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L - 611 - HC Cash deposit can be treated as unexplained income if the assessee was unable to link the cash withdrawn from the bank account in the cash deposit. 4.10. The issue is also covered by the recent decision of Hon'ble Ahmedabad ITAT, Hon'ble Gujarat High Court and Hon'ble Supreme Court in the case of Pavankumar M. Sanghavi v/s ITO. The Hon'ble ITAT ( 81 taxmann.com 308 ) has held that when Assessee received unsecured loan but could not produce lenders for verification and these lenders were found to be shell companies, said loan transactions could not be said to be genuine merely because assessee filed loan confirmations copies of ledger accounts and other supporting evidences. The relevant observation of the ITAT is also reproduced herein below: 8 As I proceed to deal with genuineness aspect, it is important to beat in mind the fact that what is genuine and what is not genuine is a matter of perception based on facts of the case vis-a-vis the ground realities The facts of the case cannot be considered in isolation with the ground realties It will, therefore, be useful to understand as (o how the shell entities, which the loan credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 68 of the Act there could not have been made. However, as noted, the Tribunal has minutely examined the position of the lenders, the circumstances under which, the amounts were allegedly loaned to come to the conclusion that the transactions were not genuine, The Hon'ble apex court on 01.5.2018 also dismissed the SLP filed against the order of the Hon'ble Gujarat High Court . 4.11. Considering the facts and the decisions cited above, the addition made by the AO is confirmed and ground of appeal is dismissed. 9. Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before the ITAT. 10. The learned AR before me filed a paper book running from pages 1 to 198 and made various contentions to justify the source of cash deposited in the saving bank account. The 1st contention of the learned AR was that there was cash available with the assessee for making the deposits in the bank on account out of recoveries of loan and advances given by the assessee in the earlier years, out of cash withdrawal and the profit on in the year under consideration. According to the ld. AR, there was the cash book prepared by the assessee just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n deposits in the bank account which was subsequently withdrawn and again the advance was made by the assessee to the same parties. In many of the cases I have perused the confirmation and find that the assessee after recovery of the loans and advances has again made the loans and advances in the short span of time. Therefore it is difficult to believe the version of the assessee that he has recovered loan advances in cash and deposited the same in the bank and again given the loans and advances to the same parties after making withdrawal from the bank. Indeed, the transaction shown by the assessee with respect to such loans and advances certainly seems to be abnormal but the same cannot be rejected until and unless it is cross verified from the concern parties. As such no addition can be made based on surmise and conjecture. Had there been any doubt about the credibility of the loan shown by the assessee, the onus was upon the revenue to disprove the contention of the assessee based on the relevant documentary evidence. Accordingly in the absence of any cross verification, we are not inclined to uphold the finding of the authorities below about the source of cash deposit to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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