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TMI Blog2023 (3) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... d inaccuracies which may come to their notice. As far as non-reliance on books of accounts and other documentation so submitted by the assessee, we are of the considered view that the action of the lower authorities cannot be sustained. Assessee has submitted copies of balance sheet and profit/loss account of M/s G K Resorts as well as copy of capital account in name of the assessee which is maintained in the books of M/s G K Resorts and we find that the entries therein demonstrate withdrawal of capital by the assessee and the explanation regarding receipt of cash by way of withdrawal from his capital account therefore deserve to be accepted. Assessee has not just provided a reasonable explanation to explain the source of cash deposits but the said explanation has been adequately supported by adequate documentation and in the entirety of facts and circumstances of the case, the addition so sustained by the ld CIT(A) are hereby deleted - Decided in favour of assessee. - ITA No. 488/Chd/2022 - - - Dated:- 31-10-2022 - SMT.DIVA SINGH, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER For the Assessee : Shri Sudhir Sehgal, Adv. For the Revenue : Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng balance of Rs. 94,39,871/- and the cash gift receipts could not be given. The Assessing officer thereafter redrafted the cash book to find out the peak credit which was determined at Rs. 1,11,15,371/- on 01.01.2017 which was considered as unexplained cash credit u/s 68 of the Act and brought to tax in the hands of the assessee and the assessed income was determined at Rs.1,41,55,531/- as against the returned income of Rs. 30,40,160/-. 3. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A). The ld. CIT(A) has given part relief of Rs. 15,60,000/- and remaining addition of Rs. 95,55,371/- has been sustained. Against the said findings and order of the ld. CIT(A), the assessee is in appeal before us. 4. During the course of hearing, the ld. AR submitted that out of Rs 1.20 crores deposited during the demonetization period, there was opening cash in hand of Rs. 94.39 lacs and the details thereof are as under:- Financial Year 2015-16 Amount (in Rs.) Opening cash as on 01.04.2015 as per cash book 11,17,667/- (Page no. 59) Add: Total Withdrawals (As per bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the cash balance is being carried forward from the preceding year but the Assessing Officer without properly analyzing the cash deposits made the addition. It was submitted that the assessee is regularly assessed to tax and filing his return of income and opening cash is duly reflected in the cash flow statement submitted before the Assessing Officer. Therefore, the source of cash deposit in the bank cannot be rejected by the ld. Assessing Officer without rejecting or pinpointing any defect in the cash flow statement submitted by the assessee. It was submitted that where the claim of the assessee was not acceptable then the proper course of action was to make the addition of this cash in the relevant assessment year in which the said cash was found in the books and not in the year under consideration when it is shown as opening cash balance. In support, reliance was placed on the Co-ordinate Jaipur Benches decision in case of Pinki Devi Aggarwal vs. ITO (ITA No. 515/JP/2018 dated 16.01.2019). 6. Further with respect to the each of the individual entries in the cash flow statement so submitted by the assessee, it was submitted that the cash deposits and withdrawals as per ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Regarding gifts from two sons, it was submitted that Assessing Officer treated the cash gifts as an afterthought story merely on the basis of sequential stamp paper and held that the assessee has fabricated the cashbook to explain the cash deposits of his unaccounted money. It was submitted that the during course of assessment proceedings, sufficient documentary evidence in the form of gift deed, returns of income filed by the donors of the gift along with their cash book were furnished and the same have never been denied by the Assessing Officer. Further, on perusal of cash book of the donors of the gift, it is clear that there was enough balance with the donors to make the gifts. Further, the gift has been made by the donors from their regular source of his income which is duly reflected in the cash book submitted with the authorities. Further, furnishing of PAN no. along with the copy of ITR s clearly established that the donors are genuine and regular income tax assessee and subject to the assessment. It was submitted that in the instant case, all these ingredients were duly discharged by the assessee. Filing of copy of gift deed, affidavit of the donor confirming the givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agricultural income of Rs. 5.45 lacs which has already declared in the return of income, further, the assessee has received cash gift from his wife amounting to Rs. 2.20 lacs and in support of the gift transaction, sufficient documentary evidence was filed by the assessee in the form of valid return of income of the donor along with the cash book but the same was never confronted or denied by the Assessing Officer. It was accordingly submitted that the closing balance as on 07.11.2016 amounting to Rs. 98.58 lacs therefore stand duly verified. 12. It was submitted that the assessee has duly explained cash deposits in the regular bank account with all the supporting evidence. It was submitted that it is not a case where the assessee has any unrecorded money outside the books of accounts and therefore, the Assessing Officer has made the addition by applying the provisions of section 68 of the Act in an incorrect manner. When the credit entry in the books of accounts are from the sources which has actually been shown by the assessee as his income in the computation of income and assessed to tax, then treating the same entry as the income from unexplained sources would result in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT reported in 30 ITR 181 was relied upon and which have been followed in the case of Glass Lime Equipment Co. Ltd. vs. CIT reported in 253 ITR 454 for the proposition that where the affidavits were filed, then no adverse view can be taken and same arguments were repeated. 15. It was submitted that the submission so filed by the assessee however did not fully find favour with the ld. CIT(A) and he has sustained part addition made by the AO. Regarding the findings of the ld. CIT(A), our reference was drawn to the assessee s written submission and the contents thereof read as under: 16. It was accordingly submitted that the confirmation of the addition by the ld. CIT(A) is arbitrary and against the principle of natural justice because the documentary evidences have been brushed aside without assigning any reasons and especially after having verified in detail, each every narrative entry in the cash flow for the F.Ys 2015-16 2016-17 by the Inspector working under his charge, the whole basis for confirmation of addition, deserves to be deleted. 17. Further, reliance was placed the Co-ordinate Jaipur Benches decision in the case of Sh. Sunil Mathur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumentary evidence in the firm of withdrawals from the bank account or withdrawals from regularly maintained books of accounts which were never got audited and its authenticity which is thus not established. It was submitted that the cash book/cash flow produced by the assessee during the assessment proceedings is only a self-serving document and the assessee has not filed any documentary evidence to substantiate opening in cash in hand which was any way declared in any documents filed before the Department from which this figure can be independently verified. 19. Coming to the rental income which has been claimed as one of the sources of cash deposits by the assessee, it was submitted that the assessee has contended that the TDS provisions are not applicable. However, the same is not factually correct as the assessee in his computation of income for A.Y 2016-17 has shown income from various properties which varies from Rs 1.8 lacs to Rs 6.95 lacs where the TDS provisions are clearly applicable. Regarding agricultural income, it was submitted that the assessee has shown agricultural income in ITR for A.Y 2015-16 and for A.Ys 2013-14 and 2014-15, neither any agricultural income h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been disclosed as evident from his tax filings for A.Y 2011-12 to A.Y 2016-17 and his tax returns have been subject to scrutiny and assessment as evident from the assessment orders passed for A.Y 2011-12 to A.Y 2013-14. We therefore find that the assessee has an established history of tax filings and disclosure of his sources of income in the past assessment years and which have been subject to scrutiny by the Revenue as well. In the aforesaid background, the explanation of the assessee has to be understood and appreciated as regards the source of cash deposits during the year under consideration. It has been submitted by the assessee that given his nature of business and other financial dealings, he was having sufficient cash-in-hand at the beginning of the year and also during the year which was later on deposited by him in his bank accounts. To substantiate his statement, the assessee has submitted the copies of annual financial statements and books of accounts maintained in respect of M/s G.K Resorts where the business of renting of halls for marriages and other functions have been carried on in his sole proprietor capacity and copies of separate bank accounts maintained f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Account of Corporation Bank of assessee 35-36 X. Copy of HDFC Bank Account in the personal books of accounts of Sh. Gulshan Kumar for Asstt. Year 2016-17, 37-45 xi. Copy of Corporation Bank Account in the personal books of accounts of Sh. Gulshan Kumar for Asstt. Year 2016-17, 46 xii. Copy of ICICI Bank Account in the personal books of accounts of Sh. Gulshan Kumar for Asstt. Year 2016-17, 47 xiii. Copy of Loan Accounts of ICICI Bank in the books of accounts of assessee. 48-49 xiv. Detail of the properties owned by the assessee during Asstt. Year 2017-18 with address. 50 XV. List of Secured loans during Financial Year 2016-17, 51 xvi. Copy of the personal Cash book of the assessee from 1.4.2016 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 104-105-A xiii. Copy of Account of Repair Maintenance in the books of accounts of G.K. Resorts for F.Y. 2016-17, 106-107 xiv Copy of the Assessment orders u/s 143(3) in the case of assessee for Asstt. Year 2011 -12, 2012-13 and 2013-14. 108-117 XV. Copy of Assessment Order of Sh. Sahil Kumar for Asstt. Year 2012-13. 118-120 xvi. Copy of the order of Hon'ble ITAT, Chandigarh Bench, Chandigarh in the case of Sh. Rohit Kumar for Asstt. Year 2010-11 to prove that he is a man of mean. 121-127 3. Copy of the Additional Submission as per Order Sheet entry dated 11.04.2022 along with all Enclosures. 128-139 i. Copy of ITR return for Asstt. Year 2012-13 alongwith relevant page showing substantial agricultural income. 140-141 ii. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the books of accounts audited, insisting that the books of accounts or for that matter, the cash book is not audited and consequent cash flow statement is not reliable, we find that it is a case where the authorities have not been reasonable in their expectation rather than the case where the assessee has not provided a reasonable explanation. At the same time, where the books of accounts, cash book and other documentation so exist and produced for verification, the authorities are well within their right and jurisdiction to examine the same and point out the defects and inaccuracies which may come to their notice. Therefore, as far as non-reliance on books of accounts and other documentation so submitted by the assessee, we are of the considered view that the action of the lower authorities cannot be sustained. We find that similar view has been taken by the Coordinate Jaipur Benches in case of Sh Sunil Mathur vs ITO (supra) where it was held as under: 15. We have heard the rival contentions and perused the material available on record. The issue under consideration relates to source of cash deposits during the year in the two bank accounts maintained by the assessee amounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd savings as a percentage of earnings seems reasonable to us in absence of anything contrary on record. The rental and agriculture income has been accepted by the ld CIT(A) and the same are not in dispute. Regarding gifts received from his two sons, it is noted that documentation in form of personal cash book maintained by both the sons, their bank statements, copies of their tax returns, assessment orders and gift deed by way of duly attested affidavits have been submitted and on perusal thereof, we find that the assessee has duly discharged the onus cast upon him in terms of identity, genuineness of the gift transaction and the creditworthiness of his two sons, and the explanation regarding receipt of gift from the sons to the father out of love and affection deserve to be accepted. Regarding cash received from M/s GK Resorts, the assessee has submitted copies of balance sheet and profit/loss account of M/s G K Resorts as well as copy of capital account in name of the assessee which is maintained in the books of M/s G K Resorts and we find that the entries therein demonstrate withdrawal of capital by the assessee and the explanation regarding receipt of cash by way of withdrawal ..... 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