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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 ..... selected under CASS on account of large cash deposits made during the demonetization period for complete scrutiny, thereafter notices u/s 143(2) and 142(1) were issued calling for the information/documentation. Further, during the course of assessment proceedings, the assessee was also issued a show cause dated 19.12.2019 as to why the amount of cash deposits in the demonetization period amounting to Rs. 1,20,58,272/- should not be considered as unexplained cash credit and added to his income u/s 68 of the Act. In response to the show cause, the assessee filed his submissions dated 24.12.2019 which were considered but not found acceptable to the Assessing Officer. As per the Assessing Officer, from the perusal of the cash book, it has been found that it was unaudited cash book having huge opening cash in hand as on 01.04.2016 amounting to Rs. 94,39,871/- which is unverifiable and without any documentary evidences. Further, no documentary evidences have been furnished regarding the rental receipts as well as receipt from agriculture income. Regarding cash gifts from his sons namely Rohit Kumar Punani and Sahil Kumar Punani, though the assessee has submitted the cash book of his two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long with all the evidences were duly submitted and explained before the Assessing Officer during the course of assessment proceedings. However, Assessing Officer without any finding of fact against the assessee made the addition. It was submitted that the assessee, in addition to the books of accounts related to his business, also maintain the personal books of accounts. Further during assessment proceedings, personal cash book of the assessee was duly submitted before the Assessing Officer. It was submitted that the personal books of accounts are never subject to audit and neither there is any requirement in law to get the personal books of accounts audited. It was accordingly submitted that the action of the Assessing Officer is highly unjustified for rejecting the personal cash book merely on the ground that the same is not audited and that too, when the law does not impose any compulsory audit of the personal books of accounts. It was submitted that the cash deposits were made out of the cash balance in the cash book. It was further submitted that the cash balance is being carried forward from the preceding year but the Assessing Officer without properly analyzing the cash dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer without reason rejected the explanation offered by the assessee. 7. It was further submitted that assessee has received the agricultural income in the captioned year i.e 2016-17 and in the preceding year i.e. F.Y 2015-16. In addition, a confirmation from the cultivating tenant has also been filed by the appellant during the assessment proceedings indicating the amounts paid by him to the assessee during the captioned year involved in this appeal. It was submitted that amount has already been taken as income by the assessee in his return of income as agricultural income and the Assessing Officer has no authority in law to change the source of income as income from undisclosed sources, unless something to the contrary is established by him. It is submitted that when the assessee has furnished evidence to support his claim of agricultural income during the years in question and further, the same has not been controverted by the Assessing Officer by bringing any adverse material on record, the explanation of the assessee cannot be rejected. 8. Regarding gifts from two sons, it was submitted that Assessing Officer treated the cash gifts as an afterthought story merely on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer as for the year under appeal and further, the income has been declared under the same sources by the assessee and well accepted by the Assessing Officer. But in the year under appeal, the same sources have been denied by the Assessing Officer without any material evidence on record. It was accordingly submitted that the opening cash in hand amounting to Rs. 94.39 lacs represents the declared source of income and the said cash has been deposited during the demonetization period. 10. Further, our reference was drawn to the cash book prepared for F.Y 2016-17 and contents thereof as below. 11. In this regard, it was submitted that the item wise explanation of the entries reflected in the cash book were duly submitted before the Assessing Officer. It was submitted that the cash deposits and withdrawals are from the regular bank account which is already disclosed in the income tax return. It was submitted that the assessee has let out various properties from where assessee earns monthly rental income of Rs. 55000/-. Similarly the 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 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain, a detailed submission was filed before the ld CIT(A) which also find mention in at pages 19-25 of the impugned order. 14. It was submitted before the ld CIT(A) that the assessee had relied upon the cash flow for the financial year 2015-16 and 2016-17 and all the bank accounts and even the income declared by the assessee for A.Y 2013-14 to 2015-16 where the total income for these three years was Rs. 86,37,670/- for which the relevant proofs in the shape of acknowledgement had been submitted. It was further submitted before the ld CIT(A) that the fact that the assessee was always having substantial cash is proved from the fact that the case of assessee for A.Y 2011-12 was subject matter of reopening u/s 147 of the Income Tax Act, 1961 for a cash deposit of Rs.3,91,87,878/- and no adverse view have been taken by the department. Further, all such submissions which were made earlier were reiterated, along with the affidavits filed by the two sons of the assessee with regard to the gifts and the judgment of Mehta Parikh vs. 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions supported the order and the findings of the Assessing Officer as well as ld. CIT(A). Regarding the contention of the ld. AR that the addition on account of opening cash in hand cannot be made in the year under consideration, it was submitted that the same cannot be accepted for the reason that it is the assessee claim that cash deposited during the year under consideration was out of opening cash in hand and given that where the said claim of the assessee regarding reopening cash in hand was not found substantiated and rejected by the Assessing Officer, the addition was made by him. It was further submitted that the assessee has made a cashbook with huge opening cash of Rs. 94.39 lacs which is an arbitrarily figure of cash in hand which cannot be accepted until and unless, these are reflected in the regular books of accounts of the assessee or declared/intimated to the Department before selection of case for scrutiny. It was submitted that such cash in hand is not substantiated by any documentary 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation so submitted by the assessee explaining the source of such cash deposits. For the purposes, it is relevant to note the nature of activities being undertaken by the assessee, the books of accounts being maintained by him, if any and the status of disclosure thereof by way of tax filings and acceptance or otherwise by the tax department. In this regard, it is noted that the assessee is in the business of renting of halls for marriages and other functions which he runs in his capacity as sole proprietor in the name and style of M/s G.K Resorts and for which he maintains his separate books of accounts and separate bank accounts. The assessee is also a director in M/s GKS Infrastructure Ltd wherefrom he draws remuneration. Besides, the assessee has rental income, interest income and agriculture income and for the purposes, the assessee maintains personal cash book and operates separate bank accounts. The assessee has been regular in his tax filings where the income from above sources 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or. 20 v. Copy of Director Remuneration Account of Sh. Gulshan Kumar. 21 vi. Detail of Bank Accounts as held by the Assessee in Asstt. Year 2017-18 mentioning Opening & Closing Balance. 22 vii. Copy of the HDFC Bank Account of the Assessee for the F.Y. 2016-17. 23-33 viii. Copy of Account of Bank of India of the assessee. 34 ix. Copy 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 to 31.03.2017. 52- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 140-141 ii. Copy of Acknowledge of return for Asstt. Year 2013-14 alongwith relevant page showing substantial agricultural income. 142-144 iii. Copy of Acknowledge of return for Asstt. Year 2014-15 alongwith relevant page showing substantial agricultural income. 145-147 iv. Copy of Acknowledge of return for Asstt. Year 2015-16, showing substantial agricultural income. 148 v. Copy of the affidavit of Sh. Chamkaur Singh, from which, it proves that the income has been earned by the assessee alongwith English translation. 149-149 A vi. Copy of returns of Income of Sh. Rohit Kumar for Asstt. Year 2013-2014, 2014- 2015 & 2015-2016 alongwith computations of income. 150-157 vii. Copy of returns of Income of Sh.Sahil Kumar for A§stt. Year 2013-2014, 2014- 2015 & 2015-2016. 158-160 21. Further, it has been submitted by the ld AR that these documentation have been examined by the AO where each and every entry has been duly explained, thereafter, he has asked certain queries and which were duly responded, however, the AO without pointing out any defect in the documentation and other evidences so submitted has summar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by the assessee in cash over and above the declared sale consideration. It has been explained by the assessee that the source of cash deposits during the year is out of earlier two years withdrawals and cash in hand at the beginning of the year. In support of his contention, the assessee has submitted cash book and cash flow statement for previous two financial years depicting the individual transactions of receipts and payments/withdrawals. We have gone through these cash flow statements and find that the assessee has sufficiently explained the source of deposits in form of salary and other retirement benefits which have been duly declared and withdrawals towards household expenses which are partly funded by him and partly by his wife and therefore, availability of cash in hand at the beginning of the year has been sufficiently explained. In the result, considering the entirety of facts and circumstances of the present case, we hereby direct the Assessing officer to delete the addition so made in the hands of the assessee towards unexplained cash deposits and ground no. 2 of assessee's appeal is allowed. 23. Now coming to the specific explanation regarding various sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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