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TMI Blog2023 (8) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order. AO had not able to brought any evidences on record which prove that cash in hand was not available with the company on the date of deposit of said amount into bank and moreover cash book having been accepted as genuine by assessing officer, it is proved that cash was available with the assessee-company on the fact of the case and hence the addition cannot be made arbitrary. See ATUL GUPTA V/S ITO [ 2004 (6) TMI 641 - ITAT DELHI ] wherein held that where assessee had explained source of availability of cash with him to deposited into bank accounts, there was no reason to doubt correctness of the claim and no addition on that account could be made to assessee`s income. Thus we note that cash in hand recorded in books of accounts and on the basis of which assessee has been filing the Income tax return, hence in such cases addition should not be made. - Decided in favour of assessee. - SHRI PAWAN SINGH, JM DR. A. L. SAINI, AM For the Appellant : Shri Ramesh Goyal, AR For the Respondent : Shri Vinod Kumar, Sr. DR ORDER PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2017-18, is direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponse, the assessee has made submissions regarding the source of the cash deposit. The assessee has stated in its explanation regarding source of the cash deposit that withdrawal of cash is a regular feature in its business and the cash that was deposited during the demonetization period had been withdrawn for payment of wages. Since the Rs. 500 and Rs. 1000 notes ceased to be legal tender with effect from 09.11.2016, these notes which had been withdrawn from bank for payment of wages were deposited back in the bank account. 6. However, Assessing Officer observed that in Gujarat after Diwali there is continuous closure of business activity for at least five days after Diwali, which may extend upto 10 days after Diwali. Moreover, wages and salaries are also given before Diwali invariably by all employers specially when Diwali comes to end of the Month. So in assessee s case salary must have been paid before Diwali since Diwali was on 28.10.2016., the dates of the cash withdrawal in October coincides with the pre Diwali period and therefore it has been understood that the cash withdrawn before Diwali had been paid as wages and salary prior to Diwali. The cash deposited is obvious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand available with the assessee-company was sufficient, therefore assessee-company has deposited in the bank account, out of the cash in hand available in cash book. The assessee has submitted a table for explaining the cash withdrawals, expenses incurred and the closing balance on monthly basis. As per the assessee the closing cash balance on 08.11.2016 was Rs. 69,49,182/-. The assessee submits that Rs. 45 Lacs was deposited out of the amount withdrawn from bank and remained in cash in hand after meeting expenses. The Ld. Counsel also submitted that the amount mentioned in the notice issued by the Assessing Officer, as proposed addition, is different than the actual addition made by the Assessing Officer, therefore order passed by the Assessing Officer is not sustainable in the eye of law. The Ld. Counsel further stated that addition was made by the Assessing Officer, quoting wrong section 69A of the Act, which does not apply to the assessee under consideration. The assessee has furnished the summary of cash, which is placed at paper book page no. 6 and stated that assessee was having sufficient cash in hand and the same was deposited in the bank account during the demonetarizat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, as proposed addition, is different from the actual addition made by the Assessing Officer, therefore order passed by the Assessing Officer is not sustainable in the eye of law. We do not agree with the proposition canvassed by ld Counsel, as we have gone through para no.2 of assessment order, wherein assessing officer made enquiry about cash deposit of Rs. 45 lakhs ( 25 lakhs + 20 lakhs), besides, we have gone through the notice of the assessing officer dated 20.12.2019( vide paper book page no.15), wherein the assessing officer asked the assessee to furnish the explanation about cash deposited during demonetization period. Thus, assessing officer made inquiry in para no.2 of his order for Rs. 45 Lakhs and finally made addition at Rs. 45 Lakhs (vide para no.15 of his order). Hence, we do not find any contradiction so far addition of Rs.45 lakhs is concerned, therefore, contention raised by the ld Counsel is hereby rejected. 12. The Ld. Counsel also argued that addition was made by the Assessing Officer, quoting wrong section 69A of the Act, therefore addition made by assessing officer, is not sustainable in law. We do not agree with ld Counsel and note that ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, since it is not established that the claim was a belated one the proper order to be passed is to set aside the assessments and to direct the ITO to make fresh assessments in accordance with the procedure prescribed by law. The Tribunal, therefore, erred in merely cancelling the assessment orders and in not issuing further directions as stated above. 14. We do not, however, agree with the orders made by the High Court by which it upheld the assessments and directed the ITO to make appropriate modifications. Such an order is clearly unwarranted in the circumstances of this case. The order of the High Court is, therefore, set aside. The question referred by the Tribunal to the High Court does not appear to be comprehensive enough to decide the matter satisfactorily. The question may have to be read as including a further question regarding the nature of the orders to be passed by the Tribunal, if the orders of assessments are held to be contrary to law. In the light of the above, we hold that the orders of assessments are liable to be set aside but the Tribunal should direct the ITO to make fresh assessments in accordance with law. 15. The appeals are accordingly disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on 08/11/2016 after meeting the expenses. The amount has been withdrawn on 26/10/2016, 27/10/2016 and 29/10/2016 to meet the expenses for the month of November and to meet any contingency, as per policy of the company. 16. From the above chart, it is evident that the amount of Rs.45,00,000/- has been deposited out of Rs.69,49,182/-. Therefore, it is accounted money (cash) in books of accounts which have been redeposited in bank account. Hence, source of the cash deposited in bank account has been explained by the assessee with help of the cash book balance. We note that books of accounts of assessee- company are subject to statutory audit and opening and closing balance of cash book have been verified by the auditor. Therefore, genuineness of the cash book cannot be doubted. 17. The Ld. Counsel also submitted before the Bench a comparative position of month-wise opening and closing balance and cash withdrawn from the bank for the period 01.04.2013 to 08.11.2013 and 01.04.2014 to 08.11.2014, which are reproduced below: 18. Therefore, the above comparative position of cash withdrawn from the banks and expenses shown by the assesse-company prove that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts as genuine, the cash balance shown in the cash book should not be treated wrong (not genuine), as the cash book is a part of audited books of accounts. 21. We note that amount was kept by assessee-company for meeting the requirement of expenses and contingency as per policy of company as depict from above and allegation of AO for keeping cash over a long period is not correct as mention in the Assessment order. We note that assessing officer had not able to brought any evidences on record which prove that cash in hand was not available with the company on the date of deposit of said amount into bank and moreover cash book having been accepted as genuine by assessing officer, it is proved that cash was available with the assessee-company on the fact of the case and hence the addition cannot be made arbitrary. We note that Coordinate Bench of ITAT Delhi in the case of ATUL GUPTA V/S ITO [142 TAXMANN.COM 36 (ITAT DELHI)] held that where assessee had explained source of availability of cash with him to deposited into bank accounts, there was no reason to doubt correctness of the claim and no addition on that account could be made to assessee`s income . 22. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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