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TMI Blog2023 (11) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s explanation that the cash deposits of Rs. 33 lacs (supra) made in its bank account during the year were sourced out of the same. Accordingly, explanation of the assessee firm as regards the source of the cash deposits in its bank account maintained with Federal Bank, Bilaspur merits acceptance. Thus vacate the addition made by the AO u/s 69A of the Act. The Ground of appeal no. 1 of the assessee firm is allowed. - SHRI RAVISH SOOD, JUDICIAL MEMBER For the Appellant : Shri R.B Doshi, CA For the Respondent : Shri Satya Prakash Sharma, Sr.-DR ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee firm is directed against the order passed by the Commissioner of Income-Tax (Appeals), (NFAC), Delhi [for short, CIT(A) ] dated 27.01.2023, which in turn arises from the order passed by the A.O. u/s. 144 of the Income-tax Act, 1961 (for short Act ) dated 29.12.2019 for A.Y. 2017-18. The assessee firm has assailed the impugned order on the following grounds of appeal: 1. Ld. CIT(A) erred in confirming addition of Rs. 33,00,000/- made by AO on account of cash deposited in bank account of the appellant, holding it to be unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax payment for the year ended 31.03.2016. The assessee firm stated that it had in the preceding year purchased agricultural land at village Chhatona, Bilaspur, for constructing a residential housing project after getting diversion of land but in absence of necessary permissions from the town and country planning department it had to abort its said project. The assessee further stated that the aforesaid land at Village : Chhotona, Bilaspur was, thereafter, sold in the immediately preceding year i.e. A.Y. 2016-17 and the profit on the said sale transaction was duly offered for tax in its return of income for the said year. 5. Referring to the cash deposits of Rs. 33 lacs in its bank account No. 16660200000753 maintained with Federal Bank, Bilaspur, it was stated by the assessee that the said money was utilized for repayment of the outstanding liability of the erstwhile partner, viz. Shri. Abhishek Shrivastava (supra) i.e the partner who had retired in the preceding year on 09.06.2015. Elaborating on the source of cash deposits of Rs. 33,00,000/- (supra), it was stated by the assessee that the same was sourced out of the Opening Cash In Hand (C.I.H) of Rs. 52.47 lacs that was ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-01-2021 25-01-2021 Non-Compliance 2. 03-11-2021 12.11.2021 Non-Compliance 3. 09-12-2022 26-12-2022 Non-Compliance 4. 04-01-2023 11-01-2023 Non-Compliance 6.1 In view of the non-compliance of all the above notices issued to the appellant, there is no option but to go further and dispose the present appeal on the basis of the details furnished by the appellant at the time of filing this appeal. 7. In the course of assessment proceedings, the AO provided numerous opportunities to the appellant to explain his cash deposits. But the appellant failed to comply with all the notices. Therefore, the AO made the additions. Even in the current appellate proceedings also, the appellant never came forward with his submission/explanation to the grounds mentioned by the appellant despite being offered ample of opportunities through hearing notices issued by this office. Although the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016. The Ld. A.R drew our attention to the balance sheet of the assessee firm on 31.03.2016 wherein C.I.H of Rs. 52.47 lacs (supra) was shown, Page 58 of APB. Also, the ld. AR had taken us through the income-tax return filed by the assessee firm for the immediately preceding year, i.e. A.Y. 2016-17, Page 26-57 of APB. The Ld. A.R further drew our attention to the relevant extracts of the income-tax return of the assessee firm for the preceding year wherein C.I.H of Rs. 52.47 lacs (supra) was reflected in the assessee s balance sheet on 31.03.2016, Page 32 of APB. Elaborating further, it was submitted by the ld. AR that opening C.I.H of Rs. 52.47 lacs (supra) on 01.04.2016 was, in turn, sourced out of the sale proceeds of the agricultural land at Village: Chhatona, Bilaspur, which the assessee firm was constrained to sell in the immediately preceding year, i.e. A.Y. 2016-17 as necessary permissions could not be obtained from the town and country planning department and other concerned authorities for construction of a housing project on the same. In sum and substance, the assessee firm claimed that the cash deposits of Rs. 33 lacs (supra) in its bank account during the year unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng CIH of Rs. 52.47 lacs (supra) on 01.04.2016 for the reason that there was a substantial time gap between the date of availability of cash with the assessee i.e. 01.04.2016 and deposit of the same in its bank account in the month of November 2016. Also, the AO had observed that the fact that the assessee firm had made the cash deposits in four tranches i.e. on 13.11.2016, 15.11.2016, 16.11.2016, and 16.11.2016 did not inspire much confidence as regards the veracity of the aforesaid explanation of the assessee. Considering the fact that the cash deposits in the bank account were made by the assessee firm after a long interval and were made during the demonetization period, the AO had held the same as the assessee s unexplained money u/s 69A of the Act. 15. I am unable to persuade myself to concur with the aforesaid observation of the AO. Admittedly, the AO had not doubted the availability of C.I.H of Rs. 52.47 lacs (supra) on 01.04.2016 with the assessee firm. Although I find that there is a time gap of 7 months in depositing the cash in the bank account of the assessee firm, i.e. in the month of November 2016, but at the same time, I cannot remain oblivion of the fact that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the C.I.H of Rs. 52.47 lac (supra) that was available with the assessee firm on 01.04.2016 was thereafter utilized by it for making any other investment or was exhausted towards incurring any expenditure, therefore, I find no justification on his part in summarily rejecting the assessee s explanation that the cash deposits of Rs. 33 lacs (supra) made in its bank account during the year were sourced out of the same. Accordingly, I am of the view that the explanation of the assessee firm as regards the source of the cash deposits of Rs. 33 lacs (supra) in its bank account No. 16660200000753 maintained with Federal Bank, Bilaspur merits acceptance. Thus, in terms of the aforesaid observation, I set aside the order of the ld. CIT(A) and vacate the addition of Rs. 33 lacs (supra) made by the AO u/s 69A of the Act. The Ground of appeal no. 1 of the assessee firm is allowed in terms of my aforesaid observations. 16. Ground of appeal No. 2 is general and is dismissed as not pressed. 17. Resultantly, the appeal filed by the assessee firm is allowed in terms of the aforesaid observations. Order pronounced in open court on 20 th day of September, 2023. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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