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TMI Blog2024 (5) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... . AO by giving credit towards opening balance. As held in the case of S.R. Venkataratnam [ 1980 (8) TMI 73 - KARNATAKA HIGH COURT ] if assessee states that earlier withdrawal is available to the assessee to redeposit the same into bank account, the credit to that amount cannot be denied without bringing any material on record to suggest that, that earlier withdrawal has been spent by the assessee for some other purpose. Assessee has to get due credit towards the cash withdrawals made by assessee and also rental income collected by assessee in the form of cash to deposit the said amount to assessee s bank account. Accordingly, we delete the addition made towards unexplained cash deposit made into assessee s bank account on various dates during the demonetization period. This ground of assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... by the FY 2015-16. Further, the assessee claimed that Rs. 15,93,595/- was received from identifiable persons i.e renters on his property. During the course of assessment proceedings, the assessee produced confirmations only from two tenants for a sum of Rs. 3,85,800/-. In addition, it was noticed that according to the assessee's own submission, a sum of Rs. 3,30,700/- was received after the date of deposit. The assessee submitted that the cash deposit was out of cash withdrawals. The AO held that the assessee was unable to demonstrate the nexus between the cash withdrawal and the cash deposited. The AO treated opening cash balance of Rs 33,07,869/- and sum of Rs 3,85,000/- as explained and considered rest of amount of Rs 23,07,131/- as unexplained cash deposit and added the same to the income of the assessee. 3.2 During the assessment proceedings, the ld. A.R. for the assessee submitted that the cash deposit of Rs. 60,00,000/- during the demonetization period from 09.11.2016 to 30.12.2016 was out of rented deposits and rental income received in cash. He submitted that the confirmation could not be submitted as the tenants had vacated the premises. It was also submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot furnished proper sources for deposit into bank accounts and any details about how the assessee has kept the earlier withdrawals in hand without spending the same. He relied on the order of the lower authorities. 4. We have heard the rival submissions and perused the materials available on record. The assessee has filed the details bank accounts, showing the cash deposit and withdrawals and details of rent agreements and rental income earned by the assessee and also confirmation from certain tenants. Regarding receipt of rent by cash, confirmation is kept on record in page nos.292 to 293 worked at Rs. 6,51,600/- (Rs.2,41,600/- from Manoj P. Mani & Rs. 3,10,000/- from Ajit Abraham). According to the assessee, he has deposited earlier withdrawals made by assessee and amount received by the tenants to the tune of Rs. 23,07,131/- into assessee's bank accounts during the demonetization period. The assessee submitted that assessee has been regularly withdrawing the cash from the bank account on abundant caution to meet unforeseen expenses relating to the maintenance of assessee's house properties. This practice has been accepted by the ld. AO by giving credit towards opening balance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to show that the assessee has used the earlier withdrawals for his persons purposes and not for redeposit the same in the bank account. Therefore, it has to be presumed that the assessee has withdrawn cash and the same remains to be unutilized for one reason or the other and the cash remained with the assessee and used the same to deposit in the bank account. Similar issue was considered by the Bangalore Benches of the Tribunal in case of Sri. Byarakar Manjappa Veeresh in ITA No.1723/Bang/ 2019. The Tribunal vide order dated 30th January, 2020 remitted the issue to the file of the Assessing Officer with the following observations: - '6. I have heard the rival submissions and perused the material on record. In the present case, as per AIR information reported that the assessee has deposited cash into his saving bank account with Bank of Baroda, Peenya Branch, Bangalore totaling to Rs. 27,45,300. The assessee explained that Rs. 10 lakh deposited with the bank was accepted the A.O. Regarding the balance amount of Rs. 17,45,300, it was claimed by the assessee that the cash deposits were out of earlier withdrawals and also claimed to have agricultural income. It was the plea of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 443/Coch/2019 - order dated 29.11.2019] wherein it was held as under:- "10. We have heard the rival submissions and perused the material on record. In the present case, the dispute is with regard to cash deposit of Rs. 32.5 lakhs into the various bank accounts of the assessee. The main plea of the assessee is that the assessee had withdrawn cash of Rs. 50 lakhs on 26/09/2014. The assessee had withdrawn cash on various dates at Rs. 68 lakhs as narrated in para 5 of this order. 10.1 These amounts were redeposited into Bank accounts on various dates as follows: 02/04/2014 Rs. 3,00,000/- 27/08/2014 Rs. 1,50,000/- 26/09/2014 Rs. 50,00,000/- 11. The Assessing Officer has given credit of Rs. 23.50 lakhs towards cash in hand for depositing it into Bank account of the assessee. The Assessing Officer treated Rs. 28.5 lakhs as unexplained sources. Thus, he treated the following amounts as unexplained cash deposits of the assessee:Rs.3 lakhs Rs. 1 lakh Rs. 28.5 lakhs Total:Rs.32.5 lakhs 11.1 The assessee explained that during the assessment year 2012-13, the assessee had an ailment of cancer and he could not attend to business and financial matters and kept the cash withdrawn from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonably presumed that it is from earlier withdrawals made by the assessee on various dates. Accordingly, we delete the entire addition of Rs. 32.5 lakhs made by the Assessing Officer." 7. In view of the above, I am of the opinion that the Assessing Officer has to examine the fund flow statement of the assessee and to reexamine the issue in the interest of justice. Accordingly, I remit the issue to the file of the A.O. to give due credit towards the amount withdrawn by the assessee and kept idle and redeposited by the assessee into bank accounts.' 7. In view of the above order of the Tribunal in the case of Sri.Byarakar Manjappa Veeresh (supra), I am inclined to direct the Assessing Officer to give due credit to the opening balance of the year and also towards earlier withdrawals, after verifying the books of account of the assessee. With these observations, we remit the issue to the file of the Assessing Officer for fresh consideration." 4.2 Further in the case of Shri Narayana Shibaroor Shibaraya Vs. ITO Ward-3(3)(3) in ITA No.684/Bang/2022 dated 23.11.2022 wherein held as under: "5. I have considered the rival submission. I am of the view that the explanation offered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: "9. I have carefully considered the rival submission. The Hon'ble Karnataka High Court in the case of Smt. P. Padmavathy (supra) clearly laid down that earlier withdrawals of cash from Bank account have to be accepted as available to an assessee to explain a later deposit as source. The Hon'ble Court held that it was not open to the Revenue to contend that the assessee has to explain as to how the cash withdrawn earlier was utilized by an assessee and was still available with the assessee. The decisions cited by the learned DR are contrary to the law laid down by the Hon'ble Karnataka High Court and therefore not binding. I, therefore, hold the past withdrawals as claimed by the assessee from 2013 should be considered as being available to the assessee to explain the source of deposit. We are also of the view that a reasonable quantum of cash available out of past savings should also be considered as being available to the assessee to explain the source of cash deposited in the bank account." 10. I, therefore, set aside the order of the CIT(A) and remand the case to the AO to consider the issue denovo in the light of the observations as made above. 11. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further sums of Rs. 7 lakhs & 8 lakhs were drawn on 23.06.2016 & 11.07.2016 respectively. Thereafter quite a few attempts were made to finalise the property but no deal materialized. Therefore, since the deed could not go through a sum of Rs. 10 lakhs were deposited in bank on 26.07.2016 retaining the balance cash for further attempt for acquisition of property. 12. However, on 08.11.2016, the demonetization was announced and therefore immediately balance cash, a sum of Rs. 21 lakhs were deposited on 23.11.2016." 8. The above reasoning of the assessee for withdrawal of cash and redeposit during the demonetization period cannot be brushed aside as totally false. What is necessary to be examined is whether there is adequate cash withdrawal within a reasonable period prior to the demonetization period and whether the same has been utilized for some other investment (other than redeposit). The admitted fact is that assessee has withdrawn a sum of Rs. 32 lakhs on the below dates which has not been disputed by the AO: Date Cash Withdrawn Name of the Bank 17/06/16 15,00,000 State Bank of India, Channapatna, branch SB A/c. No. 64107664658 23/06/16 7,00,000 State Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.2016 from the State Bank of India, Channapatna Branch. The same was not utilized and the cash was lying with the assessee. The AO has not proved that cash withdrawn by assessee has not been utilized for some other purpose. In other words, the assessee cannot be expected to prove the negative that he had not utilized the cash withdrawal for some other purpose. It was the actual cash in hand lying with the assessee which was subsequently deposited in bank account. As explained above, the source of cash deposit is out of cash in hand available with the assessee which was withdrawn from the bank. The cash withdrawn from bank remained unutilized and was deposited in the bank again. Further, as mentioned earlier, the AO has not brought on record any material to show the utilization of cash withdrawn was for purpose other than the amount deposited in the bank account. 11. On similar facts and circumstances of the case, the Bangalore Bench of Tribunal in the case of Shri Dhruva Mungamuri Vs. ITO, Ward - 5(3)(5), Bengaluru in ITA No.2668/Bang/2019 for Assessment Year 2013-14 (order dated 19.02.2020), had held as follows: "5. I have heard the rival submissions and perused the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such circumstances, due credit has to be given for such withdrawal of cash by the assessee. In my opinion, In my opinion, similar view was taken by the Cochin Bench of the Tribunal in the case of Sri.Mathew Philip v. ITO [ITA No.443/Coch/2019 - order dated 29.11.2019] wherein it was held as under:- "10. We have heard the rival submissions and perused the material on record. In the present case, the dispute is with regard to cash deposit of Rs. 32.5 lakhs into the various bank accounts of the assessee. The main plea of the assessee is that the assessee had withdrawn cash of Rs. 50 lakhs on 26/09/2014. The assessee had withdrawn cash on various dates at Rs. 68 lakhs as narrated in para 5 of this order. 10.1 These amounts were redeposited into Bank accounts on various dates as follows: 02/04/2014 Rs. 3,00,000/- 27/08/2014 Rs. 1,50,000/- 26/09/2014 Rs. 50,00,000/- 11. The Assessing Officer has given credit of Rs. 23.50 lakhs towards cash in hand for depositing it into Bank account of the assessee. The Assessing Officer treated Rs. 28.5 lakhs as unexplained sources. Thus, he treated the following amounts as unexplained cash deposits of the assessee: Rs. 3 lakhs Rs. 1 lakh Rs. 28.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught on record which has not been done in this case. Considering the totality of the facts and circumstances of the case and in view of the discussions above, the cash deposits made by the assessee on various dates should be reasonably presumed that it is from earlier withdrawals made by the assessee on various dates. Accordingly, we delete the entire addition of Rs. 32.5 lakhs made by the Assessing Officer." 5.2 In view of the above, I am inclined to delete the impugned addition." 12. In view of the aforesaid reasoning, I hold that the source of cash deposit is adequately explained and there are enough cash withdrawals to cover the same. Hence, the addition under section 69A is hereby deleted." 4.5 Considering the facts of present case in the light of judgement of Hon'ble Karnataka High Court judgement cited (supra), we are of the opinion that assessee has to get due credit towards the cash withdrawals made by assessee and also rental income collected by assessee in the form of cash to deposit the said amount to assessee's bank account. Accordingly, we delete the addition made towards unexplained cash deposit made into assessee's bank account on various dates during the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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