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Shri Varun Sharma, Prop. of M/s. Sharma Optical & Lens Clinic, III-M/R-13, Nehru Nagar, Ghaziabad 201 001 (U.P.) vs. ITO, Ward 2 (1), Contact Ghaziabad.
April, 17th 2014
                (DELHI BENCH `H' : NEW DELHI)


                           ITA No.49/Del./2013
                      (ASSESSMENT YEAR : 2007-08)

Shri Varun Sharma,                         vs.   ITO, Ward 2 (1),
Prop. of M/s. Sharma Optical & Contact           Ghaziabad.
 Lens Clinic,
III-M/R-13, Nehru Nagar,
Ghaziabad ­ 201 001 (U.P.)

      (PAN : BAPPS9100R)

      (APPELLANT)                                (RESPONDENT)

               ASSESSEE BY : Shri Anil Sharma, Advocate
               REVENUE BY : Shri D. Srinivas, Senior DR



      This appeal filed by the assessee emanates from the order of CIT (A),

Ghaziabad dated 29.10.2012 for the assessment year 2007-08.

2.    The assessee is an individual and doing the business of optical and

contact lens in the name and style of Sharma Opticals & Contact Lens Clinic.

The addition of Rs.2,40,000/- was made on account of cash deposit in the

bank account of the assessee held with Punjab National Bank, Ambedkar

Marg, Ghaziabad on 02.01.2007. The CIT (A) has confirmed the addition by

holding as under :-
                                      2                  ITA No.49/Del./2013

      "      After due application of mind, I find severe loopholes in
      this explanation. Firstly, inspite of A.O. asking as to what were
      these business intentions, the appellant has remained silent and
      has not elaborated any of the purposes for which cash was
      withdrawn. Had the explanation been genuine, the assessee
      would have been able to give some concrete instances and
      explanations. Secondly, it is not convincing that one cash
      withdrawal was followed by another and another although the
      purpose was not getting fulfilled. In other words, it is not a
      case of cash withdrawal re-deposited after a reasonable amount
      of time and again withdrawn for some other purpose. The
      appellant has withdrawn cash chunks without their being any
      indicative pattern of some business intention. Thirdly, there is
      no co-relation of this cash withdrawal to the cash deposit in
      one chunk of Rs.2,40,000/- made after three to four months of
      this cash withdrawal. Fourthly, the cash withdrawal for house
      hold expenses being claimed by the assessee is very inadequate
      and hence there is always a strong likelihood that the cash
      withdrawals were required for house hold and personal
      expenses, and, thus, not leaving anything for redeposit. .

            The anomalies pointed out by the A,O. on page 3 of the
      assessment order are also relevant and valid.

            In view of the above, I agree with the A.O.'s view that
      cash credit of Rs.2,40,000/- is not out of cash withdrawal and
      out of current year's income is upheld. The addition of
      Rs.2,40,000/- is, therefore, confirmed."

3.    Now, the assessee is in appeal by taking the following grounds of

appeal :-

      "1. That the Ld. CIT (A) erred both on facts and in law in
      confirming the addition of Rs.2,40,000/- on the basis of
      surmises and conjectures.
                                      3               ITA No.49/Del./2013

      2.    That the Ld. CIT (A) erred on facts and in law in
      ignoring that the amount of Rs.2,40,000/- added u/s 68 of I.T.
      Act was a cash deposit in the bank account of the Appellant
      and was fully explainable from earlier withdrawals and current

      3.   That on the facts and circumstances of the case, the Ld.
      CIT (A) was not justified in holding the withdrawals for
      household expenses to be very inadequate on the basis of
      assumptions and presumptions.

      4.     Any other grounds"

4.    The ld. AR for the assessee has pleaded that there was a cash

withdrawal immediate prior to this deposit on four occasions and the details

of which are as under :-

             Date of withdrawal            Amount of withdrawal

                   29.07.2006              Rs.45,000/-
                   02.08.2006              Rs.45,000/-
                   21.08.2006              Rs.40,000/-
                   19.09.2006              Rs.32,000/-
                                Total :   Rs.1,62,000/-

The ld. AR also submitted that this amount was withdrawals for business

purposes but the same was later on deposited with the bank account of the

assessee. The CIT (A) was not justified in confirming the addition when the

revenue has failed to give any findings with regard to the use of the cash

withdrawal for any other purpose. He also relied on the decision of ITAT,
                                      4                 ITA No.49/Del./2013

Delhi Bench `C', New Delhi in the case of ITO vs. Ishwar Singh Vats in ITA

No.96/Del/2012 dated 08.02.2013 wherein the ITAT has deleted the addition

by holding that Assessing Officer did not bring out anything on record to

substantiate that assessee has used this money anywhere else. He also relied

on the decision of ITAT, Delhi Bench `E', New Delhi in the case of DCIT vs.

Manish Aggarwal in ITA No.3301/Del/2012 dated 13.12.2013.            He also

pleaded that CIT (A)'s observation for withdrawal of household expenses was

also not based on any evidence it is only a surmise. He pleaded to set aside

the same.

5.    On the other hand, ld. DR relied on the orders of the authorities below

and stated that assessee is not able to state in clear terms regarding the

purpose for which the cash balance was withdrawn. He also submitted that

pattern of withdrawal does not justify the assessee's claim for the purpose of

withdrawal. He relied on the orders of the authorities below.

6.    We have heard both the sides.       The CIT (A)'s finding regarding

inadequate withdrawal for the household expenses is not based on any

evidence. There is no addition made for low household expenses. We hold

that the Assessing Officer has not brought anything on record to show that

cash withdrawn in the immediate preceding few months has been utilized by

the assessee somewhere else for any other purpose. In the absence of the

same, we hold that the assessee was able to explain the source of the cash
                                        5                  ITA No.49/Del./2013

deposit up to Rs.1,62,000. However, for remaining amount, the reliance on

the return of income to explain the source of cash is not convincing.

Therefore, we hold that out of the addition of Rs.2,40,000/-, the assessee is

able to explain the source of Rs.1,62,000/- and the balance amount, i.e.

Rs.78,000/- is held to be unexplained. Accordingly, we uphold the addition

up to Rs.78,000/-.

7.    In the result, the appeal of the assessee is partly allowed.

     Order pronounced in open court on this 11th day of April, 2014.

                Sd/-                                   sd/-
           (DIVA SINGH)                            (B.C. MEENA)
         JUDICIAL MEMBER                        ACCOUNTANT MEMBER

Dated the 11th day of April, 2014

Copy forwarded to:
     4.CIT(A), Ghaziabad.
     5.CIT(ITAT), New Delhi.
                                                                AR, ITAT
                                                               NEW DELHI.
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