IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `H' : NEW DELHI)
BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER
SHRI B.C. MEENA, ACCOUNTANT MEMBER
(ASSESSMENT YEAR : 2007-08)
Shri Varun Sharma, vs. ITO, Ward 2 (1),
Prop. of M/s. Sharma Optical & Contact Ghaziabad.
III-M/R-13, Nehru Nagar,
Ghaziabad 201 001 (U.P.)
(PAN : BAPPS9100R)
ASSESSEE BY : Shri Anil Sharma, Advocate
REVENUE BY : Shri D. Srinivas, Senior DR
PER B.C. MEENA, ACCOUNTANT MEMBER :
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withdrawn.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of time and again withdrawn for some other purpose.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appellant has withdrawn cash chunks without their being any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
"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
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
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.
(DIVA SINGH) (B.C. MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated the 11th day of April, 2014
Copy forwarded to:
5.CIT(ITAT), New Delhi.