IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `SMC-II', NEW DELHI
BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT M EMBER
ITA No. 5283/Del/2014
Assessment Year: 2008-09
Sona Bahi Vs. ITO,
D-810, Ward-22(2),
New Friends Colony, New Delhi
New Delhi
PAN:AAGPB3766J
(Appellant) (Respondent)
Appellant by : K. R. Munjani, Adv
Respondent by : Sh. Manoj Kr. Chopra, Sr. DR
Date of Hearing : 13.07.2015
Date of pronouncement : 16.07.2015
ORDER
This appeal is filed by the assessee against the order dated 20.08.2014 of
Ld.CIT(A), X, New Delhi pertaining to the Assessment Year 2008-09 on the following
grounds:-
"The ld AO has erred on facts as well as in law in making the addition merely
on surmises of Rs.5,25,000/- deposited in Bank even though there is proper
source therefore. Similarly ld CIT(A) has erred on facts as well as in law in
sustaining merely on surmises addition of Rs.3,00,000/-.
2. The facts of the case are given in para 2 of the order of the ld CIT(A), which
are extracted for ready reference:-
"2. The facts of the case are that return of income was filed on 02 -12-2008
declaring an income of Rs.91,910/-. Assessment u/s 143(3) was completed at
an income of Rs.6,16,9107- by making the addition of Rs.5,25,000/- u/s 69A
since the assessee could not discharge its onus regarding depositing the cash
in account.
3. Aggrieved with such order, the present appeal has been filed.
4. The appellant has taken the following grounds of appeal:
"(1) The AO erred in law and facts by increasing income by
Rs.5,25,000/- on account of cash deposit in bank.
(2) The assessee craves leave to add, amend or withdraw any ground
at the time hearing. "
Page 2 of 4
3. Before the first appellate authority the assessee furnished all the details. The
first appellate authority called for a remand report. Thereafter the assessee filed
rejoinder of the remand report. The first appellate authority granted part relief.
4. Further aggrieved the assessee is before us.
5. Heard the ld counsel for the assessee Shri K.R. Munjani, Advocate and Shri
Monoj Kumar Chopra, the ld Departmental representative. The sum and substances
of the submissions of Shri K.R. Munjani is that an amount of Rs.4,78,000/- is
available with the assessee as on 31.03.2007. He also submits that the assessee
maintained books of account and cash flow statement and that they were submitted
before the AO as well as before the ld CIT(A). The ld DR submits that the assessee's
claim is a concocted story and is contradictory. He relied on the order of the first
appellate authority and submitted that there is no justification given on why the
assessee kept cash outside her bank account from December, 2006 to July-August,
2007, when specifically her bank account was full of banking transaction and the
assessee had approximately Rs.50 lacs in investment.
6. After hearing rival contention I am convinced with the findings of the first
appellate authority on this issue. There is no plausible explanation given by the
assessee for having kept cash balance of Rs.4,78,000/- from 9th March 2007 to 23rd
October 2007. There is no proximity of source. When the assessee is operating her
bank account regularly the claim that huge cash balances are kept is strange.
Theory put up by the assessee cannot be believed.
7 The first appellate authority from pages 11 to 13 is as follows:-
"On considering the facts of the case it is observed that the appellant was not
maintaining books of accounts and it is true tha t when the appellant's case
was selected in scrutiny, thereafter only the appellant had prepared sta tement
of cash for F.Y. 2006-07 and balance sheets as on 31-03-2007 and 31-03-
2008. The only evidence in support of balance sheet and cash flow sta tement
are bank accounts which were submitted by the appellant during the
assessment proceedings as well as during the appellate proceedings. Since the
appellant has not produced any other document or evidence which were
already produced before the A.O., the A.O. is not justified in assuming that the
documents furnished by the appellant are additional evidence and hence
should not be accepted under rule 46A of the I.T. Rules, 1962. It is observed
tha t for justifying the available cash of Rs.4,78,000/ - as on 01-04-2007
(opening cash balance), the appellant has furnished a cash flow sta tement
showing that Rs.2,00,000/- each were withdrawn by the appellant as on 01-
12-2006 vide cheque No.141708 and 141709 with Standard Chartered Bank
Page 3 of 4
and again on 09-03-2007, the appellant has withdrawn Rs.1,50,000/- from her
bank account, Bank of Baroda. The appellant was specifically asked as to why
she had withdrawn Rs.1,50,000/- in March, 2006 when she has claimed that
Rs.4,00,000/- were available with her since December, 2006. The appellant
has made the following submissions vide her letter dt. 17-06-2014 as under:
"In regard to your query as to why the money was withdrawn when
Rs,4,00,000/- were already withdrawn, it is submitted from the capital
of appellant it is clear that she belongs to affluent family. Enquiry
revealed tha t she had intention to purchase gadget for which the amount
was withdrawn and further amount was also withdrawn for that
purpose but since she did not like quality, utility and price, it was not
purchased and the money was deposited in bank."
On examining the appellant's reply it is observed that it is a concocted story
forwarded by the appellant which is self -contradictory. On the one hand, the
appellant had the intention to purchase gadgets for which the amounts were
withdrawn but at the same time she changed her mind as she did not like
quality, its utility and price and money wa s deposited in a bank. There is no
justification as to why the appellant was keeping cash away from her bank
account from December, 2006 to July - August, 2007 when her bank account
was full of banking transactions and the appellant had approximately Rs.50
lacs and more investments made in mutual funds and other instruments. The
appellant was regularly making the fixed deposits in the bank for earning
interest income which is evident from the copies of bank accounts submitted by
the appellant. Therefore, the appellant is not fair in forwarding the arguments
tha t such cash withdrawal was meant for purchasing gadgets which
could not be purchased by her in almost 11 months period. The cash flow
statement of the appellant is, therefore, not believable as the amounts
withdrawn in large denominations seem to be utilized by the appellant for some
investments which cannot be established till all the affairs of the appellant
alongwith the affairs of her husband and mother-in-law pertaining to F.Y.
2006-07 are enquired into. However, it is beyond doubt that the story of
making withdrawals for purchasing gadgets and later on questioning their
utility is definitely a concocted story and, therefore, not believable. Therefore,
the claim of the appellant that Rs.4,78,000/- was available with her in the
beginning of the financial year is not acceptable. With this background the
appellant's affairs are examined during the F.Y. 2007-08. It is observed that
Rs.2,00,000/- was withdrawn by the appellant in cash on 18-07-2007 which
the A.O. has presumed tha t the same would have been spent on household
expenses and meeting out other expenses. However, it has been established by
the appellant tha t the appellant's husband has made a withdrawal of
Rs.2,40,000/- for household purposes and appellant's mother-in-law has made
withdrawal of Rs.1,16,545/- and made the payments for the school fee of the
children of the appellant. The withdrawal of Rs.2,00,000/ - on 18-07-2007 was
definitely available with the appellant which was ultimately deposited by her
on 28-07-2007 in her bank account. In view of the above, the source of cash
deposit of Rs. 2, 25,000/- on 28-07-2007 appears to be justified and, therefore,
no addition of Rs.2,25,000/- in appellant's income u/s 69A of the Act is called
Page 4 of 4
for. However, the appellant's argument that Rs.3,00,000/- cash was deposited
on 23-10-2007 out of the cash available with the appellant since beginning of
the financial year is not justified for the reasons elaborated hereinabove. The
AO's action in making an addition of Rs.3,00,000/- in appellant's income
treating the cash deposit made by the appellant on 23-10-2007 as unexplained
is fully justified and the addition of Rs.3,00,000/ - is hereby sustained. The
ground of appeal is partly allowed.
7. We find no infirmity in the factual finding of the first appellate authority and
hence we uphold the same.
8. In the result the appeal of the assessee is dismissed.
Order pronounced in the Open Court on 16th July, 2015.
-Sd/-
(J. SUDHAKAR REDDY)
ACCOUNTANT MEMBER
Dated:16th July, 2015
AKK
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
TRUE COPY
By Order,
ASSISTANT REGISTRAR
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