Bhavnesh Saini, Judicial Member - This appeal filed by the assessee is directed against the order of the learned Commissioner of Income-tax (Appeals), Patiala dated December 23, 2013 on the following grounds of appeal :
| "1. |
That the learned Commissioner of Income-tax (Appeals) has erred in dismissing the appeal and confirming the addition of Rs. 7,51,499 made by the Assessing Officer as unexplained income from undisclosed sources. |
2. |
That the learned Commissioner of Income-tax (Appeals) has erred in confirming the contention of the Assessing Officer in treating the cash deposits in the bank account as income of the assessee, thereby not giving the benefit of cash withdrawals, which amounts were also used for redeposits in the bank account especially when the Assessing Officer failed to point out any investment out of cash withdrawals from the bank account." |
2. Briefly, the facts of the case are that the assessee has made deposits of Rs. 13,48,838 in the bank account. He has made various withdrawals from the bank account and closing balance at the end of the year was Rs. 77,339 only. The Assessing Officer in the assessment order has given a list of cash deposits in the bank account amounting to Rs. 12,11,499 in total and asked the assessee to explain the source of the cash deposits. The Assessing Officer discussing the evidence on record found certain deposits as explained, however, he has made addition of the balance amount of Rs. 7,51,499 as unexplained.
3. The assessee submitted before the learned Commissioner of Income-tax (Appeals) that the Assessing Officer has looked towards the credit side of the bank account and has totally ignored the debit side from where the withdrawal is there continuously and these are by way for self-cheques and the Assessing Officer has totally ignored the debit side which should be taken into consideration. No other assets were found against the assessee. The assessee has been withdrawing the amount and redepositing and again withdrawing and so on and so forth and the Assessing Officer has failed to consider the debit side. The copy of the bank account was filed in support of the contention. The assessee has further availability of fund on account of receipt received from his father of Rs. 1,50,000 and the amount out of bank withdrawals of Rs. 45,800 (totalling Rs. 1,95,800). It was further submitted that the amount had been rotated during the whole year and agricultural income was also available. The learned Commissioner of Income-tax (Appeals) dismissed the appeal of the assessee. His findings in para 4.2 of the appellate order are reproduced as under :
"4.2 In the counter comment, sent vide letter No. 261 dated September 19, 2012, the Assessing Officer simply relied on the assessment order. I have considered the submissions made. The contention of the appellant is that the withdrawals made in small amounts over a period of time has been rotated in the bank account on regular basis. I am unable to accept the argument as it defies common sense as appellant failed to give any reason for keeping the cash withdrawn on various dates in safe custody for depositing again in the bank account on a later date e.g. the appellant has withdrawn Rs. 5,000 on April 3, 2007, Rs. 1,000 on April 4, 2007, Rs. 7,000 on April 5, 2007, Rs. 1,000 on April 9, 2007, Rs. 1,000 on April 9, 2007 and all these withdrawals are shown as source of cash deposit of Rs. 22,653 on April 9, 2007. I am unable to accept this argument of the appellant as there appears to be no reason as to why the frequent withdrawals made by the appellant were kept with him so long for redepositing the money later on. Therefore, the addition made by the Assessing Officer is confirmed."
4. We have heard the learned representatives of both parties and perused the material available on record.
5. Learned counsel for the assessee reiterated the submissions made before the authorities below and referred to paper book 13, which is cash-flow statement for the year under consideration to show that all the withdrawals were from the bank and sufficient cash was available with the assessee. Therefore, the whole addition was unjustified.
6. On the other hand, the learned Departmental representative for the Revenue relied upon the orders of the authorities below and submitted that the assessee has failed to explain the source of the cash in the bank, therefore, the addition is justified.
7. On consideration of the rival submissions, we are of the view that the matter requires reconsideration at the level of the Assessing Officer. The assessee specifically submitted that he has withdrawals from the bank account, which were redeposited. Copy of the cash-flow statement was filed, which supports the contention of the assessee. The hon'ble Punjab and Haryana High Court in the case of Shivcharan Dass v.CIT [1980] 126 ITR 263/4 Taxman 530 held as under (headnote) :
"Held, that since both the daughters had attained majority at the time when the money was deposited in their names, the amount of Rs. 20,000 was not found mentioned in the books of the assessee nor the same was found to have been deposited in the accounts of the assessee or that of the Hindu undivided family and there was nothing on the record to show that the amount was utilised by the assessee or the Hindu undivided family in any other manner than the one which was represented by the assessee, the onus lay on the Department to show that the explanation offered by the assessee should not be accepted. Further, if the assessee's explanation that the amount represented the same amount as disclosed under the voluntary disclosure scheme was not accepted, the presumption that the amount was from undisclosed sources could be raised only against the major daughter of the assessee and not against the assessee himself. Therefore, it could not be said that the amount was income of the assessee from undisclosed sources."
8. The assessee has stated specifically that the amount was redeposited on withdrawal from the bank and sufficient cash was available. Therefore, it was the duty of the Assessing Officer to examine this fact. Further nothing is brought on record that the amount was utilised by the assessee on withdrawal from the bank account. Considering the facts of the case in the light of the decision of the hon'ble Punjab and Haryana High Court in the case of Shivcharan Dass (supra), we set aside the orders of the authorities below and restored the issue to the file of the Assessing Officer with directions to redecide this issue by giving reasonable sufficient opportunity of being heard to the assessee and the Assessing Officer shall pass a reasoned order on the submissions of the assessee.
9. In the result, the appeal filed by the assessee is allowed for statistical purposes.