Mere making cash withdrawals at one point of time cannot be a sole basis for explaining cash deposit in future.


Mere making cash withdrawals at one point of time cannot be a sole basis for explaining cash deposit in future.

Income from other sources Unexplained investment Assessee filed return of income During assessment proceeding, AO noted that assessee had maintained a bank account from which she withdrew an amount for investment purposes However, as prospect of investment did not materialise, assessee re-deposited same back into same bank account and was duly recorded in her cashbook Assessee had re-deposited a sum in smaller tranches by reason of abundant caution Assessee had claimed deduction u/s 80C Assessee’s CA discovered certain calculation mistakes pertaining to interest income for relevant AY Assessee submitted that there was a bonafide mistake in calculation and there was neither any attempt to conceal nor was any malafide involved Subsequently, assessee suo motu revised her income from other sources so as to rectify calculation error AO found that amount withdrawn by assessee from her bank account was taxable income as unexplained investment u/s 69 Thus, AO issued notice of demand u/s 156 for further payment as income tax CIT(A) held assessment order as valid on assumption that because assessee and her husband took certain home loans, they could not have had withdrawn money for investment purposes and later re-deposited same ITAT confirmed findings of CIT(A) and dismissed assessee’s appeal Held, AO noticed that assessee had raised loans and also withdrawn cash numerous times thereafter which was not needed, if she already had so much cash in hand and had deposited cash in three installments after a period of 8-9 months—AO not accepting her explanation made addition on account of unexplained deposits—CIT(A) held that withdrawal attributed by assessee to opening cash in hand was not actually available with her so as to justify cash deposited CIT(A) noticed that assessee had claimed that amount was withdrawn for making investment and since investment did not materialize, same was re-depositedBut deposit was made in a staggered manner over a period of 3 months As per ITAT, CIT(A) had rightly held that merely making cash withdrawals at one point of time could not be a sole basis for explaining cash deposit in future Assessee was unable to offer to justify cash deposits thus, ITAT upheld the findings recorded by AO and CIT(A) Findings of fact recorded by lower authorities does not warrant any interference Assessee’s appeal dismissed




(2019) 104 CCH 0143 PHHC