Imran Sherkhan Vs ITO

Whether cash deposit made by the assessee in his bank account followed by cash withdrawal of higher amount cannot be disputed by the Revenue to bring the same into ambit of tax, without proving that such cash withdrawal was utilized for any other purpose – YES: ITAT

– Assessee’s appeal partly allowed: INDORE ITAT

Whether cash deposit made by the assessee in his bank account followed by cash withdrawal of higher amount cannot be disputed by the Revenue to bring the same into ambit of tax, without proving that such cash withdrawal was utilized for any other purpose – YES: ITAT

 the CIT(A) accepted the fact that assessee was having agricultural income and also sold a piece of agricultural land proceeds whereof was deposited in the bank account of the assessee. It is also not rebutted by the Revenue that before making deposits of sum of Rs.10,65,000/-, the assessee had withdrawn sum of Rs.40,000/-, Rs.5,000/-, Rs.7,000/- and Rs.11,00,000/- from the same bank account. Hence, the cash available with the assessee was higher than the cash deposited. The Revenue has not placed on record demonstrating that these sums were utilized for any other purpose. Therefore, the Tribunal is unable to affirm the finding of the CIT(A) for sustaining this addition as made on the basis that purpose of withdrawal of specific sums was not given. Revenue should have brought some material suggesting that the money as withdrawn from the bank account was used somewhere else and it was not available with the assessee for making deposits. In absence of such facts CIT(A) ought to have accepted the source of deposit of Rs.10,65,000/- on 18.07.2005. Hence, AO is directed to delete this addition. In respect of the remaining addition it is noticed that the CIT(A) has not accepted the opening cash balance of Rs.5,27,432/-. Looking to the fact that the assessee was having agricultural income and other source of income even if the opening balance is considered to be higher at least the assessee would be having cash on hand a sum of Rs.3,00,000/- which appears to be reasonable. Hence, the AO is directed to delete the addition of Rs.3,00,000/- being available as cash in hand. Regarding higher consideration received in cash the Tribunal is of the considered view that onus was on the assessee to prove that the cash was received in addition to sum mentioned in sale deed. Further, the provisions of section 50C would not help as same operate in the different field. The contention of the assessee is therefore rejected. Hence, out of addition of Rs.16,04,000/- sustained by the CIT(A), AO is directed to delete the addition of Rs. 13,65,000/-, and remaining addition of Rs. 2,39,000/- is sustained.

ITA No.1303/Ind/2016