Mohinder Pal Singh v. The DCIT, Circle- 7, Ludhiana
[Citation -2019-LL-0820-33]

Citation 2019-LL-0820-33
Appellant Name Mohinder Pal Singh
Respondent Name The DCIT, Circle- 7, Ludhiana
Court ITAT-Chandigarh
Relevant Act Income-tax
Date of Order 20/08/2019
Assessment Year 2010-11
Judgment View Judgment
Keyword Tags sustenance of addition • documentary evidence • books of accounts • unexplained money • cash deposited
Bot Summary: During the course of assessment proceedings the A.O. noticed that the assessee had deposited cash amounting to Rs. 52,05,000/- in his bank account and asked the assessee to explain the source of cash deposited in his bank account. We have already filed the copy of the ledger account of the assessee wherein the said payments made by the Company are debited to the assessee and the repayments made by the assessee are credited to his account. 23.01.2010 1,40,000 With regard to the same it has been submitted that there ' has been corresponding cash withdrawals from the bank account of the assessee of the same amount Further, it is submitted that the assessee has issued a self cheque to the company on 23.01.2010 and the same was recorded as such in the books of the company on the said date whereas the encashment of the said cheque has been made on 25.10.2010 but the same cannot be denied that such withdrawal has been made from the assessee's account and has not been utilized anywhere else. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and submitted as under: 1.2 The brief facts of the case are that during the relevant assessment year, the assessee has regularly withdrawn cash from his personal bank account and deposited in the bank account of the Company as and when required by the Company and has withdrawn cash from the bank account of the Company and deposited in his personal savings accounts as and when required by him. In one of the reasons of reopening the case of the assessee, it has been alleged that out of the said transactions, there are certain payments amounting to Rs.52,05,000 which have been made by the assessee to the Company, but against which there hasn't been any corresponding withdrawals from the bank account of the assessee. The Ld. CIT(A) after considering the submissions of the assessee observed that the assessee tried to explain that there was a cash withdrawal of Rs. 16,40,000/- on 21/10/2009 however due to inadvertent error the same had been recorded in the books of the company as 12/10/2009 instead of 21/10/2009. 3 to 14 of the assessee s paper book which revealed that the cash in hand on each of the aforesaid dates was more than Rs. 2,00,00,000/-, therefore the explanation of the Ld. Counsel for the Assessee that it does not make any difference whether the cash amounting to Rs. 16,40,000/- withdrawn from the bank was entered on 12/10/2009 or 21/10/2009 in the cash book.


IN INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, SMC CHANDIGARH BEFORE: SHRI. N.K.SAINI, VICE PRESIDENT ITA No. 61/Chd/2019 Assessment Year : 2010-11 Sh. Mohinder Pal Singh DCIT 8-A, Tagore Nagar Circle-7, Ludhiana Ludhiana PAN NO: ADVPS2237F Appellant Respondent Assessee by : Shri Nikhil Goyal, CA Revenue by : Smt. Chandrakanta, Sr. DR Date of Hearing : 16/07/2019 Date of Pronouncement : 20/08/2019 Order PER N.K. SAINI, VICE PRESIDENT This is appeal by Assessee against order dt. 18/09/2018 of Ld. CIT(A)-3, Ludhiana. 2. main grievance of assessee in this appeal relates to sustenance of addition of Rs. 16,40,000/- made by A.O. on account of unexplained money under section 69A of Income Tax Act, 1961 (hereinafter referred to as Act ). 3. Facts of case in brief are that assessee filed his return of income on 27/03/2011 declaring income of Rs. 4,99,500/-. Later on survey was conducted at business premises of M/s Ceigall India Limited and M/s Ceigal Highways. During course of survey copy of allotment letter for Flat No. C- 103, Park View Spa, Sector-14,Gurgaon in name of assessee and Smt. Paramjit Kaur for value of Rs. 1,43,31,250/- dt. 23/09/2009 was found. A.O. reopened assessment under section 147 of Act after recording reasons that income to extent of Rs. 1,60,30,265/- escaped assessment. A.O. asked assessee to furnish his return of income and also come forward to explain source of cash deposited in bank account. Assessee in response to notice issued under section 148 submitted that return originally filed on 27/03/2011 may be treated return filed in response to notice issued under section 148 of Act. 2 4. During course of assessment proceedings A.O. noticed that assessee had deposited cash amounting to Rs. 52,05,000/- in his bank account and asked assessee to explain source of cash deposited in his bank account. Assessee had stated that source of cash received was from M/s Ceigall Builders Pvt. Ltd. and also furnished details of repayment to M/s Ceigall India Ltd., on various dates out of cash withdrawal from his bank account. detail submitted was as under: Date Amount of repayment Remarks (Rs.) 12.10.2009 16,40,000 It is clarified here that said entry has been wrongly posted on 12.10.2009 instead of 21.10.2009 in copy of account of assessee in books of company and there was self-withdrawal of same amount on 21.10.2009 from PNB saving account bearing A/c no. 2406000100117800 15.12.2009 7,25,000 There was self withdrawal of same amount on 15.12.2009 from PNB savings account bearing no. 240600010011 7800 23.01.2010 1,40,000 There was self withdrawal of same amount on 23.01.2010 from PNB savings account bearing no. 24060001001 1 7800 19.02.2010 27,00,000 'There was self withdrawal of same amount on 19.02.2010 from PNB savings account bearing no. 240600010011 7800 5. A.O. asked assessee to show cause as to why aforesaid payments to M/s Ceigall India Ltd. may not be added to his income. In response assessee submitted as under: 1. Your goodself has asked as to why payments made by M/s Ceigal India Ltd. ( Company') for purchase of flat for assessee or for other persona! payments in nature of insurance premium and credit card payments etc. for assessee should not be treated as income of assessee, in this respect, we have already filed detailed reply in form of objections dated October 16, 2017 filed before your goodself. It is again reiterated that said payments are in nature of loans given by company to assessee and have been accordingly recorded in books of accounts of company. We have already filed copy of ledger account of assessee wherein said payments made by Company are debited to assessee and repayments made by assessee are credited to his account. Thus, there is no income accruing to assessee on account of these payments made by company. 2. Your goodself has asked as to why repayments made by assessee to company amounting to Rs.52,05,000 may not be added to income of assessee. In this respect we have already filed before your goodself details of deposits and corresponding withdrawals being made by assessee vide objections dated October 16, 2017 and copy of bank statement duly signed and stamped by bank vide reply dated November 15, 2017. Thus, there are corresponding withdrawals for every cash repayment and moreover, assessee has not utilized said withdrawals for his own use. date-wise explanation of sources of cash as required by your goodself is provided as under:- 3 Date Amount Remarks 12.10.2009 16,40,000 With regard to same it has been submitted that there has been corresponding cash withdrawals from bank account of assessee on 21.10.2009 and it is to be appreciated that there has been inadvertent error of recording date in books of company as 12.10.2009 instead of 21.10.2009 but same cannot be denied that such withdrawal has been made from assessee's account and has not been utilized anywhere else,- 15.12.2009 7,25,000 There is clear cash-withdrawal mentioned In bank statement on same date and of same amount. Further, it is clarified here that bank withdrawal on 15.12.2009 amounting to Rs.725000 was actually self- withdrawal made by one of company's employee namely Rakesh Bhandari and thus, on particulars of bank statement narration was written as Rakesh Bhandari even if same was actually cash withdrawal. This fact have been acknowledged by bank itself vide certificate dated 16.11.2017 enclosed herewith as Annexure-. Sometimes, it is very much practice that name of person making self-withdrawal is mentioned by bank in their system and thus, source stands explained. 23.01.2010 1,40,000 With regard to same it has been submitted that there ' has been corresponding cash withdrawals from bank account of assessee of same amount Further, it is submitted that assessee has issued self cheque to company on 23.01.2010 and same was recorded \ as such in books of company on said date whereas encashment of said cheque has been made on 25.10.2010 but same cannot be denied that such withdrawal has been made from assessee's account and has not been utilized anywhere else. 19.02.2010 27,00,000 There is clear cash withdrawal mentioned in bank statement on same date and of same amount. Furthermore, your goodself during last hearing have called for evidence to justify that withdrawal of Rs. 27,00,000 made on 19.02.2010 was actually rectified entry made by bank which was wrongly debited as Rs. 3,00,000 instead of Rs. 30,00,000/-. With regard to same we are filing before your goodself certificate (as enclosed above) issued by bank acknowledging fact that cash payment of Rs. 30,00,000 has been mistakenly debited by Rs. 3,00,000 and in order to rectify same bank has again manually debited assessee s account with Rs. 27,00,000. 6. After considering above submissions of assessee, A.O. observed that company M/s Ceigall India Ltd. had shown entry of Rs. 16,40,000/- in its books of account on 12/10/2009 where as assessee had withdrawn this amount on 21/10/2009. A.O. held that assessee could not substantiate source of repayment of Rs.16,40,000/-. He therefore treated same as unexplained money and added to income of assessee under section 69A of Act. 4 7. Being aggrieved assessee carried matter to Ld. CIT(A) and submitted as under: 1.2 brief facts of case are that during relevant assessment year, assessee has regularly withdrawn cash from his personal bank account and deposited in bank account of Company as and when required by Company and has withdrawn cash from bank account of Company and deposited in his personal savings accounts as and when required by him. same has been duly disclosed in books of accounts maintained by Company. In one of reasons of reopening case of assessee, it has been alleged that out of said transactions, there are certain payments amounting to Rs.52,05,000 which have been made by assessee to Company, but against which there hasn't been any corresponding withdrawals from bank account of assessee (Copy of said reasons reproduced on Pages 4-8 of assessment order). 1.2 During course of assessment proceedings, assessee duly furnished sources of said repayments backed by copies of relevant bank statements depicting corresponding cash withdrawals. (Reproduced on pages 21-23 of assessment order) said sources of cash deposit was accepted, however, there was one particular repayment amounting to Rs. 16,40,000 which even though has corresponding withdrawal from bank account of assessee, however, was recorded on different date in books of accounts of Company and thus, was not accepted by Ld. AO. 1.3 With regard to same, At outset it is submitted that sources as filed during course of assessment proceedings also includes relevant extract of bank statement of savings account of assessee from which there was cash withdrawal of Rs. 16,40,000 and same was withdrawn on 21.10.2009, however, due to inadvertent error same has been recorded in books of company as 12.10.2009 instead of 21.10.2009. Therefore, it is not case that there isn't any corresponding cash withdrawal of said amount from bank account of assessee but it is only because of one mistake of recording of date, because of which Ld. AO did not accept source of said repayment. 1.4 Further, it is submitted that assessee is regular and independent income tax assessee filing his return of income from past many years. sources of income shown by assessee in his return of income from said many years are Salary from Ceigall Builders Pvt. Ltd., capital gains or income from other sources and same has been regularly accepted by department. Thus, when there are no other sources of income from which assessee earns his income, then source of said cash repayment cannot be other than said self-withdrawal made by assessee and moreover, when there are regular corresponding withdrawals of cash of same amount and when there is fixed modus operandi which is prima facie clear from bank statements filed before Ld. AO. It is submitted that AO has himself tabulated in assessment order that during year under consideration, total cash withdrawn by assessee from company is Rs. 58.05 lakhs which has been correspondingly deposited in bank account of assessee and on other hand, there are total cash withdrawals of Rs. 82.07 lakhs from bank account of assessee which are then recorded in books of company as repayment and deposited in its branch account. Moreover, we are also enclosing before your goodselfthe cash book of Company for month of October 2009, from perusal of which it is clear that Company has sufficient cash in hand in its books of accounts during month and Company does not need to intentionally record any entry before date of actual cash withdrawal which makes it clear that it was merely typographical error. Thus, there cannot be possibly any reason of -withdrawing such substantial amount for utilization of same for any other purpose, specially when no such purpose has been noticed by Ld. AO during assessment proceedings. 5 1.5 Therefore, on basis of above, it is clear that impugned cash withdrawal is similar to other cash withdrawal made by assessee from his own bank account and recorded in books of accounts of Company which was also of same amount and which has been accepted by Ld. AO during assessment proceedings. However, due to typographical error same was recorded in books of Company on 12.10.2009 instead of 21.10.2009 and thus, it is humbly requested before your goodself that addition made on account of said cash withdrawal deserves to be deleted and oblige. 7.1. Ld. CIT(A) after considering submissions of assessee observed that assessee tried to explain that there was cash withdrawal of Rs. 16,40,000/- on 21/10/2009 however due to inadvertent error same had been recorded in books of company as 12/10/2009 instead of 21/10/2009. Ld. CIT(A) observed that he was unable to understand direct link with cash withdrawal from bank account on 21/10/2009 and nexus of claim of assessee of getting same cash deposited in books of accounts on 12/10/2009. She also observed that frequent cash withdrawn and deposit of same money getting debited in bank account vice versa has no direct documentary evidence of being same money. She therefore sustained addition made by A.O. 8. Now assessee is in appeal. 9. Ld. Counsel for Assessee reiterated submissions made before authorities below and further submitted that assessee was having sufficient cash balance in hands on 12/10/2009 and that even on all other dates closing balance from 01/10/2009 to 23/10/2009 was more than Rs. 2,00,00,000/- on each date. However, inadvertently withdrawal for Rs. 16,40,000/- was wrongly recorded on 12/10/2009 instead of actual withdrawal from bank account on 21/10/2009. It was further stated that since assessee was having more than Rs. 2,00,00,000/- cash in hand always during period from 01/10/2009 to 23/10/2009, therefore, whether entry could be recorded on 21/10/2009 or on 12/10/2009 it would not have been made any difference as more than sufficient cash was always available with assessee. reference was made to page no. 3 to 14 of assessee s paper book which is copy of cash books for aforesaid period. 10. In her rival submissions Ld. Sr. DR strongly supported orders of authorities below and further submitted that assessee had made withdrawal from bank account on 21/10/2009 but it was recorded in 6 books of accounts on 12/10/2009, therefore receipt of cash on 12/10/2009 was not fully explained, as such A.O. rightly made addition and Ld. CIT(A) was justified in sustaining same. 11. I have considered submissions of both parties and carefully gone through material available on record. In present case it is not in dispute that assessee was having sufficient cash in hand from 01/10/2009 to 22/10/2009, copy of which is evident from copy of cash book placed at page no. 3 to 14 of assessee s paper book which revealed that cash in hand on each of aforesaid dates was more than Rs. 2,00,00,000/-, therefore explanation of Ld. Counsel for Assessee that it does not make any difference whether cash amounting to Rs. 16,40,000/- withdrawn from bank was entered on 12/10/2009 or 21/10/2009 in cash book. It is also not in dispute that assessee had withdrawn amount of Rs. 16,40,000/- from bank account on 21/10/2009 and on said date there is no entry in cash book of assessee but same amount has been entered on 12/10/2009 in cash books and it is not case of A.O. that amount withdrawn by assessee from bank account was utilized elsewhere therefore explanation given by assessee that inadvertently entry was made on 12/102009 instead of 21/10/2009 appears to be plausible. I therefore, by considering totality of facts deem it appropriate to delete addition made by A.O. and sustained by Ld. CIT(A). 12. In result, appeal of Assessee is allowed. (Order pronounced in open Court on 20/08/2019 ) Sd/- ( N.K. SAINI) VICE PRESIDENT AG Date: 20/08/2019 Copy of order forwarded to : 1. Appellant 2. Respondent 3. // CIT 4. CIT(A) 5. - 4 , & 4 , 7 DR, ITAT, CHANDIGARH 6. Guard File Mohinder Pal Singh v. DCIT, Circle- 7, Ludhiana
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