Radhey Shyam Agarwal, Jaipur vs Assessee

Jh vkj-ih-rksykuh] U;kf;d lnL; ,oa Jh Vh-vkj-ehuk] ys[kk lnL; ds le{k BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM

vk;dj vihy la-@ITA No. 33/JP/2014 fu/kZkj.k o"kZ@Assessment Year : 2008-09

Shri Radhey Shyam cuke The ITO Agarwal Vs. Ward- 5(2) 62, Poddar Marg Jaipur Burmese Colony, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABDPA 4776 H vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Gargieya, Advocate jktLo dh vksj ls@ Revenue by : Shri Rajesh Ojha, JCIT

lquokbZ dh rkjh[k@ Date of Hearing : 28/04/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 29/05/2015

vkns'k@ ORDER

PER R.P. TOLANI, JM

This is an appeal filed by the assessee against the order of the ld.

CIT(A)-II, Jaipur dated 18-11-2013 for the assessment year 2008-09

raising following grounds.

''1. The impugned additions and disallowances made in the order u/s 143(3) dated 3-12-2010 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted.

2 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

2. The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition of Rs. 6,00,000/- on account of the deposit made on 4-4-207 with the firm M/s. Jai Hanumant, as unexplained income. The addition so made by the AO and confirmed by the ld. CIT(A) being contrary to the provisions of law and facts, the same kindly be deleted.

3. The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition of Rs. 1,00,000/- on account of alleged low withdrawals. The addition so made by the AO and confirmed by the ld. CIT(A) being contrary to the provisions of law and facts, the same kindly be deleted.

4. The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234 & 234D of the Act and as also in withdrawing interest u/s 244A of the Act. The appellant totally denies its liability of charging and withdrawal of any such interest. The interest so charged/ withdrawn, being contrary to the provisions of law and facts, kindly be deleted in full.''

2.1 During the course of hearing, the ld. AR of the assessee did not

press Ground No. 1, hence, the same is dismissed being not pressed.

3.1 Brief facts of the case are that assessee during the course of

relevant period was partner in M/s. Jai Hanumant and M/s. Globe

Transport Corporation. The assessee filed his return of income in Form

No. 3. declaring his income from partnership firm, Short term capital gain

and interest. It was found that the assessee had deposited a sum of Rs.

6.00 lacs in cash in the partnership firm M/s. Jai Hanumant. The AO 3 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

asked for the details of source of deposit, assessee contended that this

amount represented brought forward cash from earlier years lying with

him. In support of this copy of cash book for the current year and

preceding year were filed to show the cash flow. Ld. AO was not

convinced with assessee's reply in behalf of opening cash, besides

assessee had not shown any withdrawal for house hold expenses.

Consequently, following additions were made.

''The perusal of cash flow statement submitted by the assessee in the preceding year also reflects huge inflow and outflow. However, during the year, no such transactions have been reflected. Moreover, the assessee has not produced the books of accounts for the relevant periods and only extracts of cash books and bank books were filed. There was no specific reason with the assessee to hold such use cash in hand stated in the cash flow statement. The practice shown by the assessee is very abnormal. Cash in hand also form part of wealth chargeable to tax as per Wealth Tax Act, 1957 but no return of wealth declaring such cash in hand charged to wealth tax has been filed. Moreover, it is also found that no expenditure has been incurred by the assessee for house hold withdrawals despite the fact that he was the eldest member of his family consisting of self, wife, son, daughter-in-law and others.

Under these circumstances, it could not be seen that the funds withdrawn on 14-06-2006 were available with the assessee to make deposits in the current year after a elapse of almost 10 months. Hence, the source of deposits of Rs. 6,00,000/- made on 4- 4-2007 with his firm M/s. Jai Hanumant stands unexplained and accordingly added to the total income of the assessee. This results in an addition of Rs. 6,00,000/- to the total income of the assessee on substantive basis. The above proposition also derived support from the decision of Hon'ble Court in 218 ITR 508 (All.) in the case of M/s. India Rice Mills vs. CIT.'' 4 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

3.2 Aggrieved, the assessee went in first appeal where additional

evidence was filed on which remand report was called for. The assessee

also filed the rejoinder in this behalf. The ld. CIT(A) confirmed the

impugned additions by following observations

''4.5 I have considered the facts of the case;

assessment order and appellant's written submission. Assessing Officer made addition of Rs. 6 lakhs introduced in cash by the appellant in partnership firm Jai Hanuman. Appellant submitted that source of cash was from his earlier withdrawals and past savings. However, Assessing Officer found that last withdrawal from the bank was in June 2006 whereas cash introduced in the partnership firm in April 2007. There is a gap of 10 months which is quite unlikely. Assessing Officer also mentoned that appellant was nly having ntrest and other income and not doing any busnes and therefore, no regular books of account were kept. Further appellant is an old man who is not supposed to keep such huge cash even from safety angle. Appellant only mentioned that the firm was dealing in real estate and payment in cash was required to be made at time. With this purpose of cash withdrawal from the bank, how can appellant keep the same cash for more than 10 months and introduce the same in the partnership firm. Further appellant has not shown any withdrawal for personal expenses. All these facts clearly indicate that the cash withdrawals from the bank in June 2006 was not at all available with the appellant in April 2007 for introducing in partnership firm.

The claim of the appellant is beyond any preponderance of probability. In such situation, onus is on the appellant to prove that what is improbable has 5 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

happened. When cash withdrawals were made for the purpose of investment in real estate, it is presumed that the same is used for that purpose and the same is not available with the appellant for payment after 10 months. If the time gap between withdrawal and deposit is of a few days, one can still assume that deposits are from withdrawals. For such a wide gap of tie, onus is on the appellant to explain the entire conduct alongwith the necessary evidences. The decisions relied upon by the appellant are in respect of cases where regular books of accounts are kept and time gap is not substantial. Therefore, these decisions do not help the appellant. If appellant makes the claim that he kept the cash withdrawal from the bank for 10 months, onus to establish this claim is on the appellant. This onus can be discharged by giving relevant details of land deals for which cash was withdrawn but not utilized. Further for keeping such huge cash also required details of ongoing deals for which instant cash was needed. Appellant submitted no details and simply claimed that deposit with the firm was out of cash withdrawals from the bank 10 months earlier. Such claim without details and necessary evidence cannot survive. In view of this, I am of the considered view that appellant introduced unaccounted cash in the firm and the source of the same is not from earlier withdrawals from bank. Accordingly, the addition made by the Assessing Officer is confirmed.''

5.5 I have considered the facts of the case; assessment order and appellant's written submission. Assessing Officer found that there was no withdrawal for personal expenses and therefore, he estimated the same at Rs. 1 lakh. Appellant submitted that his sons were meeting all his expenses and they were having sufficient withdrawals to meet these expenses. However, it is difficult to believe that a person who is active and partner in two firms will not require any money for his personal expenses apart from house hold expenses which might have been met by his family members. There are many personal expenses which are required to be incurred by a person who is earning. Therefore, it is difficult to 6 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

believe that appellant did not spend a single penny. I agree with the Assessing Officer that appellant would have at least spent Rs. 1 lakh for his personal expenses. Accordingly, the addition made by the AO is confirmed.''

3.3 Aggrieved assessee is before us, ld. Counsel contends that the main

reason on which the addition of Rs. 6.00 lacs has been sustained is to the

effect that the assessee could not give proper explanation as to how an

amount of Rs. 6.00 lacs was lying at home more so assessee being an old

aged person, it did not meet the preponderance of probabilities. The

assessee maintained its accounts on computer and production of cash

books for two years along with monthly cash flow statement has not been

disputed. Similarly, the withdrawal of cash of Rs. 13.00 lacs on

14-06-2006 from his saving bank a/c no. 75110036311 of Standard

Chartered Bank which was received from S.G. Fiscal has also not been

disputed except the alleged time gap of 10 months holding of cash in

hand at home, assessee being old and alone and no other adverse finding

is given against the assessee. It is pleaded that that assessee was living

alone is basically wrong as he lives with two joint families of his sons

who take care of his old father. Therefore, there is no worth in the

observation that the assessee was alone and could not have kept cash at

home. This being purely on presumption, surmises and conjectures cannot 7 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

override the evidences produced by the assessee in this behalf. Reliance is

placed on following case laws:-

(i) CIT vs. Daulat Ram Rawatmull (1973) 86 ITR 349 (SC)

(ii) CIT vs. Kulwant Rai (2007) 210 CTR 380 (Del.)

(iii) Anand Prakash Soni vs. DCIT (2006) 101 TTJ 97 (Jodhpur.)

(iv) CIT Vs. Smt. P.K. Noorjahan, 237 ITR 570 (SC)

3.4 Apropos house hold withdrawals, it is contended that two sons

were meeting all the household expenses and they were having sufficient

withdrawals. There was no necessity for assessee in this behalf. The

assessee was not required to contribute any share in house hold expenses.

Therefore no withdrawals were shown, the addition is not justified.

3.5 The ld. DR supported the orders of the lower authorities.

3.6 We have heard the rival contentions and perused the materials

available on record. Apropos addition of Rs. 6.00 lacs, the same has been

made mainly relying on the fact that the assessee was an old person and

living alone and there was a time gap of 10 months for keeping the cash

at home which was not possible on preponderance of probabilities. It may

be mentioned that assessee while explaining the low house hold

withdrawals assessee had already submitted before the lower authorities 8 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

that he was living in a joint family of two sons. With these facts on

record, there was no reason for the lower authorities to hold that the

assessee was living alone which could be the reason for any adverse

inference that cash in hand could not be retained by the assessee for 10

months. There is no factual basis in the presumption drawn by the AO

and the ld. CIT(A), besides the assessee may be aged but remained active

in his business affairs. Consequently we see no justification in addition of

Rs. 6 lacs more so when the facts about cash books, cash flow and receipt

of cheque of Rs. 13 lacs from M/s. S.G. Fiscal have not been

controverted. In view thereof, we are unable to uphold the addition of Rs.

6.00 lacs which is deleted. Thus Ground No. 2 of the assessee is allowed.

3.7 Apropos low house hold withdrawals, the assessee is an active

person, earning from two partnership firms. It has been contended that his

two sons have borne the house hold expenses and have sufficient

withdrawals. There is no evidence on record to demonstrate that quantum

of withdrawals by two sons and statement to the fact that their father did

not contribute any house hold expenses. Beside the size of their family

and extent of house hold withdrawals have no evidence on record to hold

that assessee's version is correct. Thus in these facts and circumstances of

the case assessee's explanation is not corroborated by any iota of 9 ITA No. 33/JP/2014 Shri Radhey Shyam Agarwal vs. ITO, Ward- 5 (2), Jaipur

evidence. In view thereof, we hold that an addition of Rs. 1.00 lac on

account of house hold withdrawals has rightly been made by the lower

authorities which is upheld. Thus Ground No. 3 of the assessee is

dismissed.

4.1 The Ground No. 4 of the assessee is regarding charging of interest

u/s 234B and 234D of the Act and also withdrawing interest u/s 244A is

consequential in nature which needs no adjudication.

5.0 In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 29/05/2015.

Sd/- Sd/- ¼Vh-vkj-ehuk½ ¼vkj-ih-rksykuh½ (T.R. Meena) (R.P.Tolani) ys[kk lnL;@ Accountant Member U;kf;d lnL;@Judicial Member

Tk;iqj@Jaipur fnukad@Dated:- 29 /05/ 2015 *Mishra

vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Shri Radhey Shyam Agarwal, Jaipur

2. izR;FkhZ@ The Respondent- The ITO, Ward- 5 (2), Jaipur

3. vk;dj vk;qDr¼vihy ) @ CIT(A)

4. vk;dj vk;qDr@ CIT

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No.33/JP/2014)

vkns'kkuqlkj@ By order,

lgk;d iathdkj@ Assistant. Registrar