The judgment emphasizes the importance of providing evidence for financial transactions and the application of Section 69 and 69A of the Income Tax Act in cases of unexplained cash deposits.

SANJIV KHANNA, J.

The present appeal under Section 260A of the Income Tax Act, 1961 has been filed by the legal heirs of Late Dinesh Kumar Jain.

2. The appeal impugns the order dated 16.10.2017 passed by the Income Tax Appellate Tribunal in ITA No.3612/Del/2016 and relates to Assessment Year 2011-2012.

3. The impugned order upholds addition of Rs.27,33,333/- made by the Assessing Officer and affirmed by the Commissioner of Income Tax (Appeals) on account of unexplained cash deposits of Rs.82,00,000/- made on different dates in the joint bank account of the appellant-assessee along with two others.

4. Factum that Rs.82,00,000/- was deposited in cash in the joint bank account on different dates is not disputed and under challenge.

5. Appellant has drawn our attention to the cash flow chart, enclosed as annexure-4 to the appeal, and submits that Rs.1,52,00,000/- was withdrawn in cash from the joint bank account on different dates between 3.5.2010 till 4.1.2011. Rs.82,00,000/- was deposited in cash on different dates between 24.5.2010 till 31.1.2011. Revenue, it is argued, accepts that the appellant and other joint account holders had an over draft facility and the amounts withdrawn were for construction of a building belonging to the three joint account holders and the surplus money, when not required, was re-deposited. Findings of the Income Tax Appellate Tribunal in not accepting the explanation of the appellant are perverse. Our attention is drawn to the judgment of the Gujarat High Court in Uganda Industries Co. v. CIT, (1986) 158 ITR 567(Guj.) and decision of this Court in Sona Electric Co. v. CIT, (1985) 152 ITR 507(Del.).

6. The Income Tax Appellate Tribunal, in the impugned order, has rejected the aforesaid explanation, recording as under:-

“6. We have considered the rival contentions and do not find any merit in this ground of appeal of assessee. It is well settled law that Ld. CIT(A) being the First Appellate Authority has co-terminus powers to that of A.O. Merely because wrong section is mentioned in the assessment order, is no ground to delete the addition. There is a cash deposit in the joint bank account maintained by assessee and others, the source of which is not explained. Therefore, provisions of Section 69/69A are clearly attracted in this case. The Ld. CIT(A) has already taken care of this issue and applied Section 69A of the I.T.Act while confirming the addition on merit. The Hon'ble Allahabad High Court in the case of Jauhari Mal Goel 201 CTR 54 (.All.) held that deposit in the bank account would amount to investment under section 69 of the I. T. Act. Therefore, there is no merit in the contention of the Learned Counsel for the Assessee that no addition could be made on account of cash deposited in the bank account of assessee and others. The contention of the Learned Counsel for the Assessee is, therefore, rejected.

7. As regards addition on merit, the A.O. has specifically noted that assessee could not proved at the assessment stage that out of cash withdrawn, some payments have been made to the contractors/suppliers and balance cash in hand has been deposited subsequently. The assessee did not make any cheque payment for construction. The A.O. asked for the details of project report and details furnished to the bank for utilizing the bank loan. However, no details have been filed before A.O. as to how the cash amount have been used in phased manner for construction in the property. The assessee also failed to provide any details of cost of construction incurred by the assessee and others in the property. Even no bills of purchase of material or any payment to contractor have been produced before A.O. It, therefore, clearly proved that assessee has no evidence at all to explain as to how much amount has been incurred in construction of the property. These facts prove that assessee has no evidence of