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Vaidyaratnam P.S. Varier vs The Commissioner Of Income-Tax on 24 September, 1940

"3.2 Adjudication of ground no.2(c); It is clear from above tables that appellant had sufficient cash withdrawals prior to cash deposits. The law well settled that assessee can show earlier cash receipts or withdrawals from bank account as source of subsequent cash deposits unless the revenue is able to show that the cash so available is used for some other purposes. In this case there is no information that the cash withdrawn was consumed elsewhere. The Karnataka High Court in the case of S.R. Ventakaratnam Vs CIT, Karnataka-I & Others (127 (TR 807) has held that once the assessee discloses the source as having come from the withdrawals made on a given date from a given bank, it was not open to the revenue to examine as to what the Assessee did with that money and cannot chose to disbelieve the plea of the Assessee merely on the surmise that it would not be probable for the Assessee to keep the money unutilized. If the revenue wants to disbelieve the plea of the Assessee then it must show that the previous withdrawal of cash would not have been available with the Assessee on the date of deposit of cash in the bank account, which was not done in this case. The Delhi ITAT on identical issue in the case of Neeta Breja (ITA No.524/Del/2017) held that assessing officer or the learned CIT (A) did not show that above cash was not available in the hands of the assessee or have been spent on any other purposes.
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