SHIVJI BHANJI PATEL,TRICHY vs. ITO, 1 (3), TRICHY

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ITA 760/CHNY/2022Status: DisposedITAT Chennai08 March 2023AY 2017-20185 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that only Rs. 3.35 lakhs of the cash deposits could be explained by the assessee's declared commission and interest income. The remaining Rs. 9.15 lakhs were confirmed as unexplained.

What were the facts?

The assessee deposited Rs. 12.50 lakhs in cash during the demonetization period. The assessee failed to provide adequate evidence to substantiate the source of these deposits before the Assessing Officer and the CIT(A).

What were the issues?

Whether the cash deposits made during the demonetization period were adequately explained by the assessee, and if not, whether they could be added as unexplained income.

Which sections of the Income-tax Act were involved?

Section 69,Section 115BBE,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ /SMC BENCH, CHENNAI

Before: SHRI MAHAVIR SINGH, VICE-

Hearing: 08.03.2023

: Mr. N.Arjunraj, C.A for अपीलाथ"क"ओरसे/ Appellant by Mr.S.Sridhar, Advocate : Mr. S.Chandrasekaran, JCIT ""यथ"क"ओरसे/Respondent by 08.03.2023 : सुनवाईक"तार"ख/Date of hearing 08.03.2023 : घोषणाक"तार"ख /Date of Pronouncement आदेश / O R D E R This appeal filed by the assessee is arising out of order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi vide appeal No. ITBA/NFAC/S/250/2022-23 / 1043797156(1) dated 11.07.2022. The assessment was completed by the Income Tax Officer, Ward-1(3), Trichy for the relevant assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter “the Act”) vide order dated 26.11.2019.

2.

The only issue in the appeal of the assessee is as regards to order of the CIT(A) confirming action of the Assessing Officer in making addition of cash deposits made by the 2 assessee during demonetization period in specified bank notes added by the Assessing Officer u/s.69 r.w.s 115BBE of the Income Tax Act, 1961 (hereinafter ‘the Act’) amounting to Rs.12.50 lakhs.

3.

Briefly stated facts are that the assessee is engaged in trading of timber and earning commission from the same.

During the year under consideration, the assessee deposited cash during demonetization period in specified bank notes to the tune of Rs.12.50 lakhs viz., (i)Rs.10,00,000/- in the KVB account No.1624155000062122 maintained at Tiruvarambur branch and (ii) Rs.2,50,000/- in KVB account no. 1195155000073538 maintained at Trichy Main Branch. The assessee before the Assessing Officer could not produce any evidence to substantiate cash deposits and hence, the Assessing Officer added the same as unexplained money u/s.69A of the Act and taxed the same u/s.115BBE of the Act.

Aggrieved, the assessee preferred appeal before the CIT(A).

4.

Before the CIT(A), the assessee only submitted bifurcation of alleged source of cash deposits as under:- a) Opening Balance : 1,50,000 b) Agricultural income : 1,25,000 3 c) Sundry debtors realized : 6,75,000 d) Timber dealing commission :3,00,000 Total Rs. 12,50,000 Before the CIT(A), apart from the above bifurcation, nothing was produced in regard to agricultural income or sundry debtors realization. As regards sundry debtors realization, only list of sundry advances and interest received was provided. Hence, the CIT(A), confirmed action of the Assessing Officer.

Aggrieved, now the assessee is in appeal before the Tribunal.

5.

I have heard rival contentions and gone through facts and circumstances of the case. Admitted facts are that the assessee deposited cash during demonetization period amounting to Rs.12.50 lakhs in the above stated bank accounts. The assessee’s contention in regard to commission earned on account of timber dealing, amounting to Rs.3 lakhs has already been declared in the return of income and also interest earned on account of sundry debtors realization of Rs.1.35 lakhs, which is included in the return of income can be treated as explanation in regard to cash deposits. But, there is no evidence submitted by the assessee in regard to sundry debtors realization of Rs.5.40 lakhs. Since, the assessee even 4 now before me could not produce any evidence, except list of sundry debtors to prove that money was actually realized from the sundry debtors, the same cannot be accepted, hence, this amount of addition of Rs. 5.40 is confirmed.

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