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Facts
The assessee's appeal is against the order of the NFAC which upheld the addition of Rs. 12,10,000 as unexplained income, Rs. 42,00,000 as salary, and Rs. 16,30,000 as interest income. The addition of Rs. 5,50,000 was made under 'Other Sources' as 'Contractual Receipt'.
Held
The Tribunal set aside the addition of Rs. 12,10,000 and Rs. 5,50,000 to the Assessing Officer for verification. The additions of Rs. 42,00,000 and Rs. 16,30,000 were sustained based on the assessee's unequivocal submissions.
Key Issues
Whether cash deposits made from prior withdrawals are unexplained income, and whether contractual receipts reflected in Form 26AS, belonging to a private limited company, can be added to the assessee's income.
Sections Cited
147, 144, 69A, 26AS
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, DELHI
Before: MS. MADHUMITA ROY & SHRI KHETTRA MOHAN ROY
The instant appeal, preferred by the assessee is directed against the order dated 17.11.2022 passed by the Ld. National Faceless Appeal Centre (NFAC), Delhi, arising out of the Assessment Order dated 10.12.2019, passed by ACIT, Circle-58, New Delhi, under Section 144 Rajeev Kaushik (AY: 2014-15) r.w.s 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for the Assessment Year 2014-15.
2. The assessee has submitted written submission which is reproduced as under:
“1. As per para 7.1 of NFAC Order, cash deposits of Rs. 12,10,000 made during the entire Financial Year 2014-15 have been added as unexplained income under Section 69A.
The facts of the case reveal that cash deposits were made on various dates during the financial year in the ordinary course of business, involving routine cash withdrawals and subsequent deposits. However, the assessing authority has treated these deposits as unexplained income under Section 69A, without duly appreciating the corresponding cash withdrawals and the nature of regular business transactions. A. The records reflect that cash withdrawals of Rs. 3,00,000 on 09.11.2013 and Rs. 3,10,000 on 23.11.2013 were made for business purposes; however, as a significant portion of the expenses was incurred through banking channels, an amount of Rs. 2,00,000 was redeposited on 11.12.2013, which, despite being explainable in light of the prior withdrawals, was treated as unexplained income under Section 69A. B. The statements on record indicate that a cash withdrawal of Rs. 25,000 was made on 10.07.2013 for business-related expenses, and the unutilized amount of Rs. 5,000 was redeposited on 18.07.2013. However, this redeposit was treated as unexplained income in the form of a cash deposit under Section 69A, without proper consideration of the source and nature of the transaction.
Further, cash deposit of Rs 5,000 on 07.06.2013 was out of cash in hand, which were considered as unexplained income in the form of cash deposit. C. Similarly, an amount of Rs. 50,00,000 was withdrawn from the bank on 12.01.2012 for proposed capital investment. However, due to unforeseen and unfavorable circumstances, the intended investment could not be materialized. Consequently, the unutilized cash was redeposited in parts - Rs. 35,00,000 and Rs. 4,00,000 were deposited either in the same month or the following month, and a further sum of Rs. 10,00,000 was deposited on 02.04.2013 upon final cancellation of the Rajeev Kaushik (AY: 2014-15) investment deal. Despite the clear trail of transactions, these deposits were treated as unexplained income under Section 69A, without adequate consideration of the source and context.
To summarize, all the cash deposits in question originated from prior cash withdrawals made from the bank for legitimate business purposes. The amounts redeposited represent unutilized balances from those withdrawals. At no point did any of the cash deposits represent income from unexplained sources.
Therefore, it is respectfully submitted that the addition of Rs. 12,10,000 as unexplained income under Section 69A is unjustified and may kindly be deleted.
As per para 7.2 of NFAC Order, An amount of Rs. 42,00,000, representing salary income, has been added to the total income during the assessment.
I hereby submit that I received salary income amounting to Rs. 42,00,000 from Vishakha Facility Management Private Limited during the relevant financial year. Although the return of income was not filed due to the negligence of my consultant, I now voluntarily accept this amount as my taxable income and offer it for taxation during the course of the assessment proceedings. I respectfully request that the TDS reflected in my Form 26AS be allowed as credit against my tax liability.
3. Paragraph 7.3 of the NFAC Order refers to the addition of interest income amounting to Rs. 16,30,000 to my total income during the assessment proceedings.
I hereby accept and agree that the interest income of Rs. 16,30,000 added to my income is correct, and I offer the same for taxation.
I now respectfully request that the Tax Deducted at Source (TDS) reflected in my Form 26AS be allowed as a credit against my tax liability.
4. Further, as per paragraph 7.3 of the NFAC Order, an addition of Rs. 5,50,000 was made under the head 'Other Sources, and the nature of the income is described as 'Contractual Receipt' in the order.
This receipt is not the actual receipt in my bank account. This and other income of contractual nature is wrongly reflected in my 26AS wherefrom this income is added as my income in the order. The fact was these were business of "Vishakha Facility Management Private limited". All the amounts including this Rs.5,05,000 were paid in The Bank Account of Private limited company. But TDS were wrongly deposited on my Pan number reflecting the corresponding income and TDS in my 26AS. All these incomes were shown as income of the private Limited company and assessed for these incomes. I requested the ESI and PF authorities for Rajeev Kaushik (AY: 2014-15) correction of my 26AS entries. I have not claimed these incomes reflected in 26AS as my income and not claimed the corresponding TDS as my TDS anywhere. Actual reflected income in my 26AS is much more than 5,05,000, which are correctly not considered. Copy of my related 26AS is annexed below for your kind consideration. Therefore, this addition of Rs. 5,05,000 may be deleted. Similarly, this addition may also be deleted as the other irrelevant entries are not considered but reflected in my 26 AS.”
It appears that there was no compliance before the lower authorities at any point of time. Accordingly, the assessee has also expired and represented by his legal heir Anita Kuashik (wife). We now take up the matter ground wise:
Cash deposit of Rs.12,10,000/-:
The bank statements were never produced before the Assessing Officer and there is no application under Rule 29 for admission of additional evidence. For the sake of natural justice and fair play the matter is being set aside to jurisdictional Assessing Officer to verify the issue after giving proper opportunity to the assessee, keeping in mind the attending circumstances.
Salary of Rs.42,00,000/-:
In view of the unequivocal submission of the assessee the addition is sustained.
Interest Income of Rs.16,30,000/-:
In view of the unequivocal submission of the assessee the addition is sustained.
Rajeev Kaushik (AY: 2014-15)
Income from other sources of Rs.5,50,000/-:
In view of the submission the matter has been set aside to the file of the jurisdictional AO to verify the facts.
With this relevant directions jurisdictional AO is directed to reframe the assessment after giving proper opportunity to the assessee in accordance with extant provision of the Act.
In the result, the appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the open court on 06.06.2025