Loading judgment…
Facts
The assessee deposited Rs. 53,50,000/- in their bank account. The Assessing Officer (AO) treated this as an unexplained credit under Section 68 and added it to the income. The assessee claimed the funds originated from disclosed income of a previous search and seizure operation and from imprest cash provided to employees.
Held
The Tribunal found that while the assessee had made an attempt to explain the source of the cash deposit, the explanation was not entirely satisfactory, especially concerning the linkage to the disclosed income during the search. However, the Revenue's denial of the assessee's contention was also not fully justified.
Key Issues
Whether the cash deposits made by the assessee in their bank account during the financial year are sufficiently explained as per Section 68 of the Income Tax Act, 1961.
Sections Cited
68, 250(6), 132(4), 143(3), 153(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SHRI SATBEER SINGH GODARA, HON’BLE & SHRI NAVEEN CHANDRA, HON’BLE
The above captioned appeal is preferred by the assessee against the orders dated 22.05.2018, by Ld. CIT(A), New Delhi, u/s 250(6) of the Income Tax Act, 1961 [hereinafter referred to as, “Act”] for A.Y. 2015- 16.
Page 1 of 4 5130/DEL/2018 Brahamputra Infrastructure Ltd 2. The solitary ground raised by the assessee in its grounds of appeal is in respect of addition of 53,50,000/- on account of Cash deposits in bank u/s 68 of the act, 1961:
3. The assessee company filed its return of income on 30.03.2016 declaring a total income of Rs.4,98,23,690/-. The AO found, during the assessment proceeding, that assessee has deposited cash of Rs. 53.50 lakh in the Bank A/c as per AIR report of ITD system. Finding the explanation of the assessee as not acceptable, the AO added the same as unexplained credit u/s 68 of the Act which was confirmed by the CIT(A). Aggrieved the assessee is before us.
The ld counsel of the assessee stated that the assessee had deposited Rs. 53,50,000/- in its bank account during the financial year 2014-15. The fund has deposited out of Income disclosed during the search and seizure operation u/s 132(4) of the Act of Rs. 21.50 crore of during the AY 2011-12 on which tax already been paid and the same was accepted by the department in assessment order 2011-12 u/s 143(3)/153(3) of the Act, 1961. It is further submitted that the assessee is a construction-based company, where the assessee provides its employees with imprest cash for making payments for food and other miscellaneous expense. It is the say of the ld AR that the surplus amount from the imprest account is deposited in the bank.
Page 2 of 4 5130/DEL/2018 Brahamputra Infrastructure Ltd 5. Per contra the ld DR relied on the orders of the AO/CIT(A).
We have heard the rival submissions and have perused the relevant material on record. In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit as cash out of imprest account and the cash out of disclosure made during the search. Although the assessee, prima facie, appears to have discharged its onus of explaining source of cash deposit, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO found no linkages to the cash deposit with the income disclosed during the search. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposit has been made imprest account of employees, cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the cash deposit, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that addition of 10% of the cash deposit amounting to Rs 5.30 lakh would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. The ground of appeal
no 1 to 9 is partly allowed.
Page 3 of 4 5130/DEL/2018 Brahamputra Infrastructure Ltd Order pronounced in the Open Court on 02.02.2026.