ACIT, KOLKATA vs. SUBHAS KUMAR KEDIA, KOLKATA

ITA 1648/KOL/2024Status: DisposedITAT Kolkata24 April 2025AY 2017-185 pages

AI SummaryN/A

Facts

The assessee's case was selected for scrutiny regarding cash deposits of ₹85,71,100/- in bank accounts for AY 2017-18, after a part of the total cash deposits was declared under IDS-16. The assessee explained that ₹80 lacs represented cash received from M/s Dadi Griha Nirmal Private Limited, which was disclosed to and accepted by the Settlement Commission under Section 245D(4) of the Act. The Assessing Officer, however, treated the entire amount as unexplained income under Section 68 of the Income Tax Act.

Held

The CIT(A) deleted the addition, finding that the assessee had sufficiently explained the source of the cash deposits, including the ₹80 lacs accepted by the Settlement Commission. The CIT(A) also noted the remaining balance was explained through cash available in books. The ITAT upheld the CIT(A)'s order, emphasizing that the Settlement Commission's order had attained finality, thereby preventing double taxation and confirming that the source of the cash deposits was adequately explained.

Key Issues

Whether the addition of unexplained cash deposits under Section 68 of the Income Tax Act was justified when the source of funds was partly declared under IDS-16 and partly accepted by the Settlement Commission under Section 245D(4) of the Act.

Sections Cited

Section 68 of the Income Tax Act, Section 143(1) of the Income Tax Act, Section 245D(4) of the Income Tax Act, Income Declaration Scheme, 2016 (IDS-16)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Ms. Shreya Loyalka, AR

For Respondent: Shri Arup Chatterjee, DR

Hearing: 11.03.2025Pronounced: 24.04.2025

This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 04.08.2023 for the AY 2017-18.

The only issue raised by the Revenue is against the deletion of addition of ₹85,71,100/- as made by the ld. AO u/s 68 of the Act on account of cash deposited in the bank accounts by the assessee.

The facts in brief are that the assessee filed the return of income on 29.10.2017, declaring total income at ₹1,21,90,090/-, which was duly processed u/s 143(1) of the Act. The case of the assessee was selected for limited scrutiny to examine the cash deposit into the bank account during the year. Accordingly, the statutory notices along with questionnaire were issued and served upon the assessee. The assessee

The ld. CIT (A) in the appellate proceedings, allowed the appeal of the assessee after taking into consideration, contention and submission raised by the counsel of the assessee by holding that assessee has duly

“5.3.4 I agree with the contention of the appellant that since M/s Dadi Griha Nirman Pvt Ltd had given cash of Rs 80 lakh to its Director Subhas Kedia, the same has been recorded as such in its balance sheet, which has been filed before the Settlement Commission and accepted as well. The order u/s 245D(4) of the Act was passed by Settlement Commission after considering the manner in which the income was derived and also the manner in which the income earned has been retained by the appellant. The said income was earned in cash and was lying in the custody of its director, Subhas Kumar Kedia. The Settlement Commission after duly accepting the explanations given by Dadi Griha Nirman Pvt Ltd, has settled the application and passed order under sec 245D(4). Further, this order has also attained finality. 5.3.5 Further, the appellant has relied upon the decision of Ahmedabad ITAT in the case of JCIT v. Sanjay H Thakkar dated 20.4.2022, wherein on similar facts, Hon'ble ITAT has granted the benefit of the cash deposited by assessee in his bank account, which was nothing but cash balance of the society and was utilized by the assessee. The relevant extract of the same is given hereunder: However, the order of the settlement commission has reached to the finality wherein the opening cash balance of 50 lakhs was shown by the assessee. Thus, if we deny the claim of the assessee for having received the money from the society, it would lead to the double addition of the same item of the cash receipt which is unwanted under the provisions of law. Firstly, the amount of cash receipt from the society will suffer from the tax in the year under consideration and secondly, the assessee failed to claim the benefit of the higher amount of available cash in hand as on 1st April 2006 before the settlement commission which eventually has already suffered the tax again. Thus, to avoid the double taxation, we are inclined to admit the contention of the assessee that he has received cash from the society which was utilized to deposit the bank accounts. In the case of the appellant also, the fact that cash declared by M/s Dadi Griha Nirman Pvt Ltd, which was lying with the appellant, has attained finality. Thus, I agree with the appellant that there is no reason of not treating the same being deposited by appellant in its bank as a source of deposit as that will result in double taxation of the same money. 5.3.6 Further, the AO has not commented on the explanation of the appellant with regard to the balance deposit of Rs. 7,36,000. The appellant had cash available with him as per its regular books of accounts and out of the same, the cash of Rs. 7,36,000 was deposited. The same was explained to the AO during the assessment proceedings (see table below). The onus was on the AO to find lacuna or discrepancies in the evidences submitted before him, by the appellant. Nothing to that effect has been brought on record by the AO in this regard.