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Facts
The assessee filed an income return for AY 2017-18, which was processed under section 143(1). The case was selected under CASS for verification of high-value cash deposits. The assessee explained deposits totaling Rs. 14,80,000, out of which Rs. 9,42,000 were from withdrawals. For the remaining Rs. 5,38,000, the assessee claimed it was from agricultural income and client payments for self-assessment tax.
Held
The Tribunal found that the assessee could demonstrate the source of Rs. 3,92,000. While the assessee explained some cash received from his uncle, he failed to demonstrate the availability of the remaining Rs. 48,000 from his uncle. Therefore, Rs. 48,000 was sustained as unexplained cash deposit.
Key Issues
Whether the assessee sufficiently proved the source of cash deposits in his bank account, and if not, whether the addition made by the Assessing Officer is justified.
Sections Cited
143(3), 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A ‘ Bench, Hyderabad
Before: Shri Laliet Kumar & Shri Manjunatha, G.
(िनधा�रण वष� / Assessment Year: 2017-18) Shri Balineni Kishore Vs. Income Tax Officer Babu, Vijayawada Ward 14(2) PAN:ASQPB9632D Hyderabad (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Advocate A.V. Raghuram राज� व �ारा/Revenue by:: Shri B Naveen Kumar, DR सुनवाई की तारीख/Date of hearing: 03/02/2025 घोषणा की तारीख/Pronouncement: 04/02/2025 आदेश/ORDER Per Laliet Kumar, J.M This appeal filed by the assessee is directed against the order dated 18/11/2024 of the learned CIT (A)-/ADDL/ JCIT(I)-10 Mumbai, relating to A.Y.2017-18.
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A) in sustaining the disallowance made by the Assessing Officer u/s 143(3) of the I.T. Act, 1961.
Facts of case, in brief, are that the assessee filed the e- return of Income A. Y. 2017-18 on 31/07/2017 admitting income at Rs.5,22,840/-. The said return was processed under sec.143 (1) of the I. T. Act. Subsequently, the case was selected under ’CASS’ to verify the ‘high value cash deposits made during the year’. For the purpose of assessment, statutory notices under sec.143 (2) and 142(1) were issued to the assessee through ITBA asking the assessee to furnish copies of Return of Income for the A.Y.2017-18, copies of all the bank accounts held by the assessee during F.Y.2016- 17, details of all credits appearing in the bank accounts and sources for the cash deposits made in the bank accounts for the financial year 2016-17. The assessee was also asked to explain the nature of business carried, cash flow statement for the year 2016-17. In response, the assessee submitted the copies of bank account statements maintained with Axis Bank, Vijaywada, Andhra Pradesh and State Bank of India, NRI Branch, Vijaywada during the F.Y.2016-17 along with copy of return of income for the A.Y.2017-18. With regard to the nature of business, the assesee submitted that he is a Chartered Accountant working as General Manager- Accounts and Finance in Lingamaneni Landmarks Developers Private Limited, Vijaywada and also practicing part time consultancy for taxation and accounts. The assessee stated that total deposits made during the demonetization were Rs. 3,40,000/- which were out of his savings and other credits during the year were out of the cash withdrawals made out of his other bank account. The assessee was asked to submit the sources for the total cash deposits made in the bank a/c during the whole year of F.Y 2016-17. In reply,
Page 2 of 5 the assessee submitted that the total cash deposits made during the year are Rs. 14,80,000/- out of which Rs. 9,42,000/- were deposited out of cash withdrawals. For the balance of Rs. 5,38,000/-, he stated that these amounts were received from B. Chinamma and R. Krishna Murthy out of their agricultural income and same were deposited by clients for the payment of self-assessment tax. Since, the assessee did not submit any supporting evidence for these receipts, he Assessing Officer treated this amount of Rs. 5,38,000/- as his unexplained cash deposits and added to the income returned.
3. Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT (A) who rejected the contention of the assessee and dismissed the appeal of the assessee.
Aggrieved by the order of the learned CIT (A), the assessee is in appeal before the Tribunal.
The learned Counsel for the assessee submitted that in response to the statutory notices u/s 143(2) and 142(1) of the I.T. Act, 1961, the assessee submitted Return of Income along with two Bank Statements and statement of fact & receipts and payments accounts. It is the submission of the learned Counsel for the assessee that in the Financial Year 2016-17, the assessee deposited cash into axis bank of Rs 14,80,000 (Fourteen Lakhs Eighty Thousand) out of withdrawal from State Bank of India and savings from his earnings in previous years. Thus, he prayed that Page 3 of 5 the addition so made by the Assessing Officer and upheld by the learned CIT (A) should be deleted.
On the other hand, the learned DR relied upon the orders of the authorities below.
We have heard the rival contentions and perused the available material on record. Before us, the assessee was able to demonstrate the availability of cash from his mother Smt. Balineni Chinamma to the extent of Rs.2,96,000/- and further the assessee was also able to demonstrate that he has received Rs.94,000/- as cash for depositing the advance tax from his clients. The assessee is a professional as a Chartered Accountant and was able to demonstrate the availability of Rs.3,92,000/- out of the amount confirmed by the Assessing Officer to the extent of Rs.5,38,000/-. Thus, the assessee was able to demonstrate the valid source of Rs.3,92,000/- out of the amount of Rs.5,38,000/-. We also found that the assessee has given the explanation for the remaining amounts which was received by the assessee from his uncle Shri Ravipudi Krishna Murthy. In our considered opinion, an equitable and balance view is required to be taken by the Bench whereby the assessee sought to explain the availability of cash from his uncle for an amount of Rs.1,48,000/-. Thus, we found that though the assessee was able to demonstrate the availability of cash of Rs.1.00 lakhs from his uncle, however, he failed to demonstrate the remaining availability of cash from his uncle amounting to Rs.48,000/-. Accordingly, this amount of Page 4 of 5 Rs.48,000/- is sustained and the remaining amount is deleted. We order accordingly.
In the result, appeal filed by the assessee is partly allowed.