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Facts
The assessee filed his return admitting total income of Rs. 2,96,680/- for AY 2017-18. The AO noticed a cash deposit of Rs. 11 lakhs in the bank, out of which Rs. 5,78,500/- was claimed as savings and Rs. 3,81,500/- as repayment of loans. The AO made an addition of Rs. 9,60,000/- treating it as unexplained cash deposit.
Held
The Tribunal held that the assessee had provided sufficient evidence, including a cash flow statement, cash book, and confirmation letters from debtors, to explain the cash deposit of Rs. 9,60,000/-. Therefore, the addition made by the AO and confirmed by the CIT(A) was set aside.
Key Issues
Whether the addition of Rs. 9,60,000/- on account of unexplained cash deposit is justified when the assessee has provided sufficient explanation and documentary evidence.
Sections Cited
69A, 115BBE
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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI G. MANJUNATHA, HON’BLE & SHRI K. NARASIMHA CHARY, HON’BLE
Assessment Years: 2017-18 Shri. ABHISHEK Vs. Income Tax Officer, AGARWAL. Ward 12(1), 21-2-929, Flat No 506, Hyderabad. Rameshwar Apartment, Ghansi Bazar, Hyderabad- 500002. PAN: ANAPA1988J (Appellant) (Respondent) Assessee by: Ms. Kiran Bidada and Santhoshi Sharma CAs Revenue by: Shri Srikanth Reddy Y, Sr, AR. Date of hearing: 23.01.2025 Date of pronouncement: 23.01.2025 O R D E R PER MANJUNATHA G. A.M: This appeal filed by the assessee is directed against order of the Commissioner of Income Tax (Appeal), ADDL/JCIT-1, Lucknow, dated 23-09-2024 and relevant to Assessment Year 2017-18.
The brief facts of the case are that the assessee, an individual has filed his return of income for the AY 2017-18 on 31-07-2017 admitting total income of Rs. 2,96,680/-. The case was selected for scrutiny and during the assessment proceedings, the AO noticed that the assessee had deposited cash of Rs. 11 lakhs in Vijaya Bank Charminar Branch, Hyd. On verification of details submitted by the assessee, the AO noticed that Rs. 5,78,500/- is out of savings for which cash flow statement was filed. The Balance Rs. 3,81,500/- is out of repayment of loans given to his relatives for which confirmation from parties were filed. The AO, however, was not satisfied with details filed by the assessee, and made addition of Rs. 5,78,500/- on the ground no details have been filed. The AO had also made an addition of Rs. 3,81,500/- on the ground name and address of parties were not furnished. Thus, the AO made addition of Rs. 9,60,000/- u/s 69A and taxed u/s 115BBE of The Income Tax Act, 1961.
On appeal, the ld. CIT(A) confirmed the addition made by the AO towards cash deposit for Rs. 9,60,000/- u/s 69A r.w.s. 115BBE of the Act.
We have heard both the parties, perused materials on record and gone through orders of the authorities below. The AO did not dispute the fact that the assessee has filed a cash flow statement to prove opening cash balance of Rs. 5,78,500/- as per cash book. In fact, the assessee has filed a cash book and as per the cash book sufficient cash balance is available to explain the cash deposit of Rs. 5,78,500/-. Further, the assessee has filed ITR filed for earlier assessment years. From the details filed by the assessee, we find that the assessee has filed sufficient evidence to prove the source for cash deposit of Rs. 5,78,500/- out of savings from his declared income. In so far as balance cash deposit of Rs. 3,81,500/-, the assessee has filed confirmation letter and identity proof of persons 2 to whom he had given loan and received back in this financial year. From the details, we find that sufficient details have been filed to prove the claim of receipt of Rs. 3,81,500/- from debtors. Therefore, we are of the considered view that the AO is erred in making addition of Rs. 9,60,000/- towards cash deposit into bank account u/s 69A of the Act, as unexplained money and brought to tax u/s 115BBE of the Act. The CIT(A) without appreciating relevant facts, simply sustained addition made by the AO. Thus, we set aside the order of the CIT(A) and direct the AO to delete addition of Rs. 9,60,000/- made u/s 69A r.w.s 115BBE of the Act.
In the result, the appeal filed by the assessee is allowed.