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Facts
The assessee challenged an addition of Rs. 16,22,500/- made by the Assessing Officer (AO) on account of unexplained cash deposits in the bank account. The assessee's claim that the deposits were out of earlier withdrawals was not substantiated with necessary evidence before the CIT(A), leading to the dismissal of the appeal.
Held
The Tribunal noted that while the assessee claimed the deposits were from earlier withdrawals, the bank statements showed multiple entries of deposits and withdrawals. It was unclear if deposits were directly from withdrawals. Therefore, the matter was restored to the AO for fresh examination of evidence.
Key Issues
Whether the Assessing Officer was justified in making an addition for unexplained cash deposits without proper examination of evidence regarding the source of funds, specifically if they were out of earlier withdrawals.
Sections Cited
143(3), 68
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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Sanjay Garg
आदेश/ORDER The present appeal has been filed by the Assessee against the order passed by the Learned Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)’] dated 10.07.2024 arising out of the order passed u/s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) relevant to the Assessment Year 2017-18.
The assessee in this appeal has agitated against the deduction of addition of Rs. 16,22,500/- made by the Assessing Officer on account of unexplained cash deposits in the bank account of the assessee.
An application for adjournment has been placed on record on behalf of the assessee. A perusal of the case file records show that identical adjournments have been filed by the assessee time and again. Under the circumstances, it can be gathered that the assessee is filing adjournment applications without any valid cause/reason, therefore, the adjournment request filed on behalf of the assessee is hereby rejected and I proceed to decide the appeal after hearing ld. Departmental Representative and going through the records.
During the assessment proceedings, the Assessing Officer noticed that the assessee during the year had made cash deposits of Rs. 16,22,500/- in his bank account. He asked the assessee about the source of the said deposits. However, the assessee did not file any reply to the notices issued by the Assessing Officer. Under the circumstances, the Assessing Officer held that the assessee has nothing to say regarding the source of said deposits. He treated the said deposits as income of the assessee from undisclosed source and made the impugned addition u/s. 68 of the income Tax Act.
Before the ld. CIT(A), the assessee pleaded that the aforesaid deposits were out of the earlier cash withdrawals from his bank account, however necessary evidences and documents in support of the aforesaid pleadings were not furnished. Therefore, the CIT(A) dismissed the appeal of the assessee.
Being aggrieved by the said order of the CIT(A), the assessee is in appeal before this Tribunal.
The assessee has placed a paper book on the file wherein the copy of the bank statements etc. have been filed. The main plea of the assessee in this case is that the amount of cash deposits of Rs. 16,22,500/- was out of the earlier withdrawals. However, a perusal of the copy of the saving bank would show there are multiple entries of deposits and withdrawals. There may be instances wherein cash withdrawals have been re-deposited and there may be instances where the deposits would show to have not been made out of withdrawals. I, therefore, restore the matter to the file of Assessing Officer to examine the contentions of the assessee from the documents/evidences furnished by the assessee including the bank statements and thereafter pass the order afresh in accordance with law.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.