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Facts
The assessee filed an appeal against the CIT(A)'s order confirming additions made by the AO. The AO treated cash deposits in the bank account as income from unexplained sources under Section 69A. The assessee explained the source of these deposits with reference to cash in hand, withdrawals, and rental income, especially in light of the demonetization scheme.
Held
The Tribunal found that the assessee had sufficiently explained the sources of the cash deposits, citing the opening cash balance, withdrawals, and rental income. The AO's addition was therefore not justified.
Key Issues
Whether the cash deposits in the bank account were income from unexplained sources, or if their source was adequately explained by the assessee.
Sections Cited
69A
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आदेश/Order
The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [in short referred to as CIT(A)] dated 09.08.2024 relating to A.Y. 2017-18.
The assessee in this appeal has contested the action of the CIT(A) in confirming the addition made by the Assessing -2024 A.Y. 2017-18 2 Officer ( in short ‘the AO’) of Rs.20,12,835/- under Section 69A of the Income Tax Act by treating the cash deposits in the bank account as income from unexplained sources.
At the outset, the ld. Counsel for the assessee has brought my attention to the impugned order of the CIT(A) wherein the Cash Flow Statement furnished by the assessee has been reproduced. The ld. counsel has drawn my attention to the opening balance i.e. cash in hand of Rs.89,850/- as on 01.04.2016. Further, the ld. counsel has drawn my attention to a withdrawal entry of Rs.8 lacs dated 29.09.2016. The ld. counsel has further demonstrated that the assessee during the period had also received rental income of about Rs.3.5 lacs. It has been explained that since the Demonetization Scheme was announced by the Government, therefore, the assessee had to deposit the entire cash in hand including out of withdrawals and rent receipts in the bank account during demonetization period.
The source of the deposits of Rs.20,12,835/-, therefore, has been duly explained by the assessee.
The ld. DR could not rebut the aforesaid factual aspect on the file.
ITA No. 1004/Chd-2024 A.Y. 2017-18 3
In view of this, I do not find justification on the part of the CIT(A) in confirming the impugned addition and the same is ordered to be deleted.
In the result, appeal of the assessee stands allowed.