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Facts
The revenue appealed an order by the CIT(A) that deleted an addition made by the AO. The AO had treated cash withdrawals totaling Rs. 2,11,40,000/- as unexplained expenditure under Section 69C and taxed it under Section 115BBE. The assessee was engaged in a money exchange business.
Held
The Tribunal held that the CIT(A) correctly concluded that the cash withdrawal could not be treated as unexplained expenditure under Section 69C. The reopening of assessment by the AO was done without proper verification under Section 148A and by invoking incorrect provisions.
Key Issues
Whether cash withdrawals from a bank can be treated as unexplained expenditure under Section 69C and taxed under Section 115BBE when the assessee is engaged in a money exchange business. Whether the reopening of assessment under Section 148A was valid.
Sections Cited
144, 147, 69C, 115BBE, 148A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2018-19 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 03-09-2024 in the matter of an assessment framed by Ld. AO u/s 144 r.w.s. 147 of the Act on 18.02.2024. The revenue has allowed the appeal by deletion of addition of Rs.2,11,80,491 Lacs as made by Ld. AO in the assessment order. Having heard vehement arguments and upon perusal of case records, the appeal is disposed-off as under.
The perusal of the assessment records shows that the assessee has filed the returns of income for the assessment year 2018-19. It is concluded that the assessee had made cash withdrawal of Rs. 2,11,40,000/- from Union Bank of India that the assessee had commission income as commission income. In the absence of any unexplained expenditure, learned AO added that the cash wiithdrawa; of Rs. 2,11,40,000/- as unexplained expenditure under section 69 C and taxed as per Section 115BBE. The income and commission income was assessed under the head "Income from Other Sources". The findings of the ld. CIT(A)) had contained in the appeal.
The Ld. CIT(A) had concluded that the withdrawal from the Bank could not be treated as unexplained expenditure u/s 69C. In the remand order, learned AO had confirmed that the assessee was engaged in the money exchange business on commission basis and earned commission income. Considering the facts, the cash withdrawal could not be allowed as explained expenditure under Section 69C. Ld. CIT(A) concluded that the cash withdrawal was only Rs.1,05,70,000/- and on the basis of some information pushed into the Portal that learned AO had reopened the assessment blindly on the basis of some information pushed into the Insight Portal without carrying out any verification u/s 148A and mechanically recorded the reasons for reopening the assessment. Accordingly, the impugned addition was made invoking wrong provisions of the Income Tax Act by recording incorrect facts and without carrying out any further verification of additions made u/s 148A of the Act. The appeal stands allowed. Order pronounced on 13-03-2025. (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT लेखा सद" /ACCOUNTANT MEMBER Dated: 17-03-2025. आदेश की "ितिलिप अ"ेिषत / Copy of the Order forwarded to : 1. अपीलाथ"/Appellant 2. ""थ"/Respondent 3. आयकरआयु"/CIT 4. िवभागीय"ितिनिध/DR 5. गाड"फाईल/GF