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Facts
For Assessment Year 2017-18, an addition of Rs. 12,41,500/- was made under section 69A as unexplained money during a section 144 assessment, subsequently upheld by lower authorities. The assessee admitted the cash deposit but claimed it originated from prior cash withdrawals, gifts, and accumulated savings, which failed to satisfy the lower authorities.
Held
Considering the assessee's past returned income and cash in hand figures, which were not properly credited, and the assessee's inability to fully reconcile figures, the Tribunal deemed it appropriate to restrict the addition to Rs. 2,41,500/-. This decision resulted in a relief of Rs. 10,00,000/- for the assessee, with the caveat that this estimation should not set a precedent.
Key Issues
Whether the addition made under section 69A for unexplained cash deposits was justified and to what extent the assessee could explain the source of the deposits, considering past income and cash in hand.
Sections Cited
Section 69A, Section 144
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R
PER SATBEER SINGH GODARA, JM:
This assessee’s appeal for assessment year 2017-18 arises against National Faceless Appeal Centre (NFAC), Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1057713571(1), dated 06.11.2023, in case no. CIT(A), Meerut/10823/2019-20, in proceedings u/s 144 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
A perusal of the assessee’s pleadings and both the learned lower authorities’ respective findings indicates that an addition u/s 69A as unexplained money of Rs. 12,41,500/- has been made in his hands in section 144 assessment framed on 27.12.2019 and upheld in the lower appellate discussion. The assessee’s case admittedly does not dispute the clinching fact that he had indeed made the impugned cash deposit in the relevant previous year. He is sought to have explained the same as representing previous cash withdrawals, cash gifts and accumulated savings as forming source thereof, which has failed to follow the learned lower authorities concurrence.
Faced with this situation, learned Departmental Representative invited the undersigned’s attention to page 10 in lower appellate discussion indicating the assessee’s returned income in assessment years 2015-16 to 2017-18 as well as cash in hand figures which have neither been considered as per law nor given credit in the impugned addition. Coupled with this, the assessee has also failed to reconcile the corresponding figures of various heads vis a vis cash deposits. Faced with this situation, it is deemed appropriate, in larger interest of justice, that a lump sum addition of Rs. 2,41,500/- only would be just and fair with a rider that instant estimation shall not be treated as precedent. Assessee gets relief of Rs. 10,00,000/- in other words. Necessary computation shall follow as per law.
This assessee’s appeal is partly allowed in above terms.
Order pronounced in open court on 28.11.2024.