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Facts
The assessee, an agriculturist, deposited Rs. 28 Lacs cash in their bank account on 03-04-2015 for AY 2016-17 but did not file a return of income. The Assessing Officer (AO) framed an assessment on a best judgment basis under Sections 147 r.w.s. 144 and added the entire Rs. 28 Lacs under Section 69A, rejecting the assessee's explanation of sourcing funds from prior withdrawals and personal savings. The CIT(A) confirmed this addition, leading to the appeal before the Tribunal.
Held
The Tribunal observed that the assessee had significant prior withdrawals totaling Rs. 26 Lacs and, in the absence of any explanation for their utilization for other purposes, presumed that the subsequent cash deposits were sourced from these earlier withdrawals. Consequently, the Tribunal restricted the addition to Rs. 3 Lacs, modifying the AO's original addition.
Key Issues
Addition of cash deposit of Rs.28 Lacs.
Sections Cited
147, 144, 69A
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Income Tax Appellate Tribunal, “SMC” BENCH, AMRITSAR
O R D E R
Aforesaid appeal by assessee for Assessment Year (AY) 2016- 17 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 04-03-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 147 r.w.s. 144 of the Act on 28-03-2022. The sole issue that falls for my consideration is addition of cash deposit for Rs.28 Lacs. Having heard rival submissions, the appeal is disposed-off as under.
From the assessment order, it emerges that the assessee deposited cash of Rs.28 Lacs in its bank account on 03-04-2015 but the assessee did not file return of income. The case was accordingly reopened wherein the assessee stated that deposits were sourced out of earlier withdrawals of Rs.20 Lacs on 13-01-2015, Rs.6 Lacs on 15- 01-2015 and the remaining deposits were out of personal savings. However, Ld. AO rejected the same on the ground that the purpose of withdrawal and depositing the same again in the bank account was not explained by the assessee. The assessee also deposited Rs.1 Lacs on 02-02-2015 which was not considered. Therefore, the deposits of Rs.28 Lacs were added by Ld. AO to assessee’s income u/s 69A. The Ld. CIT(A) confirmed the addition against which the assessee is in further appeal before Tribunal.
From the facts, it emerges that the assessee being an agriculturist has not file return of income. The perusal of bank account statement as placed on record would show that the assessee has loan facility in the said bank account. The assessee has, in fact, withdrawn the funds as enumerated in preceding para-2. The withdrawals amount to Rs.26 Lacs. The subsequent deposits are for Rs.1 Lacs and Rs.28 Lacs. The assessee is not shown to have utilized such withdrawals for any other purpose. Therefore, it could be presumed that the deposits were sourced out of earlier withdrawals only. Hence, considering the facts of the case, I deem it fit to confirm the addition of Rs.3 Lacs. The impugned addition stands restricted to the extent of Rs.3 Lacs. No other ground has been urged in the appeal.
The appeal stands partly allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.