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Facts
The assessee filed a return of income with a declared total income of Rs. 4,89,960/- for AY 2017-18. The Assessing Officer (AO) observed cash deposits of Rs. 1,40,48,200/- in the assessee's bank account, which was significantly higher than the declared turnover of Rs. 55,88,570/-.
Held
The CIT(A) upheld the addition made by the AO, noting that the assessee failed to produce documentary evidence to support the claim that cash deposits were from sales. The CIT(A) also observed that the assessee's explanation about turnover being wrongly reported was an attempt to justify the cash deposits. The Tribunal, however, felt it appropriate to restore the issue to the AO for a further opportunity to the assessee.
Key Issues
Whether the addition of Rs. 1,40,48,200/- as unexplained cash deposit is justified, considering the discrepancy between the declared turnover and the cash deposits, and the assessee's explanation for the lower turnover.
Sections Cited
69A, 115BBE, 143(3)
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Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
This appeal has been preferred by the assessee against order dated 30.03.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds:
1] 1] The The learned learned CIT(A) CIT(A) erred erred in in confirming confirming the the addition addition of of Rs.1,40,48,200/ Rs.1,40,48,200/-u/s 69A r.w. 115BBE on account of cash deposited in u/s 69A r.w. 115BBE on account of cash deposited in the bank account on the ground that the assessee had failed to prove the bank account on the ground that the assessee had failed to prove the bank account on the ground that the assessee had failed to prove the sources of the said cash deposited and hence, the addition was the sources of the said cash deposited and hence, the addition was the sources of the said cash deposited and hence, the addition was rightly made by the A.O. rightly made by the A.O. 2] The learned The learned CIT(A) erred in holding that the assessee had concocted CIT(A) erred in holding that the assessee had concocted his turnover figures to justify the cash deposit in the bank account and his turnover figures to justify the cash deposit in the bank account and his turnover figures to justify the cash deposit in the bank account and hence, the addition was rightly made by the learned A.O. hence, the addition was rightly made by the learned A.O. 3] The learned CIT(A) erred in not appreciating that the cash deposite The learned CIT(A) erred in not appreciating that the cash deposite The learned CIT(A) erred in not appreciating that the cash deposited in the bank account was out of the regular sales made by the assessee in the bank account was out of the regular sales made by the assessee in the bank account was out of the regular sales made by the assessee and hence, there was no reason to make any addition of the said and hence, there was no reason to make any addition of the said and hence, there was no reason to make any addition of the said amount as an unexplained investment u/s 69A r.w.s. 115BBE of the amount as an unexplained investment u/s 69A r.w.s. 115BBE of the amount as an unexplained investment u/s 69A r.w.s. 115BBE of the Act. 4] The learned CIT(A) erred in not appreciating th The learned CIT(A) erred in not appreciating that in the original return at in the original return of income filed by the assessee, the turnover was not correctly reported of income filed by the assessee, the turnover was not correctly reported of income filed by the assessee, the turnover was not correctly reported and the said mistake was corrected during the asst. proceedings and and the said mistake was corrected during the asst. proceedings and and the said mistake was corrected during the asst. proceedings and hence, there was no reason to hold that the assessee had failed to hence, there was no reason to hold that the assessee had failed to hence, there was no reason to hold that the assessee had failed to explain the sources of explain the sources of the cash deposited in the bank account and the cash deposited in the bank account and accordingly, the addition made may kindly be deleted. accordingly, the addition made may kindly be deleted. 5] The learned CIT(A) erred in not appreciating that the assessee had The learned CIT(A) erred in not appreciating that the assessee had The learned CIT(A) erred in not appreciating that the assessee had submitted various details to prove that the cash deposited in the bank submitted various details to prove that the cash deposited in the bank submitted various details to prove that the cash deposited in the bank account was out o account was out of his regular cash sales and therefore, the addition f his regular cash sales and therefore, the addition made u/s 69A r.w.s. 115BBE is not justified and the same may kindly made u/s 69A r.w.s. 115BBE is not justified and the same may kindly made u/s 69A r.w.s. 115BBE is not justified and the same may kindly be deleted. Briefly stated, facts of the case are that the assessee filed its 2. Briefly stated, facts of the case are that the assessee filed its Briefly stated, facts of the case are that the assessee filed its return of income on 02.02.2018 declaring total income at return of income on 02.02.2018 declaring total income return of income on 02.02.2018 declaring total income Rs.4,89,960/-. The return of income filed by the assessee was . The return of income filed by the assessee was . The return of income filed by the assessee was selected for scrutiny and statutory notices under the Income-tax selected for scrutiny and statutory notices under the Income selected for scrutiny and statutory notices under the Income Act, 1961 (in short ‘the Act’) were issued and complied with. The Act, 1961 (in short ‘the Act’) were issued and complied with. The Act, 1961 (in short ‘the Act’) were issued and complied with. The Assessing Officer observed cash deposit of Rs.1,40,48,200/- in the Assessing Officer observed cash deposit of Rs.1,40,48,200/ Assessing Officer observed cash deposit of Rs.1,40,48,200/ bank account of the assessee maintained with Deccan Merchants bank account of the assessee maintained with Deccan Merchants bank account of the assessee maintained with Deccan Merchants Co-op. Bank Ltd. The Assessing Officer further noticed that in the op. Bank Ltd. The Assessing Officer further noticed that in the op. Bank Ltd. The Assessing Officer further noticed that in the return of income filed, the assessee had offered turnover of return of income filed, the assessee had offered turnover of return of income filed, the assessee had offered turnover of Rs.55,88,570/- for the year under consideration. As total c for the year under consideration. As total cash for the year under consideration. As total c deposits being more than the turnover of the assessee, the deposits being more than the turnover of the assessee, the deposits being more than the turnover of the assessee, the Assessing Officer asked the assessee to produce books of accounts. Assessing Officer asked the assessee to produce books of accounts. Assessing Officer asked the assessee to produce books of accounts. On verification of the sale register On verification of the sale register, the Assessing Officer observed the Assessing Officer observed total sale of Rs.1,69,31,409/ total sale of Rs.1,69,31,409/- only. But in the profit an only. But in the profit and loss account submitted by the assessee turnover of Rs.2,65,15,554/- account submitted by the assessee turnover of Rs.2,65,15,554/ account submitted by the assessee turnover of Rs.2,65,15,554/ was recorded. The contention of the assessee were not accepted and . The contention of the assessee were not accepted and . The contention of the assessee were not accepted and the Assessing Officer held entire cash deposit of Rs.1,40,48,200/- the Assessing Officer held entire cash deposit of Rs.1,40,48,200/ the Assessing Officer held entire cash deposit of Rs.1,40,48,200/ as unexplained money in terms of section 69 as unexplained money in terms of section 69A of the of the Act and accordingly in the assessment order passed u/s 143(3) of the Act on accordingly in the assessment order passed u/s 143(3) of the Act on accordingly in the assessment order passed u/s 143(3) of the Act on 19.11.2019, he made addition made addition of Rs.1,40,48,200/-.
On further appeal, the Ld. CIT(A) upheld the addition 3. On further appeal, the Ld. CIT(A) upheld the addition On further appeal, the Ld. CIT(A) upheld the addition observing as under:
“Aggrieved, assessee is in appeal. Aggrieved, assessee is in appeal. It is noted that It is noted that in his ITR for the A.Y. under consideration, the in his ITR for the A.Y. under consideration, the assessee had offered turnover of Rs.55,88,870/ assessee had offered turnover of Rs.55,88,870/ assessee had offered turnover of Rs.55,88,870/-. When confronted with the cash deposits being more than the turnover confronted with the cash deposits being more than the turnover confronted with the cash deposits being more than the turnover shown in the ITR, assessee submitted that the turnover was shown in the ITR, assessee submitted that the turnover was shown in the ITR, assessee submitted that the turnover was wrongly shown in his ITR and cl wrongly shown in his ITR and claimed that his turnover was aimed that his turnover was actually Rs.2,65,15,554/ actually Rs.2,65,15,554/-. It is clear from the facts that the . It is clear from the facts that the assessee is concocting figures upon being confronted with his assessee is concocting figures upon being confronted with his assessee is concocting figures upon being confronted with his cash deposits. Assessee has also submitted in written cash deposits. Assessee has also submitted in written cash deposits. Assessee has also submitted in written submissions that no books of accounts were being submissions that no books of accounts were being maintained maintained by him. The assessee has thus failed to produce any by him. The assessee has thus failed to produce any by him. The assessee has thus failed to produce any documentary evidence in support of his claim that the cash documentary evidence in support of his claim that the cash documentary evidence in support of his claim that the cash deposit has been made out of cash sales. deposit has been made out of cash sales. Accordingly, grounds of appeal are hereby dismissed. Accordingly, grounds of appeal are hereby dismissed. As a result, the appeal is dismissed. As a result, the appeal is dismissed.”
4. Aggrieved, the assessee is in appeal before the Tribunal raising Aggrieved, the assessee is in appeal before the Tribunal raising Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. the grounds as reproduced above.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. The Assessing Officer has made relevant material on record. The Assessing Officer has made relevant material on record. The Assessing Officer has made addition for the amount of Rs. addition for the amount of Rs.1,40,48,200/- appearing in the bank appearing in the bank account of the assessee as cash deposits f the assessee as cash deposits for the reason that or the reason that turnover of the assessee in the return of income was reported only turnover of the assessee in the return of income was reported only turnover of the assessee in the return of income was reported only Rs.55,88,870/-. The Assessing Officer also noted in the sales . The Assessing Officer also noted in the sales . The Assessing Officer also noted in the sales register also the total sales register also the total sales of Rs.1,69,31,409/- were were only recorded. Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the assessee was not much literate and he reported his entire turnover assessee was not much literate and he reported his entire turnover assessee was not much literate and he reported his entire turnover of Rs.2,65,15,554/- to the person who was maintaining books of to the person who was maintaining books of account account but but he he mistakenly mistaken ly only only reported reported turnover turnover of of Rs.55,88,870/- in the return of income filed. The Ld. counsel in the return of income filed. The Ld. counsel in the return of income filed. The Ld. counsel submitted that in the profit and loss account and the books of submitted that in the profit and loss account and the books of submitted that in the profit and loss account and the books of accounts accounts accounts produced produced produced during during during the the the course course course of of of the the the assessment assessment assessment proceedings, the turnover of Rs.2,65,15,554/ proceedings, the turnover of Rs.2,65,15,554/- was recorded recorded. But as the period for revsing revsing the return of income had already expired already expired, the assessee could not revise the return of income. He submitted that assessee could not revise the return of income. He submitted that assessee could not revise the return of income. He submitted that mistake pertains mainly to the person who was looking after the mainly to the person who was looking after the mainly to the person who was looking after the filing of return of income. The Ld. co filing of return of income. The Ld. counsel before us submitted that unsel before us submitted that the assessee has shown turnover of more than Rs.2 crores in earlier the assessee has shown turnover of more than Rs.2 crores in earlier the assessee has shown turnover of more than Rs.2 crores in earlier assessment years which supports the case of the assessee that assessment years which supports the case of the assessee that assessment years which supports the case of the assessee that inadvertently lower turnover has been shown for the year under inadvertently lower turnover has been shown for the year under inadvertently lower turnover has been shown for the year under consideration. The Ld. counsel a consideration. The Ld. counsel also submitted that the assessee will lso submitted that the assessee will file necessary documents indicating complaint documents indicating complaint filed against filed against the person who had filed d return of income for the relevant year. The Ld. return of income for the relevant year. The Ld.
counsel submitted that if matter is restored back to the Assessing counsel submitted that if matter is restored back to the Assessing counsel submitted that if matter is restored back to the Assessing Officer, the assessee ee would substantiate that in prior years turnover substantiate that in prior years turnover of more than Rs. 2 crores was shown in the return of income. In of more than Rs. 2 crores was shown in the return of income. In of more than Rs. 2 crores was shown in the return of income. In view of the facts and circumstances of the case, we feel it view of the facts and circumstances of the case view of the facts and circumstances of the case appropriate to restore the issue back to the file of the Assessing appropriate to restore the issue back to the file of the Assessing appropriate to restore the issue back to the file of the Assessing Officer for providing one more opportunity to the assessee for oviding one more opportunity to the assessee for oviding one more opportunity to the assessee for justifying that turnover of the assessee was more than Rs. 2 crores justifying that turnover of the assessee was more than Rs. 2 crores justifying that turnover of the assessee was more than Rs. 2 crores in regular course of business and by mistake less amount was regular course of business and by mistake less amount was regular course of business and by mistake less amount was reported in the return of income. The grounds of appeal of the reported in the return of income. The grounds of appeal of the reported in the return of income. The grounds of appeal of the assessee are accordingly allowed for statistical purposes. ccordingly allowed for statistical purposes. ccordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.