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Facts
The assessee appealed against the CIT(A) order confirming additions of Rs. 4,10,723/- and Rs. 1,62,862/- for unexplained cash deposits during the demonetization period. The AO treated these amounts as unexplained money under Section 69A of the Income Tax Act.
Held
The Tribunal noted that the assessee presented a chart to justify the source of cash deposits, but these documents were not verified by the lower authorities. To ensure justice, the Tribunal decided to provide another opportunity to the assessee.
Key Issues
Whether the cash deposits made during the demonetization period were unexplained money, and if so, whether the additions made by the AO were justified.
Sections Cited
69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: BANGALORE
Before: SMT. BEENA PILLAI & SHRI WASEEM AHMED
O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order passed by the NFAC, Delhi dated 22/04/2024 vide DIN No. ITBA/NFAC/S/250/ 2024-25/1064270990(1) for the assessment year 2017-18.
The interconnected issue raised by the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 4,10,723/- and 1,62,862/- representing the cash deposit as unexplained money u/s 69A of the Act.
The AO during the assessment proceedings found that the cash available with the assessee was Rs. 24,07,577/- during the demonetization period, whereas the cash deposited in the bank account stands at Rs. 28,18,300/- leading to the difference of Rs. 4,10,723/-, the source of which was not explained by the assessee. Therefore, the AO treated the same as unexplained money u/s 69A of the Act.
Likewise, the AO found that the opening balance of cash as on 8/11/2016 stands at Rs. 21,09,474/-, whereas the assessee has deposited old currency in the bank account amounting to Rs. 22,72,300/- leading to the difference of Rs. 1,62,862/-, the source of which was not explained by the assessee. Therefore, the AO treated the sum of Rs. 1,62,862/- as unexplained money u/s 69A of the Act and added to the total income of the assessee.
On appeal before the ld. CIT(A), the assessee contended that the cash was received against the sales which is evident from the cash book. Thus, the amount deposited in the bank account was fully explained. As such, the contention of the assessee was that the cash was deposited against the receipt of cash sales made to the parties. However, the ld. CIT(A) rejected the contention of the assessee by observing that there was no documentary evidence furnished by the assessee suggesting the receipt of money against the cash sales.
Being aggrieved by the order of the ld. CIT(A), the assessee is before us.
The ld. AR before us filed a chart placed on pages 29 to 30 of the appeal memo containing the information about the availability of cash in hand. According to the ld. AR such detail is sufficient to justify the . source of cash. However, none of the authorities below has gone through the details placed on pages 29 to 30 of the appeal memo. Thus, the ld. AR prayed before us to restore the issue to the file of the AO for fresh adjudication as per the provisions of law.
The learned DR before us supported the orders of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the assessee has tried justifying the source of cash deposit in the bank account as reflected in the excel sheet placed on pages 29 to 30 of the appeal memo. However, we note that such documents have not been verified by the authorities below. Therefore, in the interest of justice and fair play, we are inclined to extend one more opportunity to the assessee to justify his stand before the AO. Hence, we set aside the finding of the ld. CIT(A) and remit the issue back to the AO for fresh adjudication as per the provisions of law. Hence, the ground of appeal raised by the assessee is hereby allowed for statistical purposes.