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Facts
The assessee, engaged in the transportation business, initially did not file an income tax return. The case was reopened, and an addition of Rs. 18,00,000 was made under section 69A for unexplained cash deposits. The CIT(A) confirmed the addition, restricting it after accepting an explanation for Rs. 3,00,000 from bank withdrawals.
Held
The Tribunal held that the opening cash balance of Rs. 11,50,000 and realization of debtors of Rs. 1,16,340 were verifiable from the Balance Sheet of the previous year. The remaining cash deposit was considered to be out of current year transactions, supported by subsequent cash withdrawals.
Key Issues
Whether the CIT(A) erred in confirming the addition of Rs. 18,00,000 for unexplained cash deposits without appreciating the verifiable sources of funds.
Sections Cited
69A, 143(3), 147
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC’’ JAIPUR
Before: Hon’ble SHRI SANDEEP GOSAINvk;dj vihy la-@ITA No. 241/JP/2024
ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 10-01-2024, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2012-13 raising therein following ground of appeal. ‘’Based on facts and circumstances of the case and in law, the CIT(A) has erred in confirming addition of Rs. 18,00,000 under section 69A of the Income-tax Act, 1961 by treating cash deposit in bank account to this extent as unexplained without appreciating that the same was deposited
2. KAILASH CHAND SONKHIYA VS ITO, WARD 5(1), JAIPUR partly out of the opening balance as on 1. April 2011 of Rs.11,50,000 and partly out of realization of debtors and transaction made during the year.’’ 2.1 Brief facts of the case are that the assessee is a Prop: of M/s. Kailash Goods Transport Co and derives income by plying of hired trucks for transportation of goods for various places. It is an undisputed and admitted fact that initially no return of income was filed by the assessee. Therefore, the case of the assessee was reopened and consequently after providing of opportunity of hearing to the assessee, the assessment vide order dated 27-12-2018 u/s 143(3) r.w.s 147 of the Act was completed by making addition as according to the AO no explanation was offered by the assessee for cash deposit in the bank account. 2.2 During the appellate proceedings, although the assessee has submitted the explanation for cash deposits in the bank account out of opening balance and current year transaction. However, no documentary evidences with regard to source of opening balance and realization from debtors was available . Therefore, the ld. CIT(A) restricted the addition to Rs.18.00 lacs after accepting the explanation of cash deposits to the extent of Rs.3.00 lacs from the cash withdrawals from the bank.
3 KAILASH CHAND SONKHIYA VS ITO, WARD 5(1), JAIPUR 2.3 After hearing both the parties and perusing the materials available on record, the Bench found that the assessee during the year has made cash deposit of Rs 21,00,000/- in bank account (PB 7- 9), the source of which is as under:-
Date of Deposit Amount Source of Deposit 25.07.2011 13,00,000/- Out of opening balance of 11,50,000/-, realisation of debtors of Rs. 1,16,340/-and out of the cash available from current year transaction Out of cash available from current year 26.07.2011 5,00,000/- transaction 22.09.2011 2,00,000/- Out of cash withdrawal of Rs.9,00,000 on 07.09.2011 from the bank account 23.09.2011 1,00,000/- Out of cash withdrawal of Rs.9,00,000 on 07.09.2011 from the bank account Since ld. CIT(A) has accepted the explanation of the assessee regarding cash deposits Rs.2,00,000/-on 22.09.2011 and Rs.1,00,000/- on 23.09.20211 out of withdrawal of Rs.9,00,000/- on 07.09.2011 (PB 9) as explained but has not accepted the source of cash deposit of Rs.13,00,000/- on 25.07.2011 & Rs.5,00,000/- on 26.07.2011 by holding that no documentary evidence regarding source of opening balance, realisation from debtors and deposit out of current year transaction is available. However, in holding so, it is ignored that opening cash in hand of Rs.11,50,000/- is verifiable from the Balance Sheet as on 31.03.2011 (PB 4) filed in course of the assessment proceedings for A.Y. 2011-12. Further realisation of Rs.1,16,340/- is also verifiable from the Balance Sheet as on 4 KAILASH CHAND SONKHIYA VS ITO, WARD 5(1), JAIPUR 31.03.2011. The remaining cash deposit of Rs.5,33,660 (13,00,000+ 5,00,000- 11,15,000-1,16,340) is out of the current year transactions for which though direct evidence is not available but considering the fact that assessee is engaged in transportation business and has also subsequently withdrawal cash of Rs.14,30,000/- (8,30,000 9,00,000 2,00,000- 1,00,000) from his bank account in August & September 2011, the cash deposit of Rs.5,33,660 out of the current year transaction should be accepted. Hence, in view of the above facts and circumstances of the case and the details as mentioned above, the Bench does not concur with the findings of the ld. CIT(A). Hence, the addition sustained amounting to Rs.18.00 lacs is directed to be deleted. Thus the appeal of the assessee is allowed. 3.0 In the result, the appeal of the assessee stands allowed with no orders as to costs. Order pronounced in the open court on 10/07/2024.