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Facts
The assessee maintained bank accounts and made cash deposits totaling Rs. 11,40,000/- during the assessment year 2017-18. The AO observed that Rs. 3,20,000/- could be accounted for by previous withdrawals, but the remaining Rs. 8,20,000/- was treated as unexplained cash deposits.
Held
The Tribunal held that the assessee failed to provide sufficient documentary evidence to substantiate the source of the cash deposits. The Tribunal decided to remit the issue back to the AO for fresh consideration, requiring the assessee to file a cash flow statement.
Key Issues
The primary issue was the addition of Rs. 8.2 lakhs as unexplained cash deposits under Section 69A and its taxation under Section 115BBE.
Sections Cited
69A, 115BBE, 271AAC, 250
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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI GEORGE GEORGE K. & SHRI CHANDRA POOJARI
Assessment Year: 2017-18 Boraiah Sarala Ashwath Narayan No.375, I Road, Ideal Homes ITO Rajarajeshwarinagar Ward-3(2)(3) Vs. Bangalore 560 098 Bangalore PAN NO: BKIPA9121M ASSESSEE RESPONDENT Assessee by : Shri Sripada M., A.R. Revenue by : Shri Ganesh R. Ghale, Standing Counsel for Revenue. Date of Hearing : 07.02.2024 Date of Pronouncement : 07.02.2024 O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against order of NFAC for the assessment year 2017-18 dated 12.10.2023 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).
The only issue in this appeal is with regard to sustaining of addition of Rs.8.2 lakhs u/s 69A of the Act by charging tax at 60% u/s 115BBE of the Act. 3. Facts of the case are that as per ITS details, the assessee is maintaining bank accounts in Canara Bank, vide A/c.No.2529101021757 and cash deposit made during period year is Rs. 11,40,000/-. The cash deposits during the period are made out of previous cash withdrawals from the banks. The ld. AO has considered the cash withdrawals and worked out the withdrawals available for redeposit.
Boraiah Sarala Ashwath Narayan, Bangalore Page 2 of 4 However, after considering the cash withdrawals available for redeposit, still there are deposits which cannot be considered as made out of previous cash withdrawals. The entire cash withdrawals from 8/04/2016 up to 20/10/2016 can be considered as available for redeposit during the period. The ld. AO has observed that cash withdrawals from 8/4/2016 to 20/10/2016 should be considered as available is Rs.3,20,000/-, the balance amount of Rs.8,20,000/- is taxable u/s.69A as unexplained cash deposits during the period. The total unexplained cash deposits during the period taxable U/S.69A are at Rs.8,20,000/-. The above unexplained money of Rs.8,20,000/- u/s.69A is to be taxed as per section 115BBE of the Act. Hence, ld. AO held that section 271AAC is attracted since total income determined included income referred to in section 69A of the Act and tax is payable as per section 115BBE. Against this assessee is in appeal before us.
On appeal, ld. CIT(A) has observed that the issue of cash deposit pertains to previous year 2016-17 (1.4.2016 to 31.3.2017). The cash withdrawals made from 1.4.2016 to till the date of demonetization had to be taken into account. Further, the cash in hand as shown by assessee as on 31.3.2016 can also contribute for cash deposit in previous year 2016-17. Any other sources of deposit other than the above two have to be admitted strictly on the basis of factual evidence. In the instant case, cash withdrawals from 8/4/2016 to 20/10/2016 was Rs.3,20,000/- only. There was no cash-in -hand as on 31/03/2016. The assessee argued before ld. CIT(A) that certain sums were withdrawn in November, 2015 ( previous year 2015-16) for some purpose and it was not utilized, and was available for deposit in previous year 2016- 17. However, if certain cash-in-hand were available on 31/03/2016, assessee could have reported the same in his/her income tax return for AY 2016-17. The assessee had failed to report the same in his/her Income Tax Return. Further, assessee argued before ld. CIT(A) that these amounts were withdrawn in previous year 2015-16 for new business which could not Boraiah Sarala Ashwath Narayan, Bangalore