DEEPAK RAMCHAND RAHEJA,CHENNAI vs. ITO, NCW-3(2), CHENNAI

This appeal filed by the assessee is directed against the order dated 27.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18.

The assessee raised 9 grounds of appeal, amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A)/NFAC is justified in confirming the addition of ₹.14,45,000/-.

The ld. AR Shri M. Karunakaran, Advocate drew our attention to the details of cash deposit as recorded by the Assessing Officer in page 2 of the assessment order. He submits that the Assessing Officer made a clerical mistake in showing the total cash deposit at ₹.21 lakhs instead of ₹.16,50,000/- . We find that the Manager, Canara Bank certified that the assessee deposited ₹.12,00,000/- and ₹.50,000/- in the current account of the assessee. Therefore, we hold that the Assessing Officer mistakenly shown ₹.21,00,000/- instead of ₹.16,50,000/-.

It was explained before the Assessing Officer that the sources for such cash deposit in bank accounts are out of cash withdrawals and the Assessing Officer held that the cash withdrawals are only in new currency, but, not in SBN. Further, the Assessing Officer held that no cash balance has been shown in asset column in the return of income and accordingly, proceeded to add the said cash deposit on account of unexplained money under section 69A of the Income Tax Act, 1961 [“Act” in short] by giving benefit of ₹.5.00 lakhs of earlier cash balance. The ld. CIT(A) also observed that the contention of the assessee is not acceptable in support of having cash balance in the absence of mentioning NIL balance in asset column.

Before us, the ld. AR submits that the assessee is a businessman having sufficient cash balance in his hand. The Assessing Officer and the ld. CIT(A) proceeded to add the said amount without any basis and not considering the submissions of the assessee. He argued that the opening cash balance as on 01.04.2016 has been shown at ₹.17,39,357/-, but, no need to disclose the same in the return of income in view of the assessee having income of less than ₹.50.00 lakhs.

The ld. DR Ms. Gouthami Manivasagam, JCIT vehemently contended that the assessee failed to show source of said cash deposit before the Assessing Officer as well as the ld. CIT(A). She vehemently argued that there was no evidence before the Tribunal showing said cash deposit except making the statement that the assessee has opening cash balance as on 01.04.2016 and not necessary to disclose in the return of income at asset column. The assessee did not bring out any evidence in this regard before the Tribunal.

Having considered the submissions of the ld. AR and the ld. DR, we hold that the cash deposit as shown in page 2 of the assessment order is ₹.16,50,000/-, but, not ₹.21,00,000/-. The Assessing Officer has given cash benefit of ₹.5.00 lakhs on account of earlier cash balance and taking into same, the challenge regarding the addition before us is only ₹.11,50,000/- [₹.16,50,000-₹.5,00,000]. Admittedly, as contended by the ld. DR, there was no evidence showing in support of the claim of the assessee having cash balance of ₹.17,39,357/- as on 01.04.2016. Before us also, nothing was brought on record to show the same as available in the hands of the assessee as on 01.04.2016. The ld. AR pleaded that it is not necessary to disclose the same in the return of income as income of the assessee is below ₹.50.00 lakhs. On perusal of the assessment order, we note that the assessee declared total income of ₹.4,488/- in the return of income. The Assessing Officer doubted the cash deposit of ₹.16,50,000/- on account of assessee having a meagre income. We find no explanation was offered in respect of the said finding of the Assessing Officer before the ld. CIT(A) as well as before the Tribunal. Therefore, we find no force in the arguments of the ld. AR that the assessee has cash balance as on 01.04.2016 to an extent of ₹.17,39,357/-. In the absence of any evidence supporting the contention of the ld. AR as pleaded before us, we find no infirmity in the order of the ld. CIT(A). Thus, the addition of ₹.11,50,000/- is confirmed and the grounds raised by the assessee are dismissed.

In the result, the appeal filed by the assessee is dismissed. Order pronounced on 23rd October, 2024 at Chennai.