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Facts
The assessee's appeal pertains to AY 2016-17, arising from an order confirming an addition of Rs. 3,85,000/- made by the AO under Section 68 of the Income Tax Act for unexplained cash deposits. The CIT(A) upheld the addition, stating that the assessee failed to provide conclusive evidence of the source of the deposits.
Held
The Tribunal held that the assessee, a salaried employee earning Rs. 30,000/- per month, had sufficient savings over a long period of service to account for the cash deposit of Rs. 3,85,000/-. Therefore, the addition made by the AO and confirmed by the CIT(A) was deemed incorrect.
Key Issues
Whether the addition of Rs. 3,85,000/- on account of cash deposits in the bank account is sustainable when the assessee claims it to be out of savings from his salary and agricultural income of his wife.
Sections Cited
68, 147, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
D. Ramasamy, The Income Tax Officer, 3/181, Andikattu Thottam, Vs. Ward-1(4), Tirupur, Nagarasu Nallur, Uthiyur, Kangayam – 638 703. Tamil Nadu. [PAN: AJHPR 7592N] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथG की ओर से/ Appellant by : Shri Hari Nandha Kumar, CA IJथG की ओर से /Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/Date of Hearing : 13.08.2024 घोषणा की तारीख /Date of Pronouncement : 21.08.2024 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2016-17 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 31.03.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144B of the Income-tax Act, 1961 (hereinafter “the Act”) on 25.03.2022. :- 2 -:
The only ground of appeal in this appeal of assessee is against addition of Rs. 3,85,000/- u/s. 68 of the Act in respect of deposits in the bank account. During the assessment proceedings, The A.O has made the addition of cash deposits of Rs.3,85,000/- in the bank account on the ground that the assessee has not explained the source of cash deposit. The assessee has explained that he is a salaried employee of Tamil Nadu State Corporation and earning monthly salary of Rs. 33,000/- per month and the cash deposit is out of his savings.
However, the A.O has not accepted his explanation and made addition u/s. 68 of the Act.
On appeal, the Ld. CIT(A) held that the assessee has not submitted any conclusive evidence to explain the source of deposit.
The Ld. AR has argued that the assessee is a salaried employee drawing salary of Rs. 33,000/- per month and the cash was deposited out of his savings. The Ld. AR has also submitted that the assessee’s wife has agriculture income and the proof of agriculture income was submitted before the A.O.
The Ld. DR has relied on the orders of the authorities below. :- 3 -:
We have heard the rival submissions, and perused the materials available on record. The assessee is a salaried employee and drawing salary of Rs. 30,000/- per month and he has savings over long period of service. We agree with the explanation submitted by Ld. AR that the assessee is earning a good salary to have savings of Rs.3,85,000/- after long period of service. In view of the above, the addition made by A.O and confirmed by Ld. CIT(A) is deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced on 21st August, 2024. (यस यस िव"ने" रिव) (जगदीश) (Jagadish) (SS Viswanethra Ravi) लेखा लेखा सद"य लेखा लेखा सद"य सद"य /Accountant Member सद"य सद"य / Judicial Member "याियक "याियक सद"य "याियक "याियक सद"य सद"य चे"ई/Chennai, "दनांक/Dated: 21st August, 2024. EDN/-