DINESH KUMAR PATEL SUNITHA ,TIRUCHIRAPALLI vs. ITO, WARD 1(3), TRICHY, TRICHY

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ITA 1639/CHNY/2023Status: DisposedITAT Chennai21 February 2024AY 2017-18Bench: SHRI MAHAVIR SINGH (Vice President)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal deleted the addition of Rs. 3 Lacs which was sourced from accepted commission income and Rs. 1 Lac from opening cash balance. The balance addition of Rs. 8.50 Lacs was sustained as unsubstantiated.

What were the facts?

The assessee deposited Rs. 12.50 Lacs in cash during the demonetization period. The Assessing Officer added this amount to the assessee's income due to lack of satisfactory documentary evidence. The CIT(A) confirmed the addition.

What were the issues?

Whether cash deposits made during demonetization are to be added to income when the source is not satisfactorily substantiated by the assessee.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ /SMC BENCH, CHENNAI

Before: SHRI MAHAVIR SINGH, VICE-

Hearing: 21.02.2024

आदेश / O R D E R

1.

This appeal by the assessee is arising out of order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi vide appeal No. ITBA/NFAC/S/250/2023-24 / 1057092868(1) dated 16.10.2023.

The assessment was framed by the Income Tax Officer, Ward- 1(3), Trichy, for assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act”) vide order dated 26.11.2019. The sole grievance of the assessee is confirmation of addition of Rs.12.50 Lacs which represent cash deposited by the assessee during demonetization period. The registry has noted delay of 14 days in the appeal which stand condoned.

2.

During assessment proceedings, the assessee submitted that the deposits of Rs.12.50 Lacs were sourced out of gifts, interest and commission income. The same has been tabulated in para 4 of the order. However, in the absence of any satisfactory documentary evidences forthcoming from the assessee, Ld. AO added the amount of Rs.12.50 Lacs to the income of the assessee. The addition was confirmed by Ld. CIT(A) since the assessee failed to make any representation.

Aggrieved, the assessee is in further appeal before me. The Ld. AR has pleaded for deletion of impugned addition which has been opposed by Ld. Sr. DR.

3.

I find that the assessee has reflected Timber Dealing Commission in its return of income which has been accepted by Ld. AO. This is stated to be one of the sources of cash deposit to the extent of Rs.3 Lacs. When the income has been accepted, the same has to be accepted as the source of deposit. Further the deposit of Rs. 1 Lacs is stated to be sourced out of opening cash balance. The same is also not in dispute. Therefore, I delete the addition to the extent of Rs.4 Lacs and sustain the balance additions since the same has remained unsubstantiated.

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