KUNHI KOYATHENGAL SALIM THANGAL MULLAKOYA THANGAL,THRISSUR vs. DEPUTY COMMISSIONER OF INCOME TAX, KOCHI

However, the AO found that the similar deposit of Rs. 40.90Lakh was made in the immediate previous assessment year i.e. A.Y. 2014-15 which was treated as unexplained in the assessment order. The assessment order reached to finality as assessee did not file any appeal. Therefore, the opening cash balance shown during the year for Rs. 18 Lakh which claimed as source of deposit for the year under consideration remains unexplained. Accordingly, the AO held that the source of cash deposited during the year was not explained by the assessee. Hence, the AO proceeded to make addition of cash of deposit by treating the same as unexplained, however the AO provided the credit of Rs. 18 Lakh by holding that the same was already subjected to addition in the immediate previous assessment year. Thus, the AO finalized the draft assessment order by purposing to make addition of Rs. 9.51 Lakh (27.51 Lakh – 18 Lakh) only.

The aggrieved assessee raised objections before the learned DRP who rejected the objection of the assessee. Thereafter, the AO made final assessment order by making an addition of Rs. 9.51 Lakh only.

Being aggrieved by the final assessment order the assessee is in appeal before us.

The learned AR for the assessee before us contended the assessee during the year under consideration, there was total withdrawal of Rs. 1,85,79,950/- out of Rs. 1,47,99,000/- utilized towards purchase of property and building construction. The lower authorities while dealing with source of deposit of cash has not considered the amount of cash withdrawn. The learned Kunhi Koyathengal Salim Thangal Mullakoya Thangal AR further submitted identical addition was made in the hand of the assessee for A.Y. 2014-15 which was a set aside to the file of the AO by the ITAT in fresh adjudication. Therefore, the issue on hand should also be set aside to file of AO fresh adjudication after consideration of cash withdrawal.

The learned DR raised no objection if the issue is set aside to the file of the AO for fresh adjudication as per law.

We have heard the rival contentions of both the parties and perused the materials on record. At the outset, we note that identical addition on account of cash deposit was made in the hands of assessee in the immediately preceding assessment year 2014-15 and dispute reached to this tribunal in assessee’s appeal bearing ITA No. 202/Coch/2023. The tribunal vide order dated 22-08-2024 set aside the issue to the file of the AO by observing as under:

It emerges at the very out that the assessee’s sole substantive grievance canvassed in the instant appeal challenges correctness of both the learned lower authorities action making sec.69A unexplained money addition of Rs.40.90 lakhs representing cash deposits made in his bank account(s). Learned counsel invited our attention to assessment discussion in page-2 that the assessee had in fact carried-out 77 entries of cash deposits and withdrawals for the period from 02.03.2013 to 31.03.2014 involving varying sums. That being the case, there is no rebuttal from the department’s side either indicating the learned assessing authority to have gone by the peak amount or any telescoping of the corresponding withdrawals either in the course of assessment or in learned Dispute Resolution Panel’s [DRP] directions.

Faced with this situation, we deem it appropriate to direct the assessee to file his cash flow statement as well as reconciliation of all the withdrawals/alleged deposits before the learned Assessing Officer for his fresh appropriate examination within three effective opportunities at his own risk and responsibility. The Assessing Officer shall indeed consider the same as per law in consequential proceedings. Ordered accordingly.