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Facts
The assessee deposited Rs. 10 lakhs in cash during demonetisation but failed to file an income tax return, leading to an addition under Section 69A. The assessee claimed the cash was from an opening balance, supported by a revised ITR for AY 2016-17, but this was rejected by the CIT(A) due to a lack of significant cash sales. The assessee sought to introduce additional evidence before the ITAT.
Held
The tribunal remanded the matter back to the Assessing Officer to allow the assessee to furnish additional documentary evidence to explain the source of the cash deposit. The AO is directed to consider these new documents and provide a fresh assessment after giving the assessee a reasonable opportunity to be heard.
Key Issues
The key legal issue is the source of a Rs. 10 lakh cash deposit during demonetisation and the admissibility of additional evidence to substantiate the claim of available cash balance.
Sections Cited
Section 69A, Section 250, Section 144, Section 147, Section 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
ORDER Per: Udayan Dasgupta, J.M.: This appeal is filed by the assessee against the order of ld. CIT (A), NFAC, Delhi, passed u/s 250 of the Act, 1961 vide order dated 18.10.2023 which has emanated from the order of the AO, ITO, Ward -2(1), Jalandhar, passed u/s 144 r.w.s. 147 of the Act, vide order dated 31.12.2019.
There are four grounds of appeal preferred by the assessee relating to a single issue pertaining to an addition of Rs. Ten lakhs (Rs.10,00,000/-), u/s 69A sustained in first appeal.
The assessee filed an application before the bench, seeking time for furnishing of additional documentary evidences in support of which he proposes to explain the source of cash deposit in bank account during demonetisation period.
The facts in brief are that the assessee is engaged in the business of trading of hardware goods and pipe fittings, and has deposited an amount of Rs. 10 lakhs in cash in his PNB A/c No XXXXXXX 50289 during the demonetisation period, but no return has been filed in response to notice u/s 142(1) of the Act, even though a paper return was prepared and taxes duly paid on presumptive basis admitting turnover of Rs.43.17 lakhs ( supported by VAT returns ) and profits declared at Rs.4.81 lakhs, but no return could be uploaded in the portal due to illness of his accountant.
The assessment completed with an addition of Rs. Ten lakhs u/s 69A of the Act was challenged in first appeal, where the assessee explained the cash deposit to have been sourced out of opening cash balance available as on the first day of April, 2016, which is supported by the figures of closing cash of Rs.16.12 lakhs, declared in the revised income tax returns for the Asst year
Now before the tribunal the assessee seeks to file additional documentary evidences in support of his contention of availability of cash for which this adjournment application has been moved.
We are of the opinion that additional documentary evidences needs to be examined by the AO at the very first stage regarding its authenticity and genuineness and since the assessee has cooperated at all stages before the AO in assessment proceedings and also before the Ld. first appellate authority, with whatever documents available in his possession , trying to prove the source of his cash availability (though not up to the satisfaction of the revenue), we are of the view that one more opportunity may be allowed to the assessee to satisfactorily explain the source of cash deposit, with additional documentary evidences, which he now seeks to produce.
The Ld. DR relied on the order of the Ld. CIT(A) but has no objection if the matter is remanded for examination of fresh documents.
As such in the interest of justice we set aside the matter to the files of the AO for a fresh assessment, after considering the fresh documentary evidences which the assessee seeks to file in support of his contention and to fully explain
The assessee will be allowed reasonable opportunity of being heard.
We have not expressed any opinion on merits.
In the result the appeal of the assessee is allowed for statistical purpose.
Order pronounced on 22.01.2026 in the Open Court