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2012 (11) TMI 934 - AT - Income Tax


Issues:
1. Deletion of addition of Rs.10,60,000 as unexplained cash deposit.
2. Deletion of addition of Rs.7,70,000 as unexplained cash deposit.

Issue 1: Deletion of addition of Rs.10,60,000 as unexplained cash deposit:
The appellant, a firm engaged in real estate business, declared total income of Rs. 41,77,773, which was assessed at Rs. 62,27,450, including unexplained cash deposits. The AO added Rs.10,60,000 as unexplained cash deposit, which the ld. CIT(A) later deleted. The AO questioned the source of these deposits, but the appellant explained that they were from remuneration and profits from another firm. The partners withdrew cash from the other firm and deposited it in the appellant's account. The AO rejected this explanation due to lack of documentary evidence. However, the ld. CIT(A) found that the total capital introduced was only Rs.10,55,000, and hence, deleted the addition. The Revenue argued that the deletion was unjustified without date-wise withdrawals. The appellant contended that complete details were provided and accepted by the ld. CIT(A). The Tribunal noted that partners withdrew and deposited the cash on the same dates, proving the source of deposits. As there was no evidence of withdrawals for other purposes, the ld. CIT(A)'s decision to delete the addition was upheld. The Tribunal rejected the Revenue's appeal.

Issue 2: Deletion of addition of Rs.7,70,000 as unexplained cash deposit:
The AO added Rs.7,70,000 as unexplained cash deposits made by the appellant in different banks, which the ld. CIT(A) later deleted after verifying the cash book entries. The Revenue contended that the AO's decision should be upheld, while the appellant supported the ld. CIT(A)'s order. The Tribunal observed that the ld. CIT(A) accepted the deposits after examining the cash book entries, and as there was no evidence to suggest otherwise, the deletion of the addition was deemed justified. Since the Revenue failed to prove any discrepancies in the accounts, the Tribunal upheld the ld. CIT(A)'s decision to delete the addition. Consequently, the Revenue's appeal was dismissed.

In conclusion, the Tribunal ruled in favor of the appellant, upholding the deletion of both the additions of unexplained cash deposits amounting to Rs.10,60,000 and Rs.7,70,000. The Tribunal found that the explanations provided by the appellant were satisfactory and that there was no evidence to dispute the sources of the cash deposits.

 

 

 

 

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