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Issues Involved:
The judgment involves the issue of deleting the addition of Rs. 14 lakh by holding that the deposits were made out of available cash balance of Rs. 11.49 lakhs. Facts of the Case: The Assessing Officer (AO) received information that a sum of Rs. 14 lakhs was deposited by the assessee in his bank account. The AO initiated proceedings u/s 147 of the Income Tax Act. The assessee claimed that the cash deposits were made from the cash available with him. The AO examined the statement of affairs over multiple years and concluded that the deposits were not explainable, as the cash in hand exceeded the declared income for those years. Consequently, the AO treated the amount of Rs. 14,00,000 as an unexplained cash credit. Arguments Before CIT(A): Before the Commissioner of Income Tax (Appeals) [CIT(A)], the assessee argued that the AO had accepted the existence of cash of Rs. 11,49,879. The CIT(A) observed that the AO had acknowledged the opening cash balance and deleted the addition made by the AO. Arguments Before ITAT: Before the Income Tax Appellate Tribunal (ITAT), the Senior Departmental Representative (Sr.DR) contended that the CIT(A) erred in accepting the existence of cash with the assessee. The Authorized Representative (AR) supported the CIT(A) order, stating that the cash in hand was declared in the return of income and wealth tax. Decision by ITAT: The ITAT noted that the AO found it difficult to accept that the deposits were made from the declared income. The ITAT disagreed with the CIT(A) that the AO had acknowledged the cash balance. The ITAT decided to send the matter back to the AO to re-examine the contentions of the assessee regarding the availability of cash, income admitted, and family expenses. The AO was directed to provide the assessee with a reasonable opportunity to be heard. Conclusion: The ITAT allowed the appeal filed by the assessee for statistical purposes, ordering a re-examination by the AO regarding the availability of cash and related contentions.
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