2019 (11) TMI 1752 - AT - Income Tax

Addition u/s 69 - cash deposited in Yes Bank on various dates un-justified and un-sustainable - HELD THAT - In the present case it is not disputed that the amount of cash was explained as available with the assessee in the hands to deposit in the bank. Assessee has substantiated the availability of the cash by producing the cash flow statement, day-to-day cash book, Ledger account of the Bank with narration and the complete bank statement. Same were disbelieved by the learned assessing officer for the only reason that there is an inordinate delay in deposit of the cash in the bank account. AO and CIT- A did not show that above cash was not available in the hands of the assessee or have been spent on any other purposes. The coordinate bench in ACIT vs Baldev Raj Charla 2008 (12) TMI 241 - ITAT DELHI-C also held that merely because there was a time gap between withdrawal of cash and cash deposits explanation of the assessee could not be rejected and addition on account of cash deposit could not be made particularly when there was no finding recorded by the assessing officer or the Commissioner that apart from depositing this cash into bank as explained by the assessee, there was any other purposes it is used by the assessee of these amounts. Ground of the appeal of the assessee is allowed and orders of lower authorities are reversed. Appeal of assessee allowed.

Summary

Issues:
Appeal against addition of cash deposit under section 69 of the Income Tax Act.

Analysis:
The appeal was filed by the assessee against the order of the ld CIT (A)-10, New Delhi for the Assessment Year 2010-11, challenging the addition of Rs. 26,75,100/- under section 69 for cash deposited in Yes Bank. The assessee contended that the addition was unjustified and unsustainable in law and merits.

The case involved an individual assessee who had filed her income tax return declaring income of INR 87,000/-. The assessment was passed by the Income Tax Officer determining the total income at INR 68,61,203/-. The only addition raised by the assessee in the appeal was the amount of INR 26,75,100/- made by the assessing officer, which was confirmed by the CIT (A), leading to the current appeal.

The assessing officer had made the addition under section 69 of the Income Tax Act based on the cash deposits made by the assessee into a Yes Bank account. The explanation provided by the assessee, stating that the cash was withdrawn from the same bank and redeposited due to specific reasons, was rejected. The CIT (A) also upheld this rejection, leading to the appeal before the ITAT.

During the appeal, the authorized representative argued that the cash deposits were not investments, and the source of the cash was from the cash in hand withdrawn from the same bank and redeposited. The representative presented various documents, including cash flow statements, bank ledgers, and the day-to-day cash book, to support the explanation. Reference was made to legal precedents to strengthen the argument.

The ITAT, after considering the contentions of both parties and reviewing the orders of the lower authorities, found that the cash was available with the assessee to deposit in the bank. The explanation provided by the assessee was supported by documentary evidence, and there was no evidence to suggest that the cash was spent for other purposes. Citing relevant case laws, the ITAT allowed the appeal, reversing the orders of the lower authorities.

In conclusion, the ITAT allowed the appeal of the assessee, emphasizing that the addition made under section 69 of the Income Tax Act was not justified, as the explanation provided by the assessee regarding the source of the cash deposits was found to be reasonable and supported by evidence.