2023 (6) TMI 1338 - AT - Income Tax

Unexplained cash deposits in bank account u/s 68 - all deposits were in denomination notes (old notes) - assessee was doing his business for booking of railway tickets - HELD THAT - All the amount received by assessee were ultimately deposited/remitted to the account of IRCTC by way of debit card payment. The assessee throughout the proceedings before the Assessing Officer as well as before the ld. CIT(A) contended that he was working as an agent/sub-agent of Akbar Online Booking Pvt. Ltd.. Such contention of assessee was not controverted by the Assessing Officer by making investigation of fact or bringing any adverse material. The assessee has also furnished the details of his client for which he made booking through IRCTC. The assessee has also relied on press release of Economic Times wherein booking of railway tickets are also allowed by way of old currency notes. On careful perusal of such press release, we find that in the press release, there is no such restriction that railway tickets is to be booked on railway counters only. Like private hospitals were also allowed to receive old currency notes. AO has not controverted the contentions and the material brought on record by assessee. As decided in the case of Anantpur kalpana 2021 (12) TMI 599 - ITAT BANGALORE that where Assessing Officer made addition under Section 68 on account of cash deposited by assessee in its two bank account post demonetization, since said cash deposit was towards assessee s sale proceeds which was already offered to tax by assessee and admitted by revenue as revenue receipt, impugned addition made under section 68, resulting in double taxation, were liable to be deleted. Thus assessee has discharged his onus by showing prima facia material that the entire cash deposits was part sale transaction, thus, no addition of cash deposits was warranted. Assessee appeal allowed.

Summary

Issues:
The judgment involves the confirmation of addition made by the Assessing Officer regarding cash deposits during demonetization period and the subsequent appeal by the assessee challenging the decision.

Issue 1: Confirmation of Cash Deposit Addition
- The assessee, engaged in booking railway tickets, declared income for A.Y. 2017-18 but faced scrutiny due to significant cash deposits, including Rs. 13,57,110 during demonetization.
- The Assessing Officer raised concerns about the source of cash deposits, as the assessee failed to prove the availability of such funds.
- Despite the submission of detailed evidence by the assessee, including bank statements and transaction records, the ld. CIT(A) upheld the addition, citing lack of documentary proof.
- The Tribunal reviewed the case, acknowledging the assessee's business nature, regular cash transactions, and remittance of funds to IRCTC, ultimately allowing the appeal based on the evidence presented.

Key Takeaways:
- The assessee's business activities, cash flow statements, and client details played a crucial role in proving the legitimacy of cash deposits.
- The Tribunal highlighted the lack of investigation by the Assessing Officer into the business operations and transactions of the assessee.
- Reference to relevant case laws supported the assessee's position regarding the nature of cash deposits and the absence of double taxation implications.
- The Tribunal emphasized the assessee's compliance with business norms and the absence of concrete evidence to challenge the source of cash deposits.