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2020 (2) TMI 351 - AT - Income TaxAddition u/s 69A in respect of the deposits in bank account AND cash deposits in bank account - HELD THAT - Both the authorities below have neither considered the documents filed by the assessee nor has taken into consideration the submissions of the assessee properly. The CIT(A) has himself in para 4.7 has mentioned that in the course of present proceedings the assessee filed certain additional evidence with regard to the sources of cash in hand, opening balance of cash, gifts received in cash of ₹ 1. lac from Smt. Harjinder Kaur, mother of the assessee and also a gift of ₹ 1 lac in cash from Sh. Sukhraj Singh, brother of the assessee. We have also carefully perused the findings of the AO as well as the observations made by the CIT(A) and found that the documents filed by the assessee are necessary for examination of the sources of deposits made in cash and forwarded to the AO for remand report, then it is the duty of the AO to examine the documents and give report properly. As per the ld. AR the affidavit for the gift given by mother and real brother as being out of their savings and the gifts received from family members out of their savings. Documents filed by the assessee are necessary for examination of the sources of deposits made in cash and forwarded to the AO for remand report, then it is the duty of the AO to examine the documents and give report properly. As per the ld. AR the affidavit for the gift given by mother and real brother as being out of their savings and the gifts received from family members out of their savings. Ld. AR of the assessee also tried to justify the cash deposit into his bank account as quoted supra by way of his written submission. Issue needs verification and examination on the part of the AO after considering the submissions of the assessee and the documents to be furnished by the assessee. Needless to say, the assessee shall be given reasonable opportunity of being heard. The assessee is also directed to cooperate with the AO for early disposal of the case and substantiate his claim properly. - Appeal of the assessee is allowed for statistical purposes.
Issues Involved:
1. Addition under Section 69A of ?6,25,000/- for unexplained deposits in the bank account. 2. Addition under Section 69A of ?94,000/- for unexplained cash deposits in the bank account. Issue-wise Detailed Analysis: 1. Addition under Section 69A of ?6,25,000/- for unexplained deposits in the bank account: The assessee, a sales manager at ICICI Prudential Life Insurance Company Limited, had deposited ?7,25,000/- in cash into his bank accounts. The Assessing Officer (AO) accepted ?75,000/- as explained and treated ?6,75,000/- as unexplained. The Commissioner of Income Tax (Appeals) [CIT(A)] reduced this amount to ?6,25,000/-. The assessee argued that the deposits were from cash collected from agents and policyholders, and provided a cash flow statement explaining the deposits. The AO and CIT(A) found the affidavits and explanations provided by the assessee to be insufficient and self-serving without supporting evidence. The Income Tax Appellate Tribunal (ITAT) noted that the assessee had submitted various documents and affidavits to substantiate the cash deposits, which were not adequately considered by the AO and CIT(A). The ITAT emphasized the need for proper verification and examination of the documents submitted by the assessee. Therefore, the ITAT set aside the issue of the ?6,25,000/- addition and remanded it back to the AO for re-examination, directing the AO to provide the assessee with a reasonable opportunity to substantiate his claims. 2. Addition under Section 69A of ?94,000/- for unexplained cash deposits in the bank account: The AO had added ?94,000/- to the assessee's income, comprising ?48,500/- and ?45,500/- as unexplained deposits. The assessee argued that the cash flow statement showed adequate cash available to cover these deposits. The CIT(A) upheld the AO's addition, stating that the assessee failed to substantiate the source of these deposits. The ITAT, considering the submissions and documents provided by the assessee, found that the issue required further verification. The ITAT directed the AO to re-examine the cash deposits of ?94,000/- in light of the cash flow statement and other documents provided by the assessee, ensuring a reasonable opportunity for the assessee to present his case. Conclusion: The ITAT allowed the appeal of the assessee for statistical purposes, remanding both issues back to the AO for re-examination and verification, directing the AO to consider the documents and submissions provided by the assessee and to provide a reasonable opportunity for the assessee to substantiate his claims.
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