2020 (7) TMI 491 - AT - Income Tax

Unexplained cash deposits in Bank Account - undisclosed income - HELD THAT - Documentary evidences brought to our notice. It is true that neither the Assessing Officer nor the first appellate authority has made any comment on the sufficient cash withdrawals made by the husband of the assessee from Syndicate Bank Account. It is equally true that there is nothing on record to suggest that these withdrawals were utilised by the assessee or her husband (during his life time) for some other purposes. These documentary evidences need to be examined. - Matter remanded back to AO.

Summary

Issues:
Confirmation of addition made by the Assessing Officer regarding cash deposit in the HDFC Bank account.

Analysis:
The appeal was filed by the assessee against the order of the CIT(A) confirming the addition of ?40.10 lakhs made by the Assessing Officer. The source of this cash deposit in the HDFC Bank account was questioned during scrutiny assessment. The assessee explained that the cash was found stashed in an almirah after the demise of her husband and was immediately deposited to repay a loan taken from Syndicate Bank. However, the Assessing Officer treated the deposit as undisclosed income, leading to the addition. The CIT(A) dismissed the assessee's contention, stating that the source was not corroborated by concrete evidence.

During the appeal before the ITAT, the assessee's counsel presented details of cash withdrawals and deposits in the Syndicate Bank account, emphasizing that there was sufficient cash available for the deposit. The counsel argued that the withdrawals exceeded the deposits, questioning the basis for sustaining the addition. The ITAT noted that neither the Assessing Officer nor the CIT(A) commented on the cash withdrawals made by the husband of the assessee from the Syndicate Bank account, and there was no evidence indicating the utilization of these withdrawals by the assessee or her husband for other purposes.

The ITAT decided to restore the issues to the file of the Assessing Officer for further examination. The Assessing Officer was directed to review the cash withdrawals statement in comparison to the bank statement. If the withdrawals covered the deposits, the source of the deposit should be accepted. The assessee was to be given a reasonable opportunity for verification of the documents. Consequently, the appeal of the assessee was treated as allowed for statistical purposes, with the order pronounced on 03.06.2020.