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2022 (7) TMI 728 - AT - Income TaxUnexplained cash deposits - A.O. had information that there was cash deposit during the year in 16 bank accounts of the assessee - CIT-A deleted the addition - HELD THAT - The issue of cash deposits in the bank account of the assessee has been examined exhaustively at various levels and no merit has been found in the contention of the Revenue that it represented any undisclosed income of the assessee, noting the fact that the assessee was into business of Shroff and earned only commission on the monetary transactions carried out by it; the cash deposits representing money belonging to his customers. Even the AO in reassessment proceedings for the impugned year was convinced that the cash deposits in another bank account of the assessee related to the assessee money lending business. Therefore there is no reason to uphold the original assessment order of the same AO holding them to be unexplained when subsequently he was convinced that the assessee being in money lending business the cash deposits related to the same. We see no reason to interfere in the order of the Ld. CIT(A) deleting the addition made of cash deposits. - Decided against revenue.
Issues:
1. Addition made on account of unexplained cash deposits of Rs.224,53,23,993/-. Detailed Analysis: 1. The appeal was filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals) pertaining to Assessment Year 2012-13. The solitary issue in the appeal related to the addition made to the income of the assessee on account of unexplained cash deposits of Rs. 224.53,23,993/-. 2. The assessee, engaged in the business of Shroff and cheque discounting, explained that the cash deposits were collected from customers or on behalf of customers and did not belong to the assessee. The Assessing Officer (AO) added the entire cash deposit to the income of the assessee as unexplained under section 68 of the Income Tax Act, 1961. 3. The ld. CIT(A) considered the previous judgments in the case of the assessee for other assessment years where similar additions were made and subsequently deleted. The High Court had quashed the reopening of the case for A.Y. 2008-09, noting that the appellant was engaged in the business of Shroff and cheque discounting, charging only commission. The CIT(A) noted that the transactions were reflected in the regular books of accounts and no undisclosed income was found. 4. The ld. CIT(A) observed that the reopening for the impugned year was also dropped by the AO following the judgment of the High Court. The CIT(A) deleted the addition of cash deposits, emphasizing that the cash deposits related to the business of the assessee and did not represent any undisclosed income. 5. The Tribunal found no infirmity in the CIT(A)'s order and dismissed the Revenue's appeal. It was established that the cash deposits were related to the money lending business of the assessee, and no undisclosed income was involved. The AO, in reassessment proceedings, acknowledged that the cash deposits were part of the assessee's business activities. 6. The Tribunal upheld the CIT(A)'s decision to delete the addition of cash deposits amounting to Rs. 224.53,23,993/-, as the issue had been thoroughly examined, and it was evident that the cash deposits were not unexplained income. The appeal filed by the Revenue was dismissed, confirming the deletion of the addition. In conclusion, the Tribunal affirmed the CIT(A)'s decision to delete the addition of unexplained cash deposits, as the cash deposits were found to be related to the legitimate business activities of the assessee, and no undisclosed income was detected.
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