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2022 (9) TMI 790 - AT - Income TaxUnexplained cash deposits - non explanation to source of cash deposit with supporting evidences - assessee explanation to re-deposit done after five months is too farfetching - HELD THAT - Addition which are claimed by the assessee are nothing but re-deposits in the bank account which was not verified by the Ld. AO. Further the claim of the assessee that the deposit made by respective other persons have suffered tax in their hands and again bringing to tax in the hands of the assessee will amount to double taxation, which is not permissible under law. To meet the ends of justice, we deem fit that the case be remitted to the file of the AO to verify the same by providing an opportunity to the assessee to explain its case and then complete the assessment in accordance with law. The assessee is directed to cooperate with the AO by producing all the necessary evidences before him. Thus, the grounds raised by the assessee is partly allowed.
Issues:
1. Assessment of unexplained cash deposit in bank account. 2. Appeal against addition of unexplained cash deposit. 3. Double taxation concerns and remand to Assessing Officer. Issue 1: Assessment of unexplained cash deposit in bank account The appeal was filed by the assessee against the Commissioner of Income Tax (Appeals) order related to an assessment under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961 concerning the A.Y. 2007-08. The Assessing Officer found that the assessee deposited Rs. 14,50,000 in cash in a bank account without filing a Return of Income. The assessee claimed that the cash was deposited jointly with four others, but failed to provide supporting evidence for the source of the deposit. Consequently, the AO added the entire cash deposit as unexplained income to the assessee's total income. Issue 2: Appeal against addition of unexplained cash deposit The assessee appealed to the CIT(A) and submitted a written explanation regarding the cash deposits. The CIT(A) sought a remand report from the AO, who found the explanation unsatisfactory as no evidence was provided for the cash deposits by the other joint holders. The CIT(A) partially allowed the appeal, confirming an addition of Rs. 5.5 lakhs while deleting the remaining Rs. 9 lakhs. The assessee then appealed to the ITAT, claiming that the deposits were re-deposits and that the same amount had already been taxed in the hands of the other joint holders, raising concerns of double taxation. Issue 3: Double taxation concerns and remand to Assessing Officer During the hearing at the ITAT, the assessee argued that the deposits were re-deposits and that the same amount had already been taxed in the hands of the other joint holders, leading to potential double taxation. The ITAT considered the submissions and directed the case to be remitted to the AO for verification, emphasizing that double taxation is not permissible under the law. The ITAT instructed the assessee to cooperate with the AO and provide necessary evidence for proper assessment. In conclusion, the ITAT allowed the appeal for statistical purposes, remanding the case back to the AO to verify the claims of re-deposits and avoid potential double taxation. The decision highlighted the importance of proper verification and avoiding double taxation in assessing unexplained cash deposits.
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