2023 (3) TMI 409 - AT - Income Tax

Addition u/s 69A - Unexplained cash deposits during demonetization period - unexplained income of the Appellant - case was taken up for limited scrutiny under CASS for depositing cash during the demonetization period - Assessee explained it as savings and gifts received by the appellant on occasion of first marriage and also on occasion of fixation of second marriage in 2016 - as contended that depositing money in bank account is one form of investment on which the assessee was earning interest and the addition could have been made u/s 69 only and not u/s 69A - HELD THAT - The assessee has not filed any cash flow statement. However, it cannot be presumed that assessee was not having any cash in hand or past savings. Looking to the facts and circumstances, I deem it fit and proper to restrict the addition to the extent of 30%. I order accordingly.

Summary

Issues involved: Appeal against order of Commissioner of Income-tax (Appeals) regarding assessment year 2017-18.

Grounds of Appeal:
1. The appellant challenges the first Appellate Order for lack of opportunity to be heard.
2. Dispute over assessment of total income and addition u/s 69A.
3. Imposition of section 115BBE on alleged unexplained income.
4. Allegation of non-consideration of submissions by CIT (A).
5. Challenge to charging of interest u/s 234B.
6. Challenge to charging of interest u/s 234C.

Details of Judgment:
1. The case involved the appellant's cash deposits during demonetization period, treated as unexplained income by Assessing Officer (AO) leading to additions.
2. The appellant contended the deposits were from gifts received during marriages and past savings, challenging the sustained addition.
3. The AO's decision to invoke section 69A instead of section 69 for additions was questioned, alleging procedural irregularity.
4. The appellant argued that the authorities failed to consider explanations regarding gifts and past savings, impacting the assessment.
5. The Tribunal found merit in the appellant's contentions, restricting the addition to 30% of the disputed amount.
6. Consequently, the appeal was partly allowed, providing relief to the appellant on the disputed additions.

This judgment highlights the importance of considering all explanations and evidence presented by the assessee in income tax assessments, ensuring proper application of relevant provisions to avoid procedural irregularities and ensure fair treatment in tax matters.