2023 (6) TMI 762 - AT - Income Tax

Addition u/s 69A - Unexplained source of cash deposit - HELD THAT - None of the authority had rejected the assessee s cash flow statement. The assessee had sufficient cash before the date of deposit of cash in bank. As per the submission of assessee, the sufficient cash balance is reflected on dated 27.12.2016. The opening cash is reflected amount which had sufficient to deposit the cash amount in the bank a/c of the assessee. CIT(A) had not made any proper reason for disallowance of balance amount. The assessee explained properly the source for depositing of cash in bank account. The entire evidence stands in favour of assessee.

Summary

Issues involved:
The appeal against the order of the ld. Commissioner of Income Tax (Appeals) for A.Y. 2017-18 u/s 250 (6) of the Income Tax Act 1961, emanated from the order of the ld. Income Tax Officer u/s 143(3) of the Act.

Grounds of appeal:
- The assessee contested the addition u/s 69A of the Act r.w.s 115BBE regarding cash deposits in the bank account.
- Allegations of the Ld. CIT (A) being arbitrary and overlooking evidence.
- Dispute over addition u/s 69A on cash deposits from explained sources.

Summary of the case:
The assessee deposited Rs. 28,40,000 in a day in State Bank of India, which the AO added back to the total income u/s 69A due to unsatisfactory explanation of the source. The ld. CIT(A) deleted Rs. 20,92,359 of the addition and restricted it to Rs. 7,47,641. The appeal was filed against this remaining addition amount.

Proceedings:
During the hearing, the assessee was absent but had submitted written arguments. The appeal was disposed of considering the written submission and material on record.

Arguments and Evidence:
- The ld. DR supported the revenue authorities' order.
- The assessee presented a detailed submission, cash flow statement, bank statement, and cash book. These documents were submitted to the AO and CIT(A) in response to notices.
- The assessee claimed to have sufficient sources for the cash deposit, with evidence showing a balance exceeding the deposit amount before the transaction date.
- The Tribunal found in favor of the assessee, as the evidence supported the explanation for the cash deposit, leading to the quashing of the remaining addition of Rs. 7,47,641.

Decision:
The appeal (ITA No. 167/Asr/2019) was allowed, and the addition of Rs. 7,47,641 was set aside in favor of the assessee.

Conclusion:
The Tribunal ruled in favor of the assessee, overturning the addition made by the AO under section 69A of the Income Tax Act, based on the satisfactory explanation and evidence provided regarding the source of the cash deposit.