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2024 (8) TMI 862 - AT - Income TaxCash deposited in bank and excess cash in hand - assessee was selected for Limited scrutiny under CASS - Assessee furnished various details and information as sought by AO, thus completed assessment by making three additions, Cash deposits, excess of closing cash in hand over opening balance of cash in hand (plus net income for the year) by alleging the same as undisclosed income and debtors balance on the ground that there were not debtors in preceding year - CIT(A), who partly allowed relief - HELD THAT - The Bench has taken into consideration the submissions of the assessee from which it appears that the ld. AR of the assessee neither substantiated nor produced any documentary evidence to controvert the findings of the ld CIT(A). In this situation, the Bench has no other alternative except to confirm the action of the ld. CIT(A). Thus the appeal of the assessee is dismissed.
Issues Involved:
1. Addition of Rs. 8,50,000/- on account of cash deposit in the bank account. 2. Addition of Rs. 10,48,737/- due to the difference in cash balance as on 31.03.2016 vis-a-vis 31.03.2015. 3. Addition of Rs. 3,75,400/- on account of sundry debtors. Issue-wise Detailed Analysis: 1. Addition of Rs. 8,50,000/- on Account of Cash Deposit in the Bank Account: The assessee challenged the addition of Rs. 8,50,000/- made by the Assessing Officer (AO) on the grounds that the case was selected for limited scrutiny to examine cash deposits during the demonetization period, which occurred after the financial year 2015-16. The assessee argued that the AO exceeded the scope of limited scrutiny by making additions for cash deposits made prior to the demonetization period without converting the limited scrutiny to complete scrutiny as per CBDT guidelines. The CIT(A) observed that the AO acted within the scope of limited scrutiny as the assessment was selected to verify whether the belated ITR was filed to justify cash deposits during demonetization. The AO found that the assessee deposited Rs. 8,50,000/- in the bank account during the financial year 2015-16 and failed to provide satisfactory evidence for the source of these deposits. The CIT(A) upheld the addition, stating that the assessee did not substantiate the source of cash deposits with documentary evidence. 2. Addition of Rs. 10,48,737/- Due to Difference in Cash Balance: The assessee contended that the AO made an addition of Rs. 10,48,737/- due to the difference between the cash in hand as on 31.03.2016 and 31.03.2015 without following the proper procedure for converting limited scrutiny to complete scrutiny. The AO observed that the assessee had an opening cash balance of Rs. 23,150/- as on 31.03.2015 and a closing cash balance of Rs. 12,45,770/- as on 31.03.2016, resulting in an unexplained difference of Rs. 10,48,737/-. The CIT(A) confirmed the addition, noting that the AO sought information related to the asset side of the Balance Sheet to verify whether the belated ITR was filed to justify cash deposits during demonetization. The assessee failed to provide satisfactory evidence for the increase in cash in hand. The CIT(A) concluded that the assessee's explanation was not acceptable and upheld the addition of Rs. 10,48,737/-. 3. Addition of Rs. 3,75,400/- on Account of Sundry Debtors: The AO made an addition of Rs. 3,75,400/- on account of sundry debtors, stating that the assessee did not show any sundry debtors in the Balance Sheet for the preceding year. The CIT(A) deleted this addition, observing that the gross receipts as per the Profit and Loss Account exceeded the sundry debtors shown in the Balance Sheet. The CIT(A) held that the AO could not add the sundry debtors without any evidence to prove that they were non-genuine. Final Decision: The Tribunal dismissed the appeal of the assessee, confirming the additions of Rs. 8,50,000/- and Rs. 10,48,737/- made by the AO and upheld by the CIT(A). The addition of Rs. 3,75,400/- on account of sundry debtors was deleted by the CIT(A) and was not contested further. The Tribunal noted that the assessee failed to substantiate the claims with documentary evidence and upheld the findings of the CIT(A).
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