2024 (11) TMI 81 - AT - Income Tax

Addition made u/s 69A - substantial cash deposit in her bank accounts during demonetization period - HELD THAT - There was no assistance from the assessee in furnishing any documents to prove the sources of cash deposits in her bank accounts. The ld. CIT(A) confirmed the order of the Assessing Officer only on the impression why the third party has to gfive cash to the assessee for transfer of money when all the citizens can open a bank account in their name and many rural branches are opened with a view to give banking access to all the citizens of this country. It is clear from the observations that the ld. CIT(A) did not believe the submissions of the assessee and doubted the business activities, which are narrated before us by the ld. AR herein above. Since the ld. AR able to show the required documents before us in support of the claim of the assessee, we deem it proper to remand the matter to the file of the Assessing Officer for fresh consideration. The assessee is at liberty to file evidences, if any, before the Assessing Officer. Thus, ground Nos. 2 3 raised by the assessee are allowed for statistical purposes. Addition towards business income of the assessee - For the assessment year under consideration, since the Assessing Officer is required to determine the income of the assessee on verification of Form 26AS, we deem it proper to remand the matter to the file of the Assessing Officer for fresh consideration. The assessee is at liberty to file evidences, if any, before the Assessing Officer. Thus, ground Nos. 4 5 raised by the assessee are allowed for statistical purposes.

Summary

Issues:
1. Addition made under section 69A of the Income Tax Act, 1961.
2. Confirmation of business income addition by the ld. CIT(A).

Issue 1: Addition made under section 69A of the Income Tax Act, 1961

The appeal was against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The Assessing Officer added substantial cash deposits made by the assessee during the demonetization period to her income under section 69A of the Act. The ld. CIT(A) confirmed this addition. The assessee, a distributor in a money transfer scheme, argued that the deposited funds were part of her business activities and commission income. The assessee did not file a return of income as her total income did not exceed the basic exemption limit. The Tribunal noted that the assessee did not provide necessary documents to prove the sources of cash deposits. The matter was remanded to the Assessing Officer for fresh consideration, allowing the assessee to submit additional evidence.

Issue 2: Confirmation of business income addition by the ld. CIT(A)

The ld. CIT(A) confirmed the addition towards business income of the assessee at a specific amount. The assessee contended that in a subsequent assessment year, the Assessing Officer applied a different rate to estimate her income. The Tribunal found that for the assessment year under consideration, the Assessing Officer needed to verify Form 26AS to determine the income accurately. Therefore, the matter was remanded to the Assessing Officer for fresh consideration, allowing the assessee to provide any additional evidence. Consequently, the appeal filed by the assessee was allowed for statistical purposes.

In conclusion, the Tribunal remanded both issues back to the Assessing Officer for fresh consideration, providing the assessee with an opportunity to submit additional evidence. The appeal was allowed for statistical purposes, emphasizing the importance of accurate income determination and proper documentation in tax assessments.