2022 (11) TMI 369 - AT - Income Tax

Addition being deposit in Bank - HELD THAT - As assessee has submitted the cash deposit summary before the lower authorities. The proof of amount received from his father as a gift is placed at record. The assessee has business receipts from Kishorbhai Sheladiya, assessee has received business receipts from Bramani Fashion, business receipts and assessee has withdrawn cash on 20.03.2014. This way the assessee has explained the cash deposit. We note that all the evidences pertaining to this cash receipts have been furnished before the lower authorities and they did not point out any defects in the evidences and the documents submitted by the assessee. We note that Ld. CIT(A) has not refuted or discredited these evidences and documents submitted by the assessee. The Ld. CIT(A) did not mention in his order that why he is not accepting these evidences submitted by assessee. It is a well-settled law that when an assessee has all the possible evidence in support of its claim, they cannot be brushed aside based on surmises. Hence, we delete the addition sustained by ld. CIT(A). Appeal filed by the assessee is allowed.

Summary

Issues:
1. Addition of unexplained cash deposit in bank account.

Analysis:
The appeal was filed by the assessee against the order passed by the Learned Commissioner of Income Tax (Appeals) concerning the Assessment Year 2014-15, which originated from an order by the Assessing Officer under section 144 of the Income Tax Act, 1961. The primary issue raised by the assessee was regarding the addition of Rs.8,75,000/- as a deposit in the bank account. The Assessing Officer observed total cash deposits of Rs.11,54,350/- in the assessee's bank account but the assessee failed to provide any explanation regarding the source of these deposits, leading to the addition in the total income for the relevant assessment year.

Upon appeal, the Learned Commissioner partly allowed the appeal, confirming the addition of Rs.8,75,000/- while deleting the remaining amount. The Commissioner noted that the appellant failed to discharge the primary onus of explaining the source of the cash deposits. However, additional evidences submitted by the appellant were admitted, and the Commissioner considered the explanation provided for a portion of the cash deposits. The Commissioner found the appellant's reasons for non-production of certain evidence reasonable, leading to the admission of additional evidences.

During the proceedings, the assessee's counsel argued that the appellant, being a small trader, had submitted additional evidences which were considered by the Commissioner for partial relief. The counsel contended that the appellant had sufficiently explained the cash deposits with supporting evidence. On the other hand, the Revenue's representative argued against the reliability of the explanations provided by the assessee, especially regarding the sale of machinery without detailed financial implications.

After considering the submissions and evidence presented, the Tribunal noted that the assessee had provided a detailed explanation and supporting documents for the cash deposits. The Tribunal found that all relevant evidence had been furnished before the lower authorities, and there were no defects pointed out in the evidence by the authorities. Noting that the Commissioner did not discredit or refute the evidence submitted by the assessee, the Tribunal ruled in favor of the assessee, deleting the addition sustained by the Commissioner.

In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing the importance of providing substantial evidence to support claims and highlighting that evidence should not be disregarded based on assumptions. The decision was pronounced on 17/10/2022, with the appeal being allowed in favor of the assessee.