2024 (3) TMI 544 - AT - Income Tax

Taxability of cash deposits as unexplained u/s 69A r.w.s. u/s. 115BBE - cash deposited in the bank accounts have not been shown as recorded or explained in the books of account of the assessee and the assessee has failed to satisfactorily explain the source of cash deposits - HELD THAT - Assessee under consideration is running the same business, as he was running in the assessment year 2013-14, there is no change in the facts of the assessee's case. No merit in the arguments of Revenue to the effect that assessee s facts are different in assessment year 2017-18. CIT(A) in assessment year 2013-14, held that considering the facts of the case and history of the appellant s case, the unexplained cash deposits are taken as turnover and profit at the rate of 3.5% is estimate on such turnover. Thus, we note that the Department/Revenue has accepted the claim of the assessee and taxed the turnover @ 3%. Thus, at the cost of repetition we state that there is no change in assessee s facts and circumstances of the present case and assessee s business remain same and facts also remain same, therefore we note that unexplained cash deposit may suffer the tax @ 3.5% on estimated basis. Therefore, we direct the AO to treat amount deposited in the bank account, as a part of assessee s business turnover, and to be taxed @ 3.5% - Since, the turnover is out of assessee s own business hence no question arises to tax the same u/s. 115BBE of the Act, therefore we direct the AO to tax the assessee s estimated addition under normal rate of tax. Credit of TDS deducted on the interest on Fixed Deposit - HELD THAT - We have heard both the parties and note that if the assessee is entitled to take credit of TDS deducted on the interest on Fixed Deposit the same should be allowed to the assessee. Therefore, we direct the Assessing Officer to allow credit of TDS deducted on the interest on Fixed Deposit in accordance with law. In the result, ground raised by the assessee is allowed for statistical purposes.

Issues Involved:
The issues involved in this judgment include the assessment year 2017-18, additions made under sections 69A and 69 of the Income Tax Act, 1961, interest on bank F.D., tax implications under section 115BBE, TDS credit on interest on Fixed Deposit, and interest charged under sections 234A and 234B of the Act.

Summary of the judgment:
The appeal filed by the assessee challenged the order passed by the National Faceless Appeal Centre, Delhi, arising from an assessment order by the Assessing Officer under section 144 of the Income Tax Act, 1961.

The grounds of appeal raised by the assessee included challenging the dismissal of the appeal, sustaining additions made under sections 69A and 69 of the Act, interest on bank F.D., tax implications under section 115BBE, TDS credit on interest on Fixed Deposit, and interest charged under sections 234A and 234B of the Act.

The Assessing Officer found that the cash deposited during demonetization raised doubts on its source, leading to additions under section 69A. The CIT(A) confirmed the Assessing Officer's decision, prompting the appeal.

The Tribunal noted that the assessee's case was similar to a previous assessment year where additions were made at a certain percentage on cash deposits. Consequently, the Tribunal directed the Assessing Officer to tax the cash deposits at 3.5% as part of the turnover.

Regarding the TDS credit on interest on Fixed Deposit, the Tribunal directed the Assessing Officer to allow the credit in accordance with the law.

The Tribunal deemed the interest charged under sections 234A and 234B as consequential and did not require further adjudication.

In conclusion, the appeal was partly allowed, with specific directions given for the treatment of cash deposits, TDS credit, and the interest charged under sections 234A and 234B of the Act.

← Previous Next →