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2025 (1) TMI 1060 - AT - Income TaxAddition u/s 69A - cash deposit in the bank account unexplained - HELD THAT - Assessee has deposited cash in the bank account not only in this year but in previous years and subsequent years also. The assessee also deposited cash in bank account before and after the demonetization period in the same pattern hence cash deposit in the bank account during the year under consideration should not be doubted. We do not find exceptional or abnormal cash deposit in the bank account. Assessee has furnished plethora of documents and evidences before the AO as well as before the CIT(A) to prove genuineness of the cash deposit in the bank account which were not appreciated by both the lower authorities. AO has not refuted or discredited these evidences and documents. AO does not mention why he is not accepting these evidences. On the contrary the assessing officer has just brushed aside these evidences without even a word on why they are not acceptable. 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 are not inclined to accept the contention of the Assessing Officer in any manner and hence the addition so made is deleted. Hence this ground of the assessee is allowed. 1. ISSUES PRESENTED and CONSIDERED The core legal question in this judgment is whether the addition of Rs. 22,78,500/- to the assessee's income, based on unexplained cash deposits during the demonetization period, was justified under Section 69A of the Income Tax Act, 1961. 2. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The case involves the application of Section 69A of the Income Tax Act, which deals with unexplained money, requiring the assessee to satisfactorily explain the source of any money found in their possession. If the explanation is not satisfactory, the amount may be deemed to be the income of the assessee. Court's Interpretation and Reasoning The tribunal scrutinized whether the assessee satisfactorily explained the source of the cash deposits. The court acknowledged that the assessee had provided substantial documentation, including balance sheets, cash books, and confirmation ledgers from debtors, to substantiate the claim that the cash deposits were from legitimate business transactions. Key Evidence and Findings The assessee submitted various documents, including balance sheets for the financial years 2014-15 to 2016-17, income tax returns for the relevant assessment years, and cash books. These documents showed an opening cash balance and cash transactions consistent with previous years. The tribunal noted that the assessing officer did not cross-verify the confirmation ledgers of debtors or refute the evidence provided. Application of Law to Facts The tribunal applied Section 69A and emphasized the importance of evidence provided by the assessee. It noted that the assessing officer failed to adequately consider the submitted documents and did not provide reasons for dismissing them. The tribunal concluded that the cash deposits were consistent with the assessee's business operations and previous patterns. Treatment of Competing Arguments The tribunal considered the arguments from both the assessee and the revenue. The assessee argued that the cash deposits were part of regular business transactions and supported by adequate documentation. The revenue, represented by the assessing officer, maintained that the deposits were unexplained. The tribunal found the assessee's arguments more convincing due to the lack of contrary evidence from the revenue. Conclusions The tribunal concluded that the addition of Rs. 22,78,500/- was unjustified. It held that the assessing officer's decision was based on insufficient consideration of the evidence and that the assessee had adequately explained the source of the cash deposits. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning "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." Core Principles Established
Final Determinations on Each Issue The tribunal allowed the appeal filed by the assessee, thereby deleting the addition of Rs. 22,78,500/- to the assessee's income. The tribunal's decision was based on the adequate explanation and evidence provided by the assessee regarding the cash deposits.
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