Rishi L Anandani Vs ITO (ITAT Raipur)
GST Clients’ Cash ≠ Unexplained Money— Advocate’s Bank Deposits Were Clients’ Tax Money – No Enquiry, No Evidence, No 69A- ITAT Deletes 69A Addition
Assessee, an advocate practicing in Income Tax & GST, declared income of Rs.3,98,320. Case was selected for limited scrutiny to verify cash deposits during demonetisation. AO added Rs.4,49,000 u/s 69A as unexplained money, holding that Assessee failed to give acceptable explanation for deposits of Rs.3,41,000 in current account & Rs.45,000 in savings account in old currency. Assessee explained that amounts belonged to clients from rural areas who paid him in cash for GST challan payments & other statutory compliances; he deposited cash only to make online tax payments on their behalf. He also stated that he had uploaded more than 100 challans as evidence of such client-wise payments.
Tribunal observed that both AO & CIT(A)/NFAC ignored all evidences, conducted no enquiry, & summarily rejected Assessee’s explanation. Tribunal recognised that in GST practice, it is a common & accepted practice for clients to hand over cash to advocates for online compliance due to lack of banking literacy in rural areas. Department failed to show that cash belonged to Assessee or that he had any undisclosed income source. There was complete absence of fact-finding by department despite availability of verification mechanisms.
