Sh. Gopal Aggarwal Vs ITO (ITAT Delhi)
In this case, the assessee, a grain trader, faced addition under Section 69A for substantial cash deposits of ₹9.25 crore across multiple bank accounts, which the Assessing Officer treated as unexplained due to lack of supporting evidence. The assessee contended that the deposits were sourced from business cash sales and redeposit of earlier withdrawals. The CIT(A) accepted part of the explanation, treating ₹2.72 crore as explained and holding that the remaining deposits could not be fully reconciled due to lack of one-to-one correlation. To balance revenue interests, the CIT(A) sustained 10% of the remaining deposits as unexplained income. On further appeal, the ITAT observed that the AO’s additions were largely presumptive and unsupported by evidence. Considering the facts and to ensure substantial justice, the Tribunal reduced the addition from 10% to 5% of the remaining deposits, thereby granting partial relief to the assessee.
Core Issue:- The primary issue before the Tribunal was whether the addition made under section 69A on account of large cash deposits in bank accounts was justified, and if not, to what extent such deposits could reasonably be treated as unexplained in the absence of one-to-one correlation between cash deposits and sources such as cash sales and withdrawals.
