Siddegowda Channa Basavaiah Vs ITO (ITAT Bangalore)
The Bangalore ITAT deleted the addition of ₹4.81 lakh made under Section 69, holding that the assessee had reasonably explained the source of cash deposits based on surrounding circumstances and human probabilities.
The AO had treated excess cash deposits as unexplained due to:
- Lack of one-to-one correlation between withdrawals and deposits,
- Time gap between withdrawals and redeposit,
- Absence of documentary proof for cash received from relatives.
However, the Tribunal held:
- Strict one-to-one nexus is not required; once overall cash availability is demonstrated, explanation cannot be rejected on technical grounds.
- Bank withdrawals (₹2.90 lakh + ₹1.14 lakh) were undisputed and sufficient to establish availability of cash.
- Contributions of ₹1.5 lakh each from father and father-in-law (agriculturists) were plausible, especially in a cash-based rural economy.
- RTC records support agricultural background, and lack of banking trail cannot be fatal.
The ITAT emphasized:
- In Indian family context, financial support for house purchase is normal, even in cash.
- Preponderance of probabilities is sufficient-proof beyond doubt is not required.
- Suspicion cannot replace evidence.
Further, the Tribunal also considered the assessee’s medical condition, explaining inability to furnish full documentation during assessment.
Accordingly, the assessee was held to have discharged the burden under Section 69, and the addition was deleted in full.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
Paid content
Become a Basic or Premium Member, or log in if you are already a Basic or Premium member.
