ITO Vs Chennarapu Ashok Kumar (ITAT Hyderabad)
Hyderabad ITAT Orders Fresh Verification of Cash Deposits Due to Lack of Supporting Evidence; Section 69A Addition Sent Back for Reconsideration Because Business Receipts Claim Was Unverified; ITAT Says Cash Deposits Cannot Be Accepted as Business Receipts Without Proper Proof; Hyderabad ITAT Finds CIT(A) Relied on Financial Statements Without Adequate Evidence.
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) dealt with a Revenue appeal against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for Assessment Year 2017-18.
The assessee had not filed a return of income under Section 139 of the Income-tax Act, 1961. The assessment was reopened under Section 147, and notices under Sections 148 and 142(1) were issued seeking explanations regarding large cash deposits, cash withdrawals, and insurance commission receipts. Initially, the assessee did not respond. Later, in response to a notice dated 14.01.2022, the assessee filed a return declaring total income of Rs.10,77,510.
The Assessing Officer (AO) observed that the assessee had deposited Rs.8.87 crore in cash into a current account maintained with Andhra Bank and had withdrawn Rs.1.10 crore from the same account. Since the assessee failed to explain the source of the deposits or furnish supporting details, the AO treated the cash deposits as unexplained money under Section 69A read with Section 115BBE of the Act. The AO also made an addition towards insurance commission income.
