Anil Kumar Sharma Vs ITO (ITAT Pune)
Pune ITAT: Entire Cash Deposits Cannot Be Taxed Ignoring Frequent Withdrawals – ₹5 Lakh Relief Granted Though Peak-Credit Theory Rejected for Want of Evidence
The Pune ITAT partly allowed the appeal of an assessee engaged in the transport business against an addition of ₹13,76,900 under Section 69A read with Section 115BBE, representing the entire cash deposited in his bank account during the year.
The assessee had not originally filed a return. Based on information regarding cash deposits of ₹13.76 lakh, the assessment was reopened under Section 147. In response, the assessee filed a return declaring income of ₹1,28,718, claiming that the deposits represented receipts from his transportation business. The AO rejected the explanation for lack of satisfactory supporting evidence and treated the entire deposits as unexplained money under Section 69A.
The assessee contended that the AO had looked only at the cash deposits while completely overlooking cash withdrawals of ₹12,87,500 from the very same bank account. Since there were frequent withdrawals and redeposits, he argued that only the peak credit of ₹1,09,700 should be treated as unexplained.
The Tribunal examined the bank statement and confirmed that against aggregate deposits of ₹13,76,900, there were withdrawals aggregating to ₹12,87,500, with frequent deposits and withdrawals throughout the period. The peak credit was ₹1,09,700 on 27 February 2013.
