Rampal Singh Vs ITO (ITAT Agra)
Cash Withdrawal Is Not Unexplained Money—₹1.09-Crore Addition u/s 69A Sent Back &; Penalty u/s 271AAC Loses Its Foundation
Summary:
One Assessment, Two Appeals
The Assessee filed two interconnected appeals. The first challenged an addition of ₹1,09,73,000 u/s 69A r.w.s. 115BBE, while the second challenged consequential penalty of ₹8,47,664 u/s 271AAC(1).
The Assessee, an individual engaged in supplying & selling cow fodder, had not filed his return for AY 2018-19 because, according to him, his income was below the taxable limit.
The AO received information that the Assessee had deposited cash of ₹2 lakh & withdrawn cash of ₹1,07,73,000 from his Canara Bank account. Notice u/s 148 was issued on 26.03.2022, followed by notices u/s 142(1) & a show-cause notice.
As there was no compliance, the AO completed the assessment ex parte u/s 144 r.w.s. 147 & added the aggregate amount of ₹1.09 crore u/s 69A.
Even Withdrawals Were Treated as Unexplained Money
The AO treated the cash deposit of ₹2 lakh as unexplained because no evidence regarding its source was furnished.
More unusually, the AO also treated the cash withdrawals of ₹1.0773 crore as unexplained money. It was presumed that the withdrawals must have arisen from unaccounted credits in the bank account.
