Basaveshwar Housing Co-operative Society Limited Vs ITO (ITAT Bangalore)
Software Migration Cannot Migrate Cash into Unexplained Money—ITAT Restores ₹1.63 Crore Addition u/s 69A for Member-Wise Verification
The controversy
The assessee, Sri Basaveshwar Housing Co-operative Society Ltd., was engaged in providing credit facilities to its members. For AY 2022-23, its case was selected for scrutiny under CASS because of high-value cash deposits reported through SFT.
During assessment, the AO noticed aggregate cash deposits of ₹1,63,29,392 in three bank accounts. The deposits comprised ₹86,80,390 in an Axis Bank current account, ₹57,08,827 in an account with CBS Sahakari Bank & ₹19,40,175 in another CBS Sahakari Bank account allegedly standing in the name of the Society’s manager.
The Society explained that the cash came from its members in the ordinary course of business, primarily towards repayment of loans & deposits into members’ savings accounts.
However, it failed to produce complete books, member-wise particulars & supporting evidence. The AO consequently treated the entire amount as unexplained money u/s 69A.
Basic particulars were not furnished
The Society claimed that cash acceptance formed an integral part of its business as a co-operative credit institution. The deposits did not represent its undisclosed money but amounts collected from identifiable members and recorded in the regular accounts.
