Case Law Details
Shri Krishnapandian Balaji Vs DCIT (ITAT Chennai)
Introduction: Delve into the intricacies of the case involving Shri Krishnapandian Balaji and the Deputy Commissioner of Income Tax (DCIT) as the Income Tax Appellate Tribunal (ITAT) Chennai addresses the issue of unexplained cash deposits during the demonetization period. The crux of the matter revolves around the assessee justifying the source of cash as rental income generated from various properties. This article provides an in-depth analysis of the proceedings and the tribunal’s decision.
Detailed Analysis: The article presents a comprehensive analysis of the arguments put forth by both parties. The Assessing Officer (AO) raised concerns about the substantial cash deposits made by the assessee during demonetization, especially noting the apparent inconsistency in the cash in hand figures between the income tax return (ITR) and the cash book. The ld. counsel for the assessee clarified that the cash mentioned in the ITR pertains to business cash in hand, not individual cash earned from rental income.
Emphasizing the maintenance of separate personal and business accounts, the counsel argued that the declared ‘nil’ cash in hand in the business account does not negate the existence of individual cash, particularly earned from rental income. The ld. counsel supported the claim with detailed documentation, including statements of income, rental income property-wise, month-wise details of rent received, and cash book extracts.
During the proceedings, the Bench raised specific queries about the AO’s observation of ‘nil’ closing cash as per ITR, and the counsel provided a clear explanation, highlighting the individual capacity in maintaining personal accounts. The Senior DR failed to counter these explanations, and the presented facts remained uncontroverted.
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