Jivarajbhai Ramabhai Chaudhary Patel Vas Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that addition towards unexplained cash deposits not justified as CIT(A) has partly accepted the cash book and partly rejected the cash book without assigning any reason. Accordingly, appeal allowed.
Facts- The issue arising in the present appeal relates to addition made to the income of the assessee on account of cash found deposited in his bank account to the tune of Rs.14,98,000/- during demonetization period remaining unexplained. None appeared during assessment proceedings therefore the Assessing Officer, passed an exparte order under section 144 of the Act
CIT(A) further noted that the actual cash deposits during the demonetization period was Rs.15,36,000/- while the AO had considered cash deposits of only Rs.14,98,000/-. CIT(A), accordingly, added the balance of Rs.3,05,000/- to the income of the assessee and enhanced the assessed income by this extent. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessee had justified the cash deposits in his bank account by furnishing cash book showing all the cash deposits to be attributed to the business of selling sweets and namkeen. The cash deposits, with which, the AO was seized of and which he added to the income of the assessee, related to the demonetization period only, and not the whole year. What the ld.CIT(A) has done was that, he accepted a part of the cash book as correct and rejected other part as incorrect without giving any reasons for the same. The ld.CIT(A) has accepted the cash balance, appearing in the cash book on the first day of the demonetization period i.e. 6.11.2016, which in fact means that he has accepted the transactions noted in the cash book from the first day of the impugned financial year, i.e. 1.4.2016, upto 6.11.2016. Thereafter, the transactions relating to the demonetization period have been rejected by him, that too, for no reason at all.
