Sundarrajan Venkateshkumar Vs ITO (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT), Chennai, partly allowed an appeal by the assessee for the Assessment Year 2017-18, related to an order by the Commissioner of Income Tax (Appeals) [CIT(A)]. The core issue was the addition of Rs. 13.39 Lacs to the assessee’s income, representing cash deposited during the demonetization period, for which the assessee could not provide a satisfactory explanation of the source.
The assessee, a contractor, had deposited the said amount in his bank account, but failed to establish that the cash came from his contractual receipts. While the assessee had offered income on a presumptive basis (8% of turnover), the Assessing Officer added the unexplained cash deposit to his income, and the CIT(A) confirmed this addition. The ITAT acknowledged that the assessee’s income was derived from his work as a contractor. Considering the inability of the assessee to substantiate the source of the deposits, the tribunal estimated the income from the unexplained cash deposit to be 25% of the deposited amount (Rs. 3,34,750/-) and restricted the addition to this revised amount. The ITAT also directed the Assessing Officer to consider the assessee’s claim for a deduction under Chapter VIA for Rs. 1.50 Lacs, subject to the assessee providing the necessary documentation.
