Ashok Desing Naik Vs ITO (ITAT Bangalore)
In a notable ruling, the Income Tax Appellate Tribunal (ITAT) Bangalore has deleted an addition of Rs. 31,79,134/- made by the Assessing Officer (AO) to the income of Ashok Desing Naik for unexplained cash deposits in bank accounts. The Tribunal found that the assessee had sufficient sources of income to cover the deposits, highlighting errors in the AO’s calculation of cash deposits and his failure to consider the opening cash balance.
The case pertains to the Assessment Year 2015-16. The AO had identified total cash deposits of Rs. 4,23,00,681/-, including Rs. 1,94,56,681/- in IDBI Bank and Rs. 2,28,44,000/- in State Bank of India. After allowing for sales disclosed in VAT returns amounting to Rs. 3,91,21,547/-, the AO made an addition for the excess cash deposit.
However, the assessee’s representative contended that the AO’s calculations contained two significant errors. Firstly, it was argued that the actual cash deposit in IDBI Bank was Rs. 1,81,48,430/-, not Rs. 1,94,56,681/- as stated by the AO. The assessee provided a bank statement and a date-wise chart of cash deposits to substantiate this claim. The Tribunal, upon comparing these documents with the AO’s figures, identified specific dates where deposits were incorrectly classified as cash deposits when they were, in fact, transfers or clearing entries, totaling Rs. 13,08,251/-. When this amount was excluded from the AO’s figure, the IDBI Bank cash deposit reconciled with the assessee’s submission.
