Madan Gopal Agarwal Vs ITO (ITAT Delhi)
When Cash book speaks, Addition fails- No Negative balance, No Addition Burden shifts to Revenue – ITAT says cash deposits fully explained
Delhi ITAT has given relief to an assessee by deleting an addition of ₹92.45 lakh made u/s 69 read with section 115BBE, holding that where a properly maintained cashbook shows no negative balance & cash deposits are backed by documented sources, the Revenue must bring material to prove alternative use of funds before making additions.
Assessee filed his return for AY 2015-16 declaring an income of ₹9.60 lakh. His primary business income was from “Bhatta rent” at ₹5.5 lakh per month, aggregating to ₹66 lakh annually. During scrutiny, AO noted cash deposits of ₹92.45 lakh in assessee’s bank account. Despite Assessee furnishing a complete set of supporting documents, including Cashbook for the entire year (01.04.2014 to 31.03.2015), Rent agreements evidencing monthly rent receipts,Ledger accounts, interest receipts & payments ,Bank statements, & audited books of account, e AO rejected the explanation & treated the deposits as unexplained investments u/s 69, taxable at the higher rate u/s 115BBE. CIT(A) upheld this view.
Assessee contended that he had substantial opening cash in hand of ₹36.18 lakh & consistent monthly rental income of ₹5.5 lakh was being received in cash. There were other miscellaneous cash receipts as well as withdrawals from the bank & the cashbook never reflected a negative cash balance & each deposit was fully supported by available cash on that date.
