Abhishek Shukla Vs ACIT (ITAT Raipur)
No Guesswork in Tax: When Bank Confirms Loan & Agri Income, Section 68 Addition Can’t Survive: ITAT Raipur
Background
- Assessee, salaried employee, also engaged in agriculture.
- AO’s finding: During demonetisation, assessee deposited ₹26,97,000 in cash in HDFC & Dena Bank.
- AO alleged unexplained cash deposits & made addition u/s 68 of ₹23,82,220.
- Assessee’s explanation: Cash was from withdrawal of ₹24.40 lakh from KCC loan (April 2016), not utilized, hence redeposited during demonetisation, along with agricultural income.
- Dena Bank’s reply to AO confirmed assessee’s agricultural income (~₹18 lakh p.a.) & KCC loan sanction of ₹24 lakh.
CIT(A)’s Order
- NFAC dismissed assessee’s appeal
- Held no proper documentary evidence furnished to show that deposits were out of unutilised KCC loan meant for agricultural development.
- Ignored assessee’s submissions, bank statement, & bank’s confirmation.
ITAT Findings
- AO himself had issued notices u/s 133(6); bank confirmed loan sanction & agricultural income.
- Assessee furnished ITRs, Form 16, Form 26AS, bank statements, & reply from bank.
- CIT(A) failed to exercise powers u/s 250(4) & (6) to conduct enquiry if not satisfied.
- Dismissing appeal without verifying or disproving bank’s reply & assessee’s evidence was unjustified.
- Deposits were explained-redeposit of unutilised KCC loan.
- Sustaining addition amounted to guesswork & surmises.
Decision
- ITAT set aside CIT(A)’s order.
- Directed AO to delete addition of ₹23,82,220 u/s 68.
- Appeal allowed in favour of assessee.
- Addition deleted.
Where assessee establishes cash deposits during demonetisation as redeposit of earlier KCC loan withdrawal (supported by bank confirmation & agricultural income), addition u/s 68 cannot be sustained. Failure of CIT(A) to verify or disprove evidence amounts to violation of statutory duty.
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