Suthakar Selvaraj Vs ITO (ITAT Bangalore)
No Addition Can Be Made on Mere Presumption About Withdrawal Habits- ITAT Bangalore Deletes Addition on Cash Deposits – Withdrawals from Same Bank Account Accepted- Salaried Employee’s Bank Withdrawals Accepted as Source of Deposits– Assessee’s Cash Flow Statement Accepted
Assessee, an employee of BEML Ltd, filed return declaring income of ₹5,78,420. AO noted mismatch between salary TDS & return income, & also found cash deposits of ₹10,70,600 in Canara Bank. Assessee explained that ₹5 lakhs came from property sale & the balance from earlier withdrawals. AO accepted ₹5 lakhs but treated ₹8,50,000 as unexplained. Later in rectification u/s 154, addition was reduced to ₹5,70,600.
CIT(A) partly allowed appeal, giving credit only for ₹1,17,000 deposited during demonetisation as out of past withdrawals, but confirmed balance addition of ₹4,53,600. He rejected assessee’s explanation that withdrawals were re-deposited, stating that no salaried person would habitually withdraw & re-deposit cash.
Before ITAT, assessee produced cash flow & bank statements showing withdrawals of ₹11,08,500 on 117 occasions, matching the deposits. Tribunal held that AO/CIT(A) erred in relying on mere assumptions about withdrawal habits without contrary evidence. Since withdrawals exceeded deposits & were duly evidenced, the addition of ₹4,53,600 was unsustainable.
