Vicky Sherwani Vs ITO (ITAT Raipur)
Cash Deposits Remain Unexplained – IDS Declaration & Past Withdrawals Not Accepted: ITAT Raipur Upholds Addition u/s 68 in Case of Money Lender
Raipur ITAT dismissed Assessee’s appeal challenging an addition of ₹20,81,900/- made under section 68 read with section 115BBE.
AO noticed large cash deposits in Assessee’s Allahabad Bank account & sought an explanation. The assessee, stated to be a money lender, claimed that the deposits were sourced from:
1. IDS Declaration of ₹10 lakh,
2. Cash income of ₹8.66 lakh for FY 2015-16,
3. Cash income of ₹5.70 lakh for FY 2014-15, &
4. Surplus withdrawals of ₹5.79 lakh from earlier years.
However, both the AO & CIT(A)/NFAC rejected these explanations. Tribunal held that:
- IDS declaration pertained to AY 2015-16, not to the relevant AY 2016-17, & thus could not explain cash deposits for the impugned year.
- Alleged cash income for FYs 2014-15 & 2015-16 was unsupported by any documentary evidence, making the explanation an afterthought.
- The claimed surplus withdrawal was never substantiated before Department or Tribunal with any credible proof, such as bank confirmations or receipts.
- Opening cash balance of ₹26,04,762/- was introduced for the first time during assessment proceedings without supporting books or prior cash flow statements.
Tribunal also observed that no valid reason was provided as to why funds withdrawn in FY 2014-15 were redeposited only in FY 2015-16, nor why a moneylender would hold such idle cash for a long period. Further, Assessee’s IDS disclosures for earlier years indicated a pattern of non-disclosure & concealment.
