Likha Saaya Vs ITO (ITAT Gauhati)
ITAT Guwahati Deletes ₹1.75 Cr Cash Deposit Addition & Quashes 263 Revision – Redeposit of Own Withdrawals Accepted, Revision During Pending Appeal Held Invalid
Assessee, a Scheduled Tribe member of Arunachal Pradesh, was engaged in transport contracts with the State Government & claimed exemption u/s 10(26). For AY 2010–11, he reported gross receipts of ₹13.44 crore & offered 10% as income, which was accepted as exempt. However, AO noticed cash deposits of ₹1.75 crore in Vijaya Bank & ₹18 lakh in Axis Bank, treating them as unexplained money u/s 69A on the ground that Assessee failed to explain their source. The assessment was completed ex parte u/s 144. Before CIT(A), Assessee explained that the deposits were redeposits of earlier withdrawals from his own bank accounts, which were initially withdrawn for a proposed property purchase that did not materialize. He filed bank statements & cash-flow summaries to establish correlation between withdrawals & redeposits. CIT(A), however, sustained the additions relying on probability & without specific reasoning.
A.Y. 2010–11
Tribunal held that the cash deposits were duly explained as redeposits from earlier withdrawals. AO failed to bring any evidence that such withdrawn cash was used elsewhere. CIT(A)’s reliance on mere presumption lacked factual basis. Referring to certain decisions, it reiterated that redeposit of withdrawn cash cannot be treated as unexplained in absence of contrary evidence. Hence, the addition of ₹1.75 crore was deleted.
