Case Law Details
Kaliannan Ganesan Vs ITO (ITAT Chennai)
It transpired that the assessee made cash deposits of Rs.13.30 Lacs post demonetization as tabulated assessment order. Accordingly, the assessee was directed to substantiate the source of the same. The assessee is stated to be engaged in poultry farm business and trading of eggs.
AO held that there was significant increase in the monthly cash balance as on 01.11.2016 as compared to the earlier month during this year. The increase in such cash balance was claimed to be mainly from cash sales / recovery from debtors. Finally, partly accepting the claim, the amount of Rs.3.15 Lacs as deposited by the assessee on 14.11.2016 & 16.11.2016 was added u/s. 69A r.w.s. 115BBE of the Act and the assessment was framed.
CIT(A) held that mere production of cash book would not mean that the source has been explained. The onus lies on the assessee to prove the source and since he failed to prove the same, the additions were justified.
ITAT find that the assessee’s financial statements have duly been audited u/s 44AB. The assessee has reflected turnover of Rs.431.11 Lacs. In the year-end Balance Sheet, the assessee has reflected cash balance of Rs.11.07 Lacs. The bank accounts have duly been disclosed in the Balance Sheet. The assessee produced cash book for this year wherein the cash balance as on 08.11.2016 was shown to be Rs.14.56 Lacs which was sufficient enough to cover the deposit Rs.13.30 Lacs. No defects have been pointed out in the books of accounts. Therefore, the additions are based merely on presumptions and therefore, not sustainable in law.
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