Pradeep Patni Vs ITO (ITAT Indore)
ITAT Indore held that addition under section 69A of the Income Tax Act towards unexplained deposit is unsustainable in law since the nature and source of the deposit is sufficiently explained. Accordingly, the appeal is allowed and addition u/s. 69A is deleted.
Facts- The assessee-individual filed his return of income of AY 2016-17 declaring a total income of Rs. 6,50,600/- from business of fabrication work; income from partnership firm “M/s Hindustan Sales Industrial Corporation”; capital gain and other sources. The case of assessee was selected under scrutiny and the AO issued statutory notices u/s 143(2)/142(1) which were complied by assessee. Finally, the AO passed assessment-order u/s 143(3) after making an addition of Rs. 1,03,00,000/- on account of unexplained deposits in bank u/s 69A and thereby assessing total income at Rs. 1,09,50,600/-.
CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- Held that CIT(A) is not justified in just relying upon provisions of section 69A and certain decisions without making a judicious adjudication of the claim of assessee. The deeming provision of section 69A applies only when the “money” is found with the assessee and the “nature and source” is not explained. In present case, the assessee has sufficiently explained the nature (cash re-deposit) and source (previous withdrawals from own bank a/c) by documentary evidence. Hence, deeming fiction cannot be applied. We therefore do not find any justification in lower authorities’ action of treating the impugned bank deposits as unexplained u/s 69A. Accordingly, the addition of Rs. 1,03,00,000/- made by AO and upheld by CIT(A) is not sustainable; the same is deleted and the grounds raised by the assessee are allowed. The assessee succeeds in this appeal.
