PramodarayNaranaprasad Pathak Vs ITO (ITAT Ahmedabad)
Ahmedabad ITAT Deletes Section 69A Addition on Cash Deposits; Accepts Cash Savings and Bank Withdrawals as Explained Source
The Ahmedabad ITAT allowed the assessee’s appeal and deleted the addition of ₹5,00,100 made under section 69A, holding that the cash deposited in the post office account stood satisfactorily explained through cash savings from earlier years and withdrawals from bank accounts.
The assessee, who earned his livelihood through priesthood and catering, had not filed a return of income for AY 2020-21 as his total income of ₹2.27 lakh was below the basic exemption limit. Reassessment proceedings were initiated based on information that cash deposits of ₹46 lakh had been made in his account. During assessment, it was established that the figure had been erroneously inflated by ₹41 lakh due to a clerical mistake by the Post Office, and the Assessing Officer restricted the addition to ₹5,00,100.
Before the Tribunal, the assessee explained that the deposit of ₹5 lakh, made in April 2019 in a newly opened post office account, represented cash income accumulated over preceding years together with withdrawals from bank accounts. The assessee also produced the relevant bank statements and profit and loss statements for FYs 2018-19 and 2019-20 to substantiate the source of funds.
The Tribunal observed that the cash deposit had been made almost two years after demonetisation, lending support to the assessee’s explanation. Accepting the documentary evidence and the explanation regarding the source of the cash, it held that the deposit could not be treated as unexplained money under section 69A. Accordingly, the Tribunal deleted the entire addition of ₹5,00,100 and allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
