Case Law Details
ITO Vs Rajiv Travels (ITAT Bangalore)
It is normal presumption that, if the deposits have been made from the cash balance available in the books of accounts, then the sources of the cash would stand explained and hence, there is no necessity to treat it as unexplained deposits warranting addition.
Facts-
The assessee is a transport contractor. The AO noticed that the assessee has deposited Rs.2,32,00,000/- in its bank account. Assessee explained that the deposits have been made out of collections made on running of buses and also out of cash withdrawn from the bank. The AO noticed that the aggregate amount of collections made by the assessee from April, 2013 to November, 2013 was 191.95 lakhs. The opening balance as on the beginning of the year stood only at Rs.1.69 lakhs. Hence both these amounts are lesser than the number of deposits, referred above. AO further noticed that the assessee was carrying huge cash balance at the end of each of the month. The AO also noticed that the assessee has withdrawn cash to the extent of Rs.8.93 Crores from the bank during the year under consideration, while the total amount of collections was Rs.4.88 Crores only. Hence the AO took the view that the assessee has withdrawn excess amount for using it for non-business purposes. Further, the assessee has also incurred expenses to the tune of Rs.4.66 Crores. The AO also noticed that the withdrawals have made from the bank by the person named Mr. Imran Basha and the assessee has not explained its business connection with the above said person.
Hence, the AO took the view that the explanations given by the assessee are contradictory. Accordingly, he took the view that the deposits of Rs.2.32 Crores stand unexplained. Accordingly, he assessed the same as income of the assessee.
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