Kamlesh Kantilal Bhandari Vs ITO (ITAT Pune)
In the case Kamlesh Kantilal Bhandari vs ITO, ITAT Pune considered an appeal challenging the confirmation of an addition of ₹24.25 lakh as unexplained cash deposits made to the assessee’s bank account. The assessee, engaged in retail business and earning income from partnerships, was assessed under Section 144 due to non-compliance during assessment proceedings. The Assessing Officer (AO) noted cash deposits on multiple dates in the Ahmednagar Merchants Co-operative Bank account and, in the absence of explanations or documentation such as cash flow statements, treated the total deposits as unexplained income.
During the appellate proceedings, the assessee explained that the deposits were made from earlier cash withdrawals totaling ₹33.70 lakh from the same bank account. He claimed the funds were initially withdrawn for purchasing agricultural land, but the transaction didn’t go through, prompting redeposit of the cash. The Tribunal found merit in this explanation, noting that there was no evidence presented by the Revenue to show the funds were diverted to any other investment or expenditure. Since the deposited amount was less than the cash withdrawn earlier and no alternative use of funds was identified by the tax authorities, the Tribunal concluded that the addition lacked sufficient justification. The order of the CIT(A) was set aside, and the addition was directed to be deleted. The appeal was allowed on July 29, 2016.
