ITO Vs Kshetra Bhimashankar Gramin Bigar Sheti Sahakari Patsanstha Maryadit (ITAT Pune)
Cash Deposits Representing Members’ Daily Savings – ITAT Pune Upholds Deletion of Addition u/s 69A
Assessee, a cooperative credit society, had not filed return for AY 2018-19. AO, based on Insight portal info, noticed cash deposits of ₹1,00,43,800/- & withdrawals of ₹6,05,000/-. Since there was no compliance, AO framed ex parte assessment u/s 144 & assessed income at ₹1,06,48,800/- by treating deposits & withdrawals as unexplained money u/s 69A.
Before CIT(A), Assessee explained that deposits were daily collections from members which were then deposited in society’s account. Books, cash book, ledger, bank statements & audit report under Maharashtra Co-op Societies Act were filed. CIT(A) admitted additional evidence u/r 46A, repeatedly sought AO’s remand report, but AO failed to respond despite several opportunities. Hence, CIT(A) decided on basis of evidence & deleted addition.
On Revenue’s appeal, Tribunal observed that (i) deposits were duly recorded in audited books, (ii) withdrawals cannot constitute income, & (iii) Revenue failed to rebut Assessee’s evidence. Since AO himself neglected to examine additional evidence despite reminders, CIT(A)’s order could not be faulted. Accordingly, ITAT dismissed Revenue’s appeal & upheld deletion of ₹1.06 crore addition.
Cash deposits from members duly recorded in audited books – addition u/s 69A unjustified. Revenue’s appeal dismissed
