Shanmugam Ethiraj Vs ITO (ITAT Chennai)
The assessee, a director of M/s. S.V. Global Mills Ltd., filed his return of income for Assessment Year 2017-18 in response to a notice issued under Section 142(1). During scrutiny, the Assessing Officer noticed cash deposits of Rs.1,17,38,500 and cash withdrawals of Rs.2,19,59,800 from the assessee’s City Union Bank account.
The assessee explained that the cash deposits were sourced from interest income received from M/s. Srinidhi Finance Pvt. Ltd. and cash withdrawn earlier from the same bank account. The Assessing Officer accepted the explanation wherever deposits were made within two to five days of withdrawals but treated cash deposits of Rs.70,27,500 made after a longer interval as unexplained money under Section 69, holding that the withdrawn cash must have been spent elsewhere.
Procedural History
The Commissioner of Income Tax (Appeals) upheld both the jurisdiction of the Assessing Officer and the addition under Section 69.
The assessee appealed before the Income Tax Appellate Tribunal, Chennai.
Legal Issues
- Whether cash deposits could be treated as unexplained under Section 69 merely because there was a time gap between earlier cash withdrawals and subsequent redeposits.
- Whether the Assessing Officer had jurisdiction in view of CBDT Notification No. 6/2013 dated 28.01.2013.
Relevant Statutory Provisions
- Sections 69, 69A, 115BBE, 129, 139(1), 142(1), 143(2) and 234B of the Income-tax Act, 1961.
- CBDT Notification No. 6/2013 dated 28.01.2013.
Assessee’s Submissions
