Case Law Details

Case Name : ITO Vs Rajeev Kumar Gupta (ITAT Agra)
Appeal Number : ITA No. 273/Agra/2013
Date of Judgement/Order : 14/02/2014
Related Assessment Year :

CA Prarthana Jalan

Hon’ble Bench Of Agra ITAT has in the case of ITO v/s Rajeev Kumar Gupta has held that entire amount of deposit in the bank account can not be treated as unexplained when there are withdrawals also. The facts of the case are as under:-

In the assessment order passed u/s.144 the income was at Rs.12,96,457/- as against the returned income of Rs.1,20,000/-. During the course of assessment proceeding, the AO found that there was a cash deposit of Rs.11,76,457/- in the bank account of the assessee maintained with ICICI Bank. The AO has mentioned in the assessment order that the assessee has shown a transportation code no.0712, but no income has been shown by him from running of trucks and any other vehicles in the return of income. In the assessment order, the AO had discussed that in the bank account of the assessee maintained with ICICI Bank, , he has deposited Rs.11,76,457/- in cash and there is a payment to ICICI Bank Ltd., HDFC, Mangalam, Citi Financial, Indiabull and Centurian etc. As per details discussed by the AO in the assessment order there are deposits as well as withdrawals in this bank account. However, in absence of any explanation filed by the assessee, he has considered the entire amount of deposit of Rs.11,76,457/- as unexplained cash deposit and made the addition for the entire amount of the cash deposits in the income of the assessee and thus, the total assessed income of the assessee has been determined at Rs.12,96,457/-.

The assessee challenged the addition before the ld. CIT(A) wherein the assessee explained that the details could not be filed of source of cash deposited in the bank account on account of shifting of the residence. The assessee is carrying on the business of transportation and filed return of income declaring income of Rs.1,20,000/- and the source of the cash deposited in the bank account was out of receipts from transportation business. The cash deposit in the bank account was out of realization of transportation charges duly recorded in the cash book. The assessee, therefore, explained the cash deposited in the bank account from transport business. It was also pleaded that the AO has not brought any evidence on record to show any other source of income other than running of trucks/vehicles. Therefore, the cash deposit in the bank account is out of transport business and according to section 44AE, no books of account is required to be maintained for such business. The ld. CIT(A) considering the explanation of the assessee and going through the entries in the bank account, accepted the contention of the assessee that bank deposits are from transportation business. Therefore, substantial addition was deleted. However, its gross receipts were estimated and by applying higher profit rate, part addition was maintained.

The Hon’ble Bench of ITAT confirmed the order of the ld. CIT(A) as on looking to the nature of entries of cash deposits and withdrawals found in the bank account of the assessee maintained with ICICI bank held that the entire amount of deposit made in the bank account cannot be said to be unexplained because after deposit of the cash amounts, there are withdrawals. Since the assessee is in the business of transportation, the explanation of the assessee could not be refused that such deposits have been made out of transport business income.

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