Ashok Wasan Vs ACIT (ITAT Delhi)
ITAT find that there has been only one cash deposit of Rs. 165,000/- on account of old currency notes (SBN) in saving banks account. The assessee is a practicing doctor, ENT specialist, deriving income from medical practice. The assessee has also deposited cash in his Saving Bank account (Non-SBN) which has been duly accepted by the AO during the same period. We find from the assessment order that there has been no abnormal cash deposit and the assessment order is based on estimation and strange logic and without any legal basis and hence, held to be legally invalid.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal has been filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre, (NFAC), Delhi dated 30.09.2021 for AY 2017-18.
2. The assessee has raised the following grounds of appeal:-
“1. That the Learned CIT (A) has erred in Law and on facts in upholding the action of the Ld. AO in making an addition of Rs. 5,61,825/- u/s 69A of the Income Tax Act, 1961 on account of unexplained cash deposits without considering the facts and circumstances of the transactions by simply rejecting the documents submitted and explanations by the assessee and ignoring that the evidences of the assessee are even capable of explaining the transactions.
2. The Ld. CIT(A) has erred in not admitting the evidences submitted by the assessee on the basis of surmises & conjecture without applying mind and ignoring the submissions and prayer of the assessee and just relying on baseless objection of the Ld. Assessing Officer.”
3. For the sake of brevity, the relevant portion of order of the Assessing Officer is reproduced as under:-
“During the course of assessment proceedings, it has been observed that the assessee had deposited cash during the year under consideration, the reason for the selection of case through CASS. The assessee was asked vide notice dated 19.06.2019 to explain the cash deposits made and also to submit the details of the bank accounts maintained by assessee and the statements thereof. However, no details regarding the cash deposit and bank accounts was submitted by assessee in response to the said notice dated 19.06.2019 issued u/s 142(1) of IT Act. Considering the nan-submission of required details from the end of assessee, last opportunity vide notice dated 10.10.2019 was given to assessee to submit the required details by 14.10.2019. However, no submission was made by assessee in response to final opportunity given.
5. Considering the aforesaid facts of the case, penalty notice dated 15.10.2019 under section 272A(1)(d) of the Income Tax Act, 1961 for non-compliance of notices issued under section 142(1)/143(2) was issued to assessee.
6. Further, records in the form of Income Tax Return, 26AS as retrieved from system and bank statements given by assessee on 20.11.2019 have been perused. On further examination of the facts, a sharp increase in sales/receipts on account of professional services is noted in this case for the year under consideration. The increase in cash receipts in lieu of professional services for the current assessment year i.e. 2017-18 stands approximately to 26.96% as compared to increase of 15.67 percentage points during the preceding previous year Le. A.Y. 2016-17. On further perusal of data for A.Y. 2018-19, the increase in sales is around 17.24% in comparison to A.Y. 2017-18. This clearly establishes the regular trend of increase in sales in the range of 15-17 percentage points in various years except A.Y. 2017-18.
Brief analysis of the professional receipts over the various years is as under:-
