Bhupendra Meena Vs ITO (ITAT Jaipur)
Cash Does Not Become Unexplained Merely Because It Returns in Smaller Bundles—Earlier Withdrawals & Available Cash Balance Explain Re-deposits
The Jaipur Bench of the ITAT has held that cash deposits cannot be treated as unexplained income merely because the corresponding earlier withdrawals were in round figures while the subsequent deposits were made in different denominations. Where the availability of withdrawn cash was undisputed, there was no evidence that it had been spent or invested elsewhere, and the assessee offered a plausible explanation for rotating the funds through his bank account, the addition of ₹40.99 lakh was unsustainable.
The assessee, Bhupendra Meena, was a small civil contractor. He had declared his business income under the presumptive taxation scheme contained in s.44AD and was not maintaining regular books of account. During the relevant year, total cash deposits of ₹56.99 lakh were noticed in his bank account.
This was the second round of proceedings before the ITAT. In the first round, the matter had been restored to the AO to consider the assessee’s explanation afresh. During the set-aside proceedings, the assessee did not respond to certain notices, and the AO proceeded on the basis of the material already available on record.
