Anil Manilal Patel Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that applying Standard Operating Procedure [SOP] of CBDT, a cash deposit of 2,50,000/- by an individual without business income should be treated as prima facie explained. Hence, addition u/s. 69 to that extent is not justifiable.
Facts- The assessee is an individual. Department identified that there was substantial cash deposits during the demonetization period and found that the assessee have deposited cash aggregating to Rs.10,00,000/- in two accounts during the period from 09.11.2016 to 30.12.2016. Upon further inquiry u/s. 133(6) of the Act from the concerned bank branch, AO observed that in addition to the aforementioned cash deposits, there were various credit entries aggregating to Rs.57,87,154/- in the assessee’s bank accounts during the financial year 2016–17, the source of which also remained unexplained. In the absence of any response or explanation from the assessee, AO proceeded to frame a best judgment assessment u/s. 144 of the Act, determining the total income at Rs.67,87,154/-, and initiated penalty proceedings u/s. 271AAC(1) in respect of both additions.
CIT(A) partly allowed the appeal. Being aggrieved, the present appeal is filed by the assessee.
Conclusion- Held applying the CBDT’s SOP, a cash deposit of 2,50,000/- by an individual without business income should be treated as prima facie explained, and does not warrant further verification, unless there are exceptional facts indicating concealment, which are absent in the present case. We find support in this regard from the decision of the Surat Bench of the Tribunal in Dhirajlal Bhagwanbhai Talaviya v. ITO (ITA No. 726/SRT/2023). Respectfully following the above principle and in view of the CBDT’s guidance, we are of the opinion that relief to the extent of Rs.2,50,000/-ought to be granted to the assessee. However, in the absence of any documentary evidence to substantiate the source of balance Rs.2,50,000/-, and given that the assessee has not maintained any personal cash book, household ledger, or other records to demonstrate accumulated cash on hand or past withdrawals, we see no infirmity in the action of the CIT(A) in treating the remaining Rs.2,50,000/- as unexplained under section 69 of the Act.
