Srinivasappa Vs ACIT (ITAT Bangalore)
The appeal concerns the addition of ₹14,10,000 as unexplained cash deposits under section 69A of the Income-tax Act, 1961, made by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2017-18. The AO identified cash deposits of ₹7,40,000 in an SBI account and ₹6,70,000 in an HDFC account, treating them as unexplained money. The CIT(A) held that the assessee failed to explain the source of these deposits and therefore sustained the addition.
Before the Tribunal, the assessee submitted a detailed paper book consisting of 163 pages, which had also been placed before the CIT(A). These records included date-wise cash balance summaries and the cash book, showing that all the deposits were recorded in the regular books of account. The assessee operated a petrol pump business with a turnover exceeding ₹37 crore and maintained audited books. The deposits in question were reflected in the financial records and in the return of income filed, which declared an income of ₹32,76,230.
The assessee argued that the AO had not specified the exact bank account numbers where the alleged unexplained deposits were made. The assessee maintained multiple bank accounts, including an SBI overdraft account with deposits running into several crores, and two other SBI accounts with only minor deposits during the year. Given the scale of operations and substantial bank transactions, the assessee contended that the figures noted by the AO were vague, inconsistent, and lacked proper verification. The allegation of ₹7,40,000 deposited in an unspecified SBI account was said to have no factual basis. Similarly, the HDFC bank account contained cash deposits significantly higher than the figure cited by the AO, reinforcing the argument that the AO had not properly examined the records.
