Tekchand Punjabi Vs ITO (ITAT Raipur)
AO noticed cash deposits of ₹1,15,000 on 22.06.2015 & ₹4,00,000 on 25.06.2015 in Assessee’s SBI account. Assessee explained that ₹5,00,000 was withdrawn on 12.06.2015 via bearer cheque issued to employee Shri Prem Shankar Mishra, which was later re-deposited as not required. AO rejected the explanation, stating that such bearer cheque transaction had never been done earlier & termed it a colourable device, making addition of ₹4,00,000 u/s 69A.
Regarding ₹1,15,000 deposit, AO allowed opening cash of ₹93,126 & added the balance ₹21,874 as unexplained. Thus, total addition ₹4,21,874 u/s 69A.
Before CIT(A), Assessee filed an affidavit of employee confirming withdrawal & redeposit. However, CIT(A)/NFAC rejected the affidavit, stating an employee will “obey the master”, & also held that since such affidavit was not filed before AO, it cannot be accepted now. CIT(A) upheld the additions.
Before ITAT, Assessee argued that:
- Withdrawal of ₹5,00,000 is undisputed & reflected in bank account.
- Revenue failed to prove any alternate unexplained source.
- Affidavit of employee supports the explanation.
- Both AO & CIT(A) decided merely on suspicion, not on evidence.
- CIT(A) violated Section 250(4) & 250(6) by not conducting enquiry or giving reasons.
ITAT observed:
- Revenue acknowledges withdrawal of ₹5,00,000 from disclosed bank account.
- No evidence brought by AO to prove deposits were from undisclosed sources.
- Revenue cannot reject transaction simply because it never happened earlier.
- Affidavit cannot be dismissed merely because it is from employee—must be examined on merits.
- CIT(A) failed to exercise powers u/s 250 to verify or make further enquiry.
ITAT held that addition u/s 69A was made on mere suspicion, without disproving Assessee’s explanation. Since the source (withdrawal) is accepted & Revenue failed to prove otherwise, addition is unjustified.
