Ram Mohan Rapala Warangal Vs ITO (ITAT Hyderabad)
ITAT Hyderabad held that entire cash deposits added towards unexplained money unjustified since benefit of telescoping of withdrawals against the subsequent deposits should be given. Accordingly, matter remanded back.
Facts- The assessee is an individual and engaged in the business of trading in stationery items and general stores under the name and style of “Vasundhara Books Stationery & General Stores” and has not filed return of income for the A.Y 2011-12. AO, on receipt of information that the appellant had made huge cash deposits in the bank account and formed an opinion that, income had escaped assessment on tax. Accordingly, notices u/s 148 was issued and served upon the assessee. AO made the entire addition of cash deposits in the savings bank account of Rs.44,84,000/- treating it as unexplained money, by holding that the appellant had failed to discharge the onus of proving the source of cash deposits.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- From the perusal of the said statement, it would reveal that there was cash deposits followed by withdrawals as well. Without entering into any controversy, whether the appellant had really carried on the business or not, it would be suffice to hold that the amount withdrawn from the Bank account by cash, should be treated as available for the subsequent deposits in the bank account, in the absence of any evidence on record to show the utilization of the withdrawn amount. Thus, the lower authorities, i.e. the Assessing Officer as well as the CIT (A) should have given the benefit of telescoping of withdrawals against the subsequent deposits. Therefore, the approach adopted by the Assessing Officer as well as the learned CIT (A) is totally unjustified and unreasonable. In order to meet the ends of justice, I deem it proper to remand the matter back to the file of the Assessing Officer with a direction that the amount withdrawn from the Bank Account by way of cash should be treated as available against the subsequent deposits and the balance, if any, can be brought to tax and the balance amount, if any, as reduced by the amount of returned income may be brought to tax.
