Sukhwinder Singh Vs ITO (ITAT Amritsar)
Summary: The Income Tax Appellate Tribunal, Amritsar Bench partly allowed the assessee’s appeal for AY 2017-18 and restricted the addition relating to unexplained cash deposits to ₹13.10 lakh. The assessment had been completed ex parte under section 144 of the Income Tax Act, 1961 on 29.12.2019 after notices under section 142(1) were allegedly not complied with. The Assessing Officer found cash deposits of ₹25.71 lakh in the assessee’s HDFC Bank account during 17.05.2016 to 06.08.2016 unexplained. The assessee also had cash deposits during the pre-demonetisation period from 11 November 2016 to 1 December 2016, which were explained from receipts on sale of agricultural crops supported by documentary evidence including “J” Form. The CIT(A) dismissed the appeal, observing that the document claimed as a cash flow statement was a ledger account and that several transactions described by the assessee as cash withdrawals were actually cheque payments to other persons. Consequently, those amounts could not be regarded as cash available with the assessee for subsequent redeposit.
Before the Tribunal, the assessee filed a 218-page paper book, though without the certificate prescribed under the ITAT Rules. It contained a cash flow statement detailing withdrawals and deposits in the HDFC Bank account. The Tribunal noted that the statement commenced with an opening cash balance of ₹3 lakh as on 01.04.2016, but evidence establishing the closing cash balance as on 31.03.2016 had not been filed and the matter was not discussed in the assessment order. It agreed that withdrawals reflected for the period 13.04.2016 to 17.05.2016 were not cash withdrawals by the assessee and therefore their benefit could not be allowed. However, the Tribunal found that deposits of ₹9 lakh each on 01.07.2016, aggregating to ₹18 lakh, were explained by equivalent withdrawals made on 29.06.2016 and 30.06.2016. On the other hand, interim bank deposits of ₹8.10 lakh together with agricultural expenditure of ₹5 lakh disclosed in the statement, aggregating to ₹13.10 lakh, were not satisfactorily explained. After considering the rival contentions, bank statement, computation of income and other material, the Tribunal therefore restricted the addition to ₹13.10 lakh instead of ₹21.71 lakh and granted consequential relief. The appeal was accordingly partly allowed.
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