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The Tribunal directed the CIT(A) to decide the appeal afresh on its merits, including a ₹75 lakh unexplained cash advance addition, after finding that the earlier dismissal was based purely on a procedural technicality. The ruling emphasizes that the CIT(A) must use their wide powers to adjudicate on merits and cannot reject an appeal at the threshold.
ITAT Hyderabad held that addition towards unexplained money under section 69A of the Income Tax Act is liable to be set aside and matter is remanded back to AO since additional evidences submitted by the assessee needs to be verified by lower authorities.
The issue was a ad-hoc addition on cash deposits sustained by the due to the absence of direct source-to-deposit correlation. The ITAT deleted the addition, holding that once the overall source (like agricultural or business income) is accepted on merits, does not require mathematical one-to-one matching.
The ITAT ruled that crore cash found in a locker during a search was not “unexplained money” because the assessee immediately explained the source as accumulated speculative business income and offered it to tax. The Tribunal held that a disclosed source, even if unrecorded, cannot be forcefully converted into unexplained income.
The Tribunal ruled that the crore addition, made solely because the assessee’s petrol pump was allegedly unauthorized to accept SBNs, was incorrect. Since the cash deposits were sourced from historical, recorded cash sales accepted by the AO, taxing the deposits again would constitute impermissible double taxation.
The ruling establishes that the AO cannot selectively accept total sales and profit figures while disbelieving a corresponding cash deposit from those sales without rejecting the books or providing concrete proof of bogus entries. Treating the recorded cash deposits as unexplained income is illegal double taxation.
he ITAT restricted a S.69A addition on ₹1 crore cash deposits, ruling that treating the entire gross receipt as unexplained income was unjustified for a commission agent. Considering the low-margin onion trading business and past assessments, the Tribunal estimated 4% of the deposits as the correct taxable commission income.
The ITAT deleted the addition, ruling the CIT(A)’s rejection of agricultural income based solely on bank deposits not tallying bill-to-bill was arbitrary and illogical. Once the genuine agricultural activity was accepted, timing differences or cash accumulation must be considered.
Since voluntarily filed returns could not be revised through additional evidence under Rule 29 of the ITAT Rules (Income Tax (Appellate Tribunal) Rules, 1963) and additional evidence was inadmissible and that the seized cash was rightly treated as unexplained income under Section 69A, taxable under Section 115BBE.
ITAT Jaipur held that addition under section 69A of the Income Tax Act towards unexplained money found during the course of search is liable to be deleted since assessee has discharged his onus to prove that the cash found is completely verifiable from the audited books of accounts.
