Addition cannot be Deleted merely for Mentioning Section 68 Instead of Section 69 of Income Tax Act when Cash Deposit of Rs. 49,000/- Found Each Time in Bank Account: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the addition could not be deleted merely for mentioning Section 68 instead of Section 69 of the Income Tax Act , 1961 when the cash deposit of Rs.49,000/-had been found each time in the bank account of assessee.

The solitary grievance of the assessee, Gloria Eugenia Rynjah Banerji, was that the Commissioner of Income Tax Appeals (CIT(A)) had erred in confirming the addition made by the AO under Section 68 of the Income Tax Act. This was not the first round of litigation as the issue was restored back to the files of the AO to decide the same in accordance with law. The assessee was asked to explain the delay in sending the money to Delhi and why there were deposits in amounts less than Rs. 50,000/-.

Some land was sold at Meghalaya in 1989 for a consideration of Rs.24.50 lacs. It was also not in dispute that the sale consideration was kept by the cousin brother of the assessee at Meghalaya. What was not understandable and was beyond the human probability that the brother of the assessee kept such a huge amount at Meghalaya from 1989 till 2006.

It was also not understandable nor had it been proved before any authority including us as to how such a huge amount travelled in cash from Meghalaya to Delhi. The logic behind deposit of cash of Rs. 49,000/- each time in the bank account was also not justified. To sum up, the factual matrix was not commensurate with human probability.

In respect of the second query, it was replied that the bank charges, handling charges of cash deposit exceeding Rs.50,000/-, therefore, to avoid bank charges cash was deposited in amounts less than Rs.50,000/-. The explanation of the assessee did not find any favour with the AO who completed the assessment by making the addition under Section 68 of the Income Tax Act.

K. Sampath, on behalf of the assessee for the assessee stated that the addition could not be made under Section 68 of the Income Tax Act in as much as assessee had not maintained any books of account and the cash was found to be deposited in the bank account, therefore, provisions of Section 68 of the IncomeTax Act would not apply.

He also submitted that the sources had been duly explained there was no reason for making the impugned addition. 

Vivek Kumar Upadhyay, on behalf of the revenue, strongly supported the findings of the AO and read the operative part of the assessment order.

The two-member Bench of N. K. Billaiya, (Accountant Member) and Yogesh Kumar Us, (Judicial Member) dismissed the appeal filed by the assessee holding that “The logic behind deposit of cash of Rs. 49,000/- each time in the bank account was also not justified. To sum up, the factual matrix is not commensurate with human probability. On such unbelievable facts the additions cannot be deleted merely on technical ground that the AO mentioned section 68 instead of section 69 of the Act.”

To Read the full text of the Order CLICK HERE

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