The Ahmadabad bench of the Income Tax Appellate Tribunal (ITAT), while allowing the appeal filed by the assesee, recently held that all cash deposits in the savings account could not be considered as income of assessee.
Asseseee Maniben Amrut Lal Patel had entered into a monetary transaction that cash deposited in the savings bank account and no return of income was filed by the assessee.which was found On the basis of the Annual Information Return (AIR). Thereafter, the assesee’s case was reopened.
After issuing notice to assesee the Assessing Officer made an addition of Rs. 12,31,600/- after giving benefit of cash withdrawals made and from the account and re-deposited in the account to the extent of peak amount and treated the same as unexplained income of the assessee.
Aggrieved by the order, assessee filed the present appeal before CIT(A) and the CIT(A) partly allowed the appeal of the assesee.
Jaymin Shah, counsel for the assesee submitted that assessee and her son are joint owner of saving bank account with Kotak Mahindra Bank Ltd.
The assessee is residing in a very small village where no private banks are available also no core banking is available during the year under consideration. Therefore, the assessee and their family members used to deposit their cash in this account and apply for initial public issue
Therefore, cash was argued to be deposited on various occasions belonging to various persons of assessee’s family on whose behalf the assessee may share application money.
Thus, Cash deposit in a savings bank could not be a reason to believe that all the cash deposits are income of the assessee.
There was no enquiry as such made by the Assessing Officer while recording the reasons as well as while passing the assessment order. On the basis of information of AIR, assessing officer issued a notice.
R. R. Makwana, Counsel for the revenue submitted that the Assessing Officer had made verification and issued notices under Section 133(6) but none of the parties had confirmed the cash deposit.
The tribunal observed that the assessee was not required to file return of income was not taken into account and therefore, there was no application of mind while recording the reasons for reopening.
Therefore the member Suchitra Kamble, Judicial Member of the tribunal allowed the appeal filed by the assessee.
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