In a recent ruling, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ), directed the Assessing Officer ( AO ) to reassess cash deposits of almost Rs 1 crore.
In this case, the appellant had filed Income Tax Returns ( ITR ) for the Assessment Year ( AY ) 2016-17 on 12/10/2016, declaring ‘Nil’ income. It was noted by the AO that during the assessment proceedings the appellant had admitted in her statement recorded under Section 131 of the Income Tax Act, 1961 that she has deposited cash of Rs. 96,00,000 in the joint account held by her with her husband, but it was not corroborated by documentary evidence.
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Thus, the AO was of the opinion that the income had escaped assessment and thus initiated reassessment proceedings under Section 147 of the Income Tax Statute.
The assessee approached the Commissioner of Tax Appeals [ CIT(A) ] for relief, but it did not yield favourable results.
It was submitted by the assessee that the ITR filed for the immediately preceding AY 2015-16 has been accepted and the availability of cash-in-hand as on the last date of the relevant previous year 2014-15 was not in dispute.
The ITAT bench observed that the details of cash deposits and withdrawals for the relevant previous year 2015-16 have been reproduced by the CIT(A) in the impugned order according to which cash-in-hand of Rs. 52,47,711 was available with the appellant as of 01-04-2015.
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The ITAT bench, comprising Prashant Maharishi ( Accountant Member ) and Rahul Chaudhary ( Judicial Member), remanded the issue relating to the addition of Rs. 96,00,000 under Section 68 of the Income Tax Act back to the AO with the directions to adjudicate the same afresh after granting the appellant a reasonable opportunity of being heard.
The bench also directed the appellant to file all necessary documents explaining the source of cash deposits of Rs. 96,00,000 , including relevant financial statements, bank statements, ledger accounts, and ITR to substantiate the availability of cash in hand amounting to Rs. 52,47,711 as of 01-04-2015.
The assessee was represented by Shri Rajeev Waglay and the department by Shri Ajay Singh.
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