Unexplained cash deposits have been a focal point of scrutiny in the Indian income tax framework. Section 69A of the Income Tax Act, 1961, is a crucial provision empowering tax authorities to tax unaccounted assets, including cash deposits in the event the taxpayer fails to provide a satisfactory explanation regarding the nature and source of such unaccounted assets. This section acts as a deterrent against tax evasion by ensuring all forms of income, regardless of their origin, are brought under the tax net.
Under Section 69A, if cash or other valuable articles are found in possession of a taxpayer and are not reflected in their financial records, the burden to substantiate the source of such assets are shifted on to the taxpayer.
If the taxpayer is unable to satisfactorily explain the source of such asset, the same may be added to the income of the taxpayer for the concerned assessment year and subjected to tax.
The provisions under Section 69A gained particular prominence during the demonetization period, when the tax authorities were alerted due to a wave of sudden spikes in cash deposits, creating suspicion.
However, the practical application of Section 69A has been rather convoluted. Courts have repeatedly emphasized the need for tax authorities to rely on concrete evidence rather than arbitrary assumptions, in order to ensure that legitimate transactions are not unduly penalized.
This case digest compiles key judgments and practical insights on the interpretation of Section 69A, focusing on unexplained cash deposits. It covers numerous stories reported at Taxscan.in which delves extensively into evidentiary standards, procedural aspects, and the approach adopted by the courts while addressing disputes. By examining legislative intent and landmark rulings, the digest serves as a practical resource for tax professionals and stakeholders, offering guidance on the equitable enforcement of Section 69A while safeguarding taxpayer rights.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT)has held that addition to a cash deposit is not allowable when additional evidence explaining the source is submitted by the assessee.
A Coram of Shri Saktijit Dey, Judicial Member viewed that the Commissioner (Appeals) refused to accept the additional evidence on the ground that the assessee failed to explain, why the evidence could not be furnished before the Assessing Officer. Sh. Om Parkash, counsel for the respondent relied on the addition made by AO. It was observed that when the assessee remained unrepresented in the assessment proceeding and the assessment order was passed ex-parte, the assessee could not have produced the evidence before the Assessing Officer. The Tribunal directed the Commissioner (Appeals) to accept the evidence and examined them on its own merits before deciding the issue, as the evidence furnished by the assessee can have a crucial bearing on disputed addition.
Bangalore bench of Income Tax Appellate Tribunal ( ITAT ) partially upholds the addition in the absence of statement of affairs for justifying the closing cash balance.
The Accountant Member Shri Laxmi Prasad Sahu Observed that the AO has made the addition under Section 69 of the Act of Rs.12,75,802/- for want of proper explanation of cash deposited during demonetisation period. During the course of assessment proceedings as well as during the first appellate proceedings the assessee did not file any cash flow statement or any statement of affairs for justifying the cash lying with him in the past years. Though he was not required to maintain books of accounts as per section 44AA(2) but can prepare a statement of affairs for justifying his closing cash balance at the end of year. the appeal filed by the assessee is partly allowed.
The Income Tax Appellate Tribunal (ITAT), Chennai sustained addition on cash deposits into bank account as there was no evidence of rental receipt from property.
A Single Bench consisting of G Manjunatha, Accountant Member observed that “In absence of details regarding rental receipt from property, the explanation of the assessee is that cash deposits into bank account is out of rental income, cannot be accepted. Therefore, we are of the considered view that there is no error in the reasons given by the CIT(A) to sustain the addition made towards cash deposits into bank account.”
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that addition under Section 69 of the Income Tax Act 1961 is not sustainable on mere delay in deposit during demonetisation period.
A Single Bench of Chandra Mohan Garg, (Judicial Member) allowed the appeal filed by the assessee holding that the assessee is a farmer earning exempt agricultural income and small interest income and has no other means of income. Also, in the absence of evidences to destroy the factual submissions of assessee and also as assessee was allowed to deposit amount up to 31st December 2016, a delay in deposit could not be a valid basis for raising any doubt against the assessee.
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs.53.23 Lakhs on cash deposits during the demonetization period and directed the Assessing Officer ( AO ) to re-compute the income of the assessee.
The two member bench comprising Manu Kumar Giri ( Judicial Member ) and Manoj Kumar Aggarwal ( Accountant Member ) upon review, observed that the assessee’s cash balance of Rs.133.73 lakhs as of November 8, 2016, was well-supported by the cash book and that the books were audited with no defects. It noted that the AO had arbitrarily accepted part of the deposits and rejected the rest, even though all deposits had the same source.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has upheld the upheld income addition on failure to explain the source of cash deposit in bank account.
The two-member Bench of Manjunatha G, (Accountant Member) and Manmohan Das, (Judicial Member) observed that the assessee failed to furnish any agreement to purchase of land so as to prove that cash was withdrawn from bank account for purchasing of land. Why the land could not be purchased was also not explained. Further, the cash book of the assessee told a different fact. The assessee’s cash book was either ‘very less cash balance’ or ‘negative cash balance’ during the relevant period. The Bench dismissed the appeal filed by the assessee holding that assessee did not furnish any reason why land could not be purchased. Even there was no agreement to purchase land and the cash book showed a negative cash balance.
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) checked cash deposits made during the demonetisation period, ultimately deleting an addition of ₹18.25 lakh imposed by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961.
The Income Tax Appellate Tribunal Bench of Judicial Member T.R. Senthil Kumar and Accountant Member Annapurna Gupta, carefully examined the case. The Tribunal found that the AO’s decision was based on assumptions rather than concrete evidence and that the assessee had sufficiently demonstrated that the cash deposits were part of regular business operations. The Tribunal ruled in favour of the assessee, noting that the addition was not sustainable in law and deleted the ₹18.25 lakh addition.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad deleted addition of Six Lakhs as there was satisfactory evidence as to source of cash deposit.
A Bench consisting of Annapurna Gupta, Accountant Member and Suchitra Kamble, Judicial Member observed that “The entire evidences, as noted above by us reasonably and satisfactorily demonstrating the flow of money to the assessee in cash from the proceeds received of land sold, we see no reason to disbelieve the assesses explanation of the source of cash deposit in bank of Rs. 6lacs being attributable to his share in land sold by family received in cash from his brother. Addition of Rs.6,00,000/- on account of unexplained cash deposits is accordingly directed to be deleted.”
The Income Tax Appellate Tribunal (ITAT), Chennai bench has deleted an addition under section 68 of the Income Tax Act, 1961 against a Proprietor towards cash deposit during demonetization period by considering the fact that the same was kept as cash in hand in his business capacity.
The Tribunal noted that the addition made by AO as well as CIT(A) that the closing cash as on 31.03.2006 is ‘nil’ as per ITR, the counsel explained that in ITR the assessee is declaring business cash in hand and not the cash in hand kept in individual capacity and earned out of rental income. “He explained that the assessee is maintaining personal accounts in his individual capacity and business account in his proprietorship capacity for business purposes in which, the cash in hand is ‘nil’. When these facts were confronted to ld. Senior DR, she could not reply anything about the cash balance available in the cash book and the rental income earned by the assessee month-wise and tenant-wise and rent earned in cash. The complete paper-book was confronted to ld. Senior DR but she could not controvert the above fact situation,” the Tribunal said.
The Rajasthan High Court has upheld a penalty imposed under Section 271(1)(c) of the Income Tax Act, confirming that the unexplained cash deposits were correctly added by the income tax department after considering the withdrawal benefits granted.
The bench observed that the appellant did not file income tax returns for years preceding AY 2010-2011 and had deposited Rs.12,75,000 in cash into the bank account between June 11, 2009, and June 19, 2009, without withdrawals during that period. It further noted that the appellant had not declared these deposits in the Standard Chartered Bank or the interest earned, and the addition made was based on the available material and after considering the appellant’s explanations.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) observed that addition under Section 68 of the Income Tax Act, 1961, cannot be made without examining source of cash deposit
The single member bench of the tribunal comprising George George K (Vice President) observed that an addition under section 68 of the Income Tax Act, 1961, cannot be made without scrutinizing the source of the cash deposit. Consequently, for the limited purpose of scrutinizing the cash deposit’s source, the matter was referred back to the Assessing Officer. The assesse was instructed to provide evidence of the identity/source of the cash deposit and must satisfy the AO regarding the conditions stipulated under Section 68 of the Income Tax Act, 1961. In the result, an appeal filed by the assessee was allowed for statistical purposes.
While deleting an addition under section 69A of the Income Tax Act, 1961, the Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the re-deposit of cash after the declaration of the demonetization for the purpose of the renovation of house and marriage of son is normal conduct of a man ordinary prudent which cannot be doubted unless revenue authorities bring on record positive or adverse material to establish that the amount withdrawn by the assessee from his bank account was utilized or deposited somewhere else.
Shri Chandra Mohan Garg (Judicial Member) found that when the purpose of renovation of house and marriage of son is deferred and the assessee was having cash amount withdrawn from his bank then after declaration of demonetization he had no option but to re-deposit the same to his bank account.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition under Section 68 of the Income Tax Act 1961 as the amount from bank account for property was deposited but redeposited in the same bank as purchase deal could not be fructified.
The two-member Bench of Vikas Awasthy,(Judicial Member) and Amarjit Singh, (Accountant Member) observed that the source of the amount to the bank account of the grandfather of the assessee Pritam Singh was also very much clear and unambiguous. The Bench allowed the appeal filed by the assessee and deleted the addition referring to the decision of Delhi High Court in Jaya Agarwal which held that where the assessee withdrew an amount from bank account for purchase of a property but re-deposited a part of said sum in same bank account as purchase deal could not be fructified, additions under Section 68 of the Income Tax Act of amount re-deposited was unjustified.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that the assessee has successfully demonstrated source of cash deposit of Rs. 2,40,00,000 to its bank account during demonetization period thus upheld the order of Commissioner of Income Tax (Appeals) [CIT(A)], in deleting the addition made by Assessing Officer (AO) on account of unexplained cash deposits under Section 68 of the Income Tax Act,1961.
The ITAT Bench observed that the appellant has duly given the site cash books as well as main cash book showing cash balance of Rs. 2,45,41,259 and the cash deposited to its bank account was created due to huge opening cash balance of Rs. 1,70,45,310 as on 01.04.2016, as per audited books and return of income filed by the assessee before demonetization declaration, and amount of cash withdrawals till demonetization period amounting to Rs. 5,20,46,260 which was higher during immediately preceding FY 2015-16 amounting to Rs. 5,84,79,000 . The Two member Bench comprising of Chandra Mohan Garg, Judicial Member and Dr. B.R.R. Kumar, Accountant Member held that the assessee has successfully demonstrated source of cash deposit of Rs. 2,40,00,000/- to its bank account during demonetization period and hence no addition can be made.
The Jodhpur Bench of Income Tax Appellate Tribunal (ITAT) while deleting the addition ruled that mere time gap between Withdrawals and Deposits cannot be a sole basis for suspecting genuineness of Cash-in-hand.
The coram of Judicial Member Sandeep Gosain and Accountant Member Vikram Singh Yadav held that mere absence of supporting documentation cannot be a reason enough to allege any malafide in the explanation so submitted especially where the assessee has explained and duly disclosed the source of deposits in the bank account out of which the withdrawals have been made and has thus established the necessary linkage and availability of cash in hand.
The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Mumbai while deleting the addition made by the assessing officer the bench held that the source of cash deposit made in corporation bank is out of advance money received from the sale of property.
It is observed by the tribunal that the assessee had an opening cash balance of Rs. 5,08,370.34 as per the financial for the year ended 31.03.2005. further noticed that the credits in the Corporation Bank up to 05.07.2005 ( before assessee leaving India ) total to Rs. 4,02,250/-. Therefore, there is merit in the contention that he assesses that the source for the amount deposited until the date of his leaving India is from the cash in hand which is declared in the return of income for the previous AY.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition for cash deposit on account past savings and agricultural operations.
The Bench observed that CIT(A) had not considered the affidavit filed by the assessee with regard to the registered sale deed of an amount which needed to be allowed owing to the sufficiency of the evidence. With regard to the remaining it was submitted that it is out of the past savings and agricultural income. The two-member Bench of B. R. R. Kumar, (Accountant Member) Yogesh Kumar US, Judicial Member held that a certain amount of past savings could not be discounted. An amount of Rs.27,61,000/- was explained as out of past savings, withdrawals and agricultural activities. Out of this an amount of Rs.2,00,000/- was held to be the past savings and from the agricultural operations of the assessee.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has quashed the addition made against a practicing doctor for cash deposit during the demonetisation period.
The two-member Bench of Saktijit Dey, (Judicial Member) B. R. R. Kumar, (Accountant Member) held the impugned order as invalid and allowed the appeal filed by the assessee holding that no abnormal cash deposit was found and the assessment order was based on estimation and strange logic. “There has been only one cash deposit of Rs. 165,000/- on account of old currency notes (SBN) in a savings bank account. The assessee is a practicing doctor, ENT specialist, deriving income from medical practice. The assessee has also deposited cash in his Saving Bank account (non-SBN) which has been duly accepted by the AO during the same period,” the Bench further observed.
The Income Tax Appellate Tribunal (ITAT), New Delhi Bench deleted addition as cash deposited during demonetization period does not exceed threshold limit.
A Division Bench consisting of G S Pannu, President and Saktijit Dey, Judicial Member observed that “In the facts of the present appeal, undisputedly, assessee is a salaried person having no business income. Further, the cash deposited during the demonetization period, does not exceed the threshold limit of Rs.2.50 lacs in terms with the CBDT Instruction noted above. The CBDT instruction being beneficial to assessee, has to be applied. In view of the aforesaid, we delete the addition of Rs.2,23,000 made under Section 69A of the Act.”
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled in favor of the taxpayer, overturning the addition made under section 69A of Income Tax Act, 1961. The tribunal found that the cash deposit, received as a gift from the taxpayer’s mother during the demonetization period, was adequately accounted for.
A single-member bench of Chandra Poojari (Accountant member), concluded that the addition made by the assessing officer could not be upheld as the assessee clearly provided the explanation of the cash deposit. The ITAT determined that the Rs. 25,00,000/- deposit into the taxpayer’s bank account had been properly explained, leading to the deletion of the contested addition. As a result, the taxpayer’s appeal was allowed.
The two member bench of the Income Tax Appellate Tribunal ( ITAT ) in Delhi has directed the Assessing Officer to remove the addition, as the lower authorities failed to counter the assessee’s explanation regarding the maturity and redemption of term deposits. The bank statements showed sufficient cash withdrawals to account for the deposits.
The bench, comprising Kul Bharat (Judicial Member), reviewed the material and orders of the lower authorities. It was noted that the lower authorities had not rebutted the assessee’s explanation regarding the term deposit maturity and its subsequent redemption. The bank statements showed sufficient cash withdrawals to account for the deposits. The ITAT found that the authorities had not provided evidence suggesting the withdrawn cash was used for other purposes. As a result, the ITAT directed the AO to delete the impugned addition. The grounds raised by the assessee were thus allowed.
The Income Tax Appellate Tribunal (ITAT), Mumbai bench, has deleted an addition under section 69A of the Income Tax Act, 1961 in respect of cash deposit during demonetization period holding that the deposit was made out of tuition fee received from the students.
While deleting the addition, Shri Amarjit Singh, Accountant Member held that “the CIT(A) ought to have consider the material on record for adjudicating the issue contested in the appeal on merit. Section 250(6) contemplates that the first appellate authority would determine point in dispute and therefore, record reason on such point in support of his conclusion. Therefore, I restore this case to the file of the ld. CIT(A) for adjudicating on merit after affording opportunityto the assesse. The assesse is also directed to make due compliance before the ld. CIT(A) without any failure. Therefore, the appeal of the assessee is allowed for statistical purposes.”
While considering a writ petition the Delhi High Court observed that reopening assessment for cash deposits is valid if failed to substantiate with evidence and allows the petitioner to submit details of unexplained cash deposits before the appellate authority.
The Court observed that the contention of the petitioner that the details of the cash deposits had been disclosed by him in the income tax returns was not correct, as the assessee has only mentioned detail of cash deposited in the Corporation Bank account and has not mentioned cash deposits in any other bank accounts. The bench consists of Mr Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the contentions and submissions advanced by the petitioner must be raised before the Appellate Authority.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench cancelled the confirmation of additional amount without verifying the repayment and submission of the assessee in case of Cash deposit. Assessee Rajeshkumar Baldevbhai Patel is engaged in agricultural activities and had not filed the Returns of Income. The Assessing Officer (AO) found that assessee has made cash deposits of Forty Lakh Fifty Thousand and Five Hundred Rupees in his savings bank account with Bank of India. After that AO issued a letter to assessee for verifying the transaction of the assessee’s savings account. But the assessee did not respond to that letter.
The Division Bench of Annapurna Gupta, Accountant Member and T.R. Senthil Kumar, Judicial Member allowed the appeal filed by the assessee, held that addition made by the Assessing Officer not correct and deleted the addition confirmed by the CIT (A).
In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ), Chennai bench has deleted the addition on the basis of production of proof for cash deposit in the bank account during demonetization period.
G. Manjunatha (accountant member) set aside the impugned order and directed to delete the addition observing that there was no prohibition for dealing with Specified Bank Notes during those period during demonetization and assessee had already filed necessary evidences to prove the availability of source for cash deposits and the tribunal also held that the observation of assessing officer regarding addition was invalid.
The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case for reassessment regarding Rs. 9.74 lakh in unexplained cash deposits made during the demonetization period,allowing the assessee to submit supporting evidence for the deposits.
The two member bench comprising Pradip Kumar Choubey ( Judicial Member ) and Rakesh Mishra ( Accountant Member ) found that the CIT(A) had dismissed the assessee’s claim and upheld the AO’s addition of Rs. 9,74,157/- due to lack of documentary evidence for the cash deposits and low profit. The assessee’s counsel argued that the notices from the AO were not received, preventing the submission of documents. Based on the facts and documents presented, the tribunal decided that the assessee should be allowed to submit the required documents to the AO, set aside the AO’s order, restored the case for a fresh hearing, and directed the AO to review the documents and issue a new order.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] directing a fair hearing in the matter concerning an addition of Rs.49.5 lakh under Section 69A of Income Tax Act,1961, due to the denial of natural justice.
A single member bench comprising Dr. BRR Kumar(Vice President) upon review, found merit in the assessee’s contention, particularly regarding the denial of an adjournment and the opportunity to submit additional evidence. It directed the CIT(A) to reassess the matter after granting the assessee a fair hearing. The tribunal highlighted that all submissions and evidence provided by the assessee should be considered during the reassessment. Ultimately,the appeal filed by the assessee was allowed for statistical purposes.
The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) granted partial relief on a cash deposit of Rs.35.13 lakh while remanding the vehicle sale claim to the Assessing Officer ( AO ) for further verification due to incomplete documentation.
A single member bench comprising George George K(Vice President) observed that Rs.19,25,000 of the deposits was claimed as proceeds from vehicle sales, supported by delivery notes. However, the CIT(A) rejected this claim due to incomplete details in the notes. The assessee clarified that brokers, not ultimate buyers, signed the delivery notes. The Tribunal found that the issue of Rs.19,25,000 required further examination and restored it to the AO for reconsideration.
The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to the assessee, by condoning a six-year delay in filing an appeal and remanding the case to the Commissioner of Income Tax (Appeals) [CIT(A)] for adjudication on unresolved tax additions including discrepancies in income and Form 26AS.
The two member bench comprising George George K (Vice President) and Padmavathy S (Accountant Member) considered the legal principles for condoning the 6-year delay in filing the appeal, following the Supreme Court’s guidelines in Mst. Katiji and the Madras High Court’s ruling in K.S.P. Shanmugavel. It found that the delay was not deliberate and was due to the assessee’s bonafide belief that full relief had been granted by the CIT(A). Thus, the delay was condoned. The tribunal remitted the case back to the CIT(A) to address the unresolved issues, specifically the incorrect returned income and the Form 26AS discrepancy, and directed the CIT(A) to decide these issues in accordance with the law, ensuring the assessee had a fair hearing. Ultimately, the appeal was allowed for statistical purposes.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) upheld the addition of unexplained income under Section 69A of the Income Tax Act, 1961, due to the assessee’s continuous non-compliance.
The tribunal noted that the assessee failed to appear or represent the case, despite being given multiple opportunities. Citing judicial precedents, such as Adim Jati Seva Sahkari Samiti Maryadit v. ITO (159 taxmann.com 8),the ITAT highlighted that an assessee cannot raise a new case before the Tribunal if they had been evasive or non-compliant during earlier assessment and appellate proceedings. It pointed out that such an appeal, based on the assessee’s prior non-participation, was not valid and dismissed it, upholding the lower authorities’ decision. The two member bench comprising Siddhartha Nautiyal(Judicial Member) and Annapurna Gupta(Accountant Member) reviewed these precedents and the assessee’s continuous non-compliance. It concurred with the CIT(A) in affirming the AO’s decision.
The Visakhapatnam bench of the Income Tax Appellate Tribunal ( ITAT ) deleted an incorrect addition made by the assessing officer who mistakenly added declared turnover as unexplained income. The tribunal also lowered the income estimation rate at 4%.
A single bench led by K. Narasimha Chary (Judicial Member) observed that the cash deposits were already accounted for within the turnover and only Rs. 4,80,703 should remain considered as unexplained deposits. The tribunal deleted the incorrect addition. Coming to the estimation, the tribunal noted that there was a lack of material evidence to justify an 8% income estimation rate in the assessee’s business and ruled that 4% would be more fair. So, the assessee’s appeal was partly allowed.
The Hyderabad Bench of the Income Tax Appellate Tribunal ( ITAT ) was recently faced with a matter wherein an Assessee’s Cash Deposits in their Savings Bank Account were treated as ‘Unexplained Money’. The ITAT proceeded to remit the matter back to the Assessing Officer ( AO ) for fresh assessment.
The Hyderabad Bench of the Income Tax Appellate Tribunal presided over by Inturi Rama Rao, Accountant Member after examining the bank records affirmed that the Appellant had in fact conducted withdrawals, thus opening the avenue for subsequent deposit of the withdrawn amounts. Furthermore, the ITAT held that the CIT(A) failed to adduce any evidence on record to show the Appellant’s utilization of the withdrawn amount, further widening the scope of the Assessee to re-deposit the same in the bank accounts.
The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) restored the case to the Assessing Officer ( AO ) for a fresh assessment, granting the assessee an opportunity to substantiate cash deposits of Rs. 12,03,000 that were added as unexplained income during the assessment under section 144 of the Income Tax Act, 1961 for the Assessment Year ( AY ) 2017-18.
A single member bench comprising Pawan Singh ( Judicial Member ) after considering the submissions, found that the assessee had not been granted adequate opportunities for presenting its case, especially given that the AO had completed the assessment under Section 144. The Tribunal emphasized the principles of natural justice and restored the matter to the file of the AO for a fresh decision. It directed the AO to grant the assessee an opportunity for hearing before passing any order and advised the appellant to be more vigilant in future proceedings.
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication due to the denial of a personal hearing to the assessee,
The tribunal considered the submissions of both parties and examined the available records. The assessee had requested a video conference, which was arranged, and a personal hearing was subsequently scheduled. However, the assessee did not attend the hearing, resulting in the order being passed in his absence. The two member bench comprising Yogesh Kumar U.S ( Judicial Member ) and S.Rifaur Rahman ( Accountant Member ) decided to remand the case back to the CIT(A) for a fresh hearing, ensuring that the assessee is provided an opportunity to present his case.
Recently, the Income Tax Appellate Tribunal ( ITAT ) recently set aside an addition of Rs. 2.25 crore made by the Assessing Officer ( AO ) against one assessee/appellant, Tirupati Jewels, New Delhi, for unexplained cash deposits, noting that the addition was based on the AO’s mere suspicion.
Upon review, the ITAT bench of Mr Rifaur Rahman and Mr Sudhir Kumar observed that the AO had failed to reject the assessee-firm’s book of accounts and had not proven that the transactions were fictitious. The tribunal noted that the AO’s addition relied heavily on suspicion and surmise, without robust factual backing. Thus the ITAT ruled that the assessee had sufficiently explained the source of the cash deposits through sales documentation and festival-specific sales trends. Consequently, the tribunal deleted the Rs. 2.25 crore addition.
The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (Appeals)[CIT(A)]’s decision to delete additions made under Section 68 of the Income Tax Act,1961 for the Assessment Year (AY) 2017-18, citing sufficient cash balance and lack of evidence for accommodation entries.
Additionally, the appellate tribunal noted that the tax effect in the present case was below the threshold specified by the CBDT’s Circular, further supporting the conclusion that the case did not fall under any exceptional category. Consequently, it upheld the CIT(A)’s decision to delete the addition under Section 68, affirming that the deletion was well-founded based on the evidence provided. The two member bench comprising Sonjoy Sharma(Judicial Member) and Rakesh Mishra(Accountant Member)dismissed the Revenue’s appeal, affirming the CIT(A)’s order and confirming the deletion of the addition based on sufficient evidence provided by the assessee.
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.
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 Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) ruled that rejecting records solely due to handwritten form is unjust without considering the taxpayer’s explanation and business context.
The two-member bench comprising Suchitra Kamble (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) noted that the CIT(A) heavily relied on the AO’s order without an independent assessment of the evidence. The tribunal emphasized that the CIT(A) did not adequately consider the context of the assessee’s business, which traditionally operates in cash. The tribunal criticized the revenue for rejecting the evidence due to its handwritten form rather than the content and substance it provided.
In a recent decision, the Income Tax Appellate Tribunal ( ITAT ) in Bangalore provided relief to a Canara Bank employee and national hockey player, by setting aside income additions totaling Rs. 9.84 lakh.
After hearing both sides, the ITAT two member bench of Mr Laxmi Prasad Sahu and Mr Prakash Chand Yadav found the evidence satisfactory, noting that the assessee had no additional income sources and no indications of substantial investments. The Tribunal accepted that the deposits stemmed from previous cash withdrawals and thus ruled that the Rs. 9.84 lakh should not be counted as unexplained income, favoring the assessee.
In a recent ruling, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ), denied re-adjudication, stating that remanding decades-old assessment appeals to the Assessing Officer ( AO ) would be impractical due to the unavailability of documents and personal verifications.
After going through the facts of the case, the bench was of the opinion that since the appeals belong to very old assessment years, remanding them to the AO would be impractical, as many documents and personal verifications may no longer be available. The ITAT bench, comprising of Renu Jauhari ( Accountant Member ) and Beena Pillai ( Judicial Mmeber ) restricted the addition to 0.15% of the deposits made in the bank account of the assessee and thus partly allowed the appeal.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to the Assessing Officer (AO) for a fresh assessment of unexplained income, considering additional evidence submitted by the assessee.
The bench accepted the additional evidence submitted by the assessee, which required verification by the AO, including checks on land ownership, agricultural activities, bank statements, and the source of funds for a vehicle purchase. The two member bench comprising Suchitra Kamble (Judicial Member) and Makarand V Mahadeokar (Accountant Member) set aside the CIT(A)’s order and restored the matter to the AO for de novo consideration, directing the AO to admit the new evidence and provide the assessee with a fair opportunity to present his case.
The Income Tax Appellate Tribunal (ITAT) has ruled that extended working hours alone cannot be a valid basis for assuming additional income in the form of commissions where an addition made by the Assessing Officer (AO) on the grounds of alleged receipt of commissions by the assessee due to his involvement in transactions outside normal banking hours was challenged by the assessee.
The Income Tax Tribunal highlighted that the entire case against the assessee was built on assumptions and statements, without any corroborative evidence found during the search or seizure operation. The tribunal further cited the decision of the Delhi High Court in Pr. CIT vs. Pavitra Realcon Pvt. Ltd. to reinforce its point that “statements made during a search operation, without any corroborating evidence, cannot be the sole basis for making additions to income.”
The Jaipur Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the legitimacy of cash deposits made during the demonetization period and rejected their classification as unexplained under Section 68 of the Income Tax Act,1961.
The bench emphasized that the rejection was based on assumptions rather than evidence, citing the Rajasthan High Court’s ruling in CIT Vs. Pink City Developers regarding proper procedures. The Tribunal ruled that the revenue could not accept part of the sales as genuine while classifying the remainder as unexplained. The two member bench comprising Dr.S.Seethalakshmi ( Judicial Member ) and Rathod Kamlesh Jayantbhai ( Accountant Member ) held that cash deposits from recognized business income could not be classified under Sections 68 or 69A, allowing both grounds raised by the assessee and granting the appeal.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that once cash withdrawals were proven, the burden shifts to the Income Tax Department to Disprove these funds were not available for deposits.
The tribunal referenced the Gujarat High Court ruling in Shailesh Rasiklal Mehta (2009) case which held that once cash withdrawals are established, the burden shifts to the Department to prove that these funds were not available for deposits. However, the tribunal found that the claim of Rs. 3,70,000 from the conversion of USD could not be substantiated due to a lack of forex receipts and other documentary evidence. Therefore, the tribunal allowed Rs.8,30,000 as satisfactorily explained but upheld the addition of Rs. 3,70,000 under Section 69A of the Income Tax Act due to a lack of evidence on the USD conversion. The appeal of the assessee was partly allowed.
The Income Tax Appellate Tribunal ( ITAT ), Visakhapatnam recently reverted an Order passed by the Commissioner of Income Taxes (Appeal) – National Faceless Appeals Centre ( CIT(A)-NFAC ) citing the failure of Appellant to appear before the NFAC during proceedings despite multiple intimations.
The Income Tax Appellate Tribunal, Visakhapatnam presided over solely by Duvvuru RL Reddy, Judicial Member observed that the CIT(A)-NFAC had posted the Appellant’s case on several occasions but upon a complete lack of response from the Appellant, proceeded to confirm the additions made by the AO and dismissed the case ex-parte.
The Cuttack Bench of the Income Tax Appellate Tribunal ( ITAT ) found Rs. 3.4 crore addition related to a sale discrepancy excessive and remanded the case to the Principal Commissioner of Income Tax ( PCIT ) for re-examination.
The tribunal noted that the appellant had not provided sufficient documentary evidence to substantiate the claim regarding the sales discrepancy. The tribunal agreed that the assessment order was erroneous and prejudicial to the revenue because of the failure to resolve the Rs. 3.44 crore discrepancy. The tribunal also observed that the PCIT’s order which directed the addition of Rs.3.44 crores was too harsh since the appellant was not given sufficient opportunity to explain the difference with further documentary evidence.
The Cuttack Bench of Income Tax Appellate Tribunal(ITAT) deleted the addition of Rs. 16,80,000 made for cash deposits in Specified Bank Notes (SBN) from liquor sales, citing exceptional circumstances.
The tribunal reviewed the submissions and noted that the assessee deposited Rs. 26,46,000 in SBN during the demonetization period. The AO allowed Rs. 6,30,000 for average sales but deemed Rs. 16,80,000 as unexplained. However, the AO did not classify the SBN as unauthorized and accepted the reported sales. Due to customers opening liquor bottles, which could not be returned, the assessee had to accept SBN to avoid losses. The bench recognized the exceptional circumstances and determined that the addition of Rs. 16,80,000 made by the AO and upheld by the CIT(A) should be deleted. A single member bench of George Mathan(Judicial Member) allowed the appeal filed by the assessee.
Recently, the Income Tax Appellate Tribunal ( ITAT ) in Delhi dismissed the appeal filed by the assessee, Shivam Leasing Pvt. Ltd., upholding a substantial income tax addition of ₹1.05 crore for the assessment year 2008-09. The case involved the assessee-company’s alleged concealment of income and failure to maintain proper financial records.
Furthermore, the Tribunal observed that the CIT(A) had thoroughly examined the case, considering the comprehensive report from the Investigation Authorities, which highlighted the assessee-company’s modus operandi in concealing income and the deliberate failure to maintain proper financial records. The Tribunal affirmed the addition of ₹1,05,31,500, agreeing with the CIT(A)’s assessment that the company’s inability to substantiate its cash deposits warranted such a significant tax addition.
The Chandigarh bench of the Income Tax Appellate Tribunal ( ITAT ) sets aside the ex-parte order due to the assessee’s illness and husband’s demise and grants a final hearing regarding the addition of Rs. 29.5 lakh as undisclosed income.
The ITAT bench, while going through the facts of the present case, observed that the assessee was unwell and her husband was no more. Due to this, she was unable to pursue any proceedings before lower authorities diligently. The ITAT bench set aside the impugned order. The Bench remanded the case back to CIT()A) and directed the CIT(A) to give the assessee a final opportunity to present her case.
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