While hearing the case of Dy.C.I.T vs. Shri Sudhir Shankar Halwasiya, Lucknow bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition for cash deposits in Bank considering the fact that the assessee had sufficient cash in hand and also held that in such a situation the assessee is not supposed to tally notes withdrawn and deposited.
The assessee in the instant case is an individual filed his return of income for the assessment year. During the course of assessment proceedings, the Assessing Officer (AO) has noticed that assessee had deposited huge cash in his bank account and accordingly he made the addition of the said amount to the total income of the assessee.
On appeal, CIT (A) granted relief to the assessee by deleting the addition made by the AO by verifying the additional documents submitted by the assessee before the authority.
Aggrieved by the order of the department revenue has approached the tribunal on appeal.
After considering the rival submissions and findings, the tribunal bench comprising of Judicial Member Partha Sarathi Chaudhury and Accountant Member T.S.Kapoor also upheld the order passed by the CIT (A) by holding the fact that the assessee had sufficient fund in his hand for made a huge deposit in the bank and he has also submitted all solid evidence to prove the source of the aforesaid fund. In such circumstances, it is not possible to make any addition on account of the huge cash deposit.
The division bench further observed that the assessee needs not to supposed to keep track of the number of respective notes which were received by him when the cash was withdrawn by him and get it tallied with the cash deposit which he is making in the same bank account whether there was sufficient cash available with the assessee and the source of said cash availability which stands duly explained by the assessee himself.
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