The Income Tax Appellate Tribunal (ITAT ) Ahmedabad bench deleted the addition made towards the cash deposit in the bank account of assessee without considering the source of the cash from PG Income.
Assessee, Maltiben Gurudutt Yadav earns income from running PG accommodation and it was noted that she had deposited cash of Rs.3,89,500/- in her bank account with Kalupur Commercial Bank during the impugned year.
The Assessing Officer noted that the assessee had returned PG income of Rs.2,88,500/-. He further noted that to the extent of Rs.1,69,000/- the PG income had been received by way of cheque.
Therefore, out of the total PG income returned by the assessee of Rs.2,88,500/-, he reduced the amount received by way of cheque amounting to Rs.1,69,000/- and the balance he accepted the assessee to have received in cash which amounted to Rs.1,19,500/-.Out of total cash deposited of Rs.3,89,500/-,
Then accepted the source of the same out of PG income to the tune of Rs.1,19,500/- and the balance amount of Rs.2,70,000/- was added to her income as unexplained cash deposited in the bank.
Aggrieved by order, the assessee filed an appeal before Commissioner of Income-tax (Appeals) who dismissed the appeal. Therefore the assessee filed appeal before the tribunal.
During the proceedings the tribunal observed that the assessee is a lady. Her major source of income is PG income. Assessee had returned as her income from business of Rs.2,54,951/- as a net profit from the business. The Assessing Officer has taken a figure of Rs.2,88,500/- as a gross receipt from the PG business, which records do not reveal from where he has taken.
Further, the entire source of cash deposited in her bank account stands completely explained as coming from PG income only. The authorities below have totally misguided themselves by treating this amount as total gross receipts from PG income.
After considering the facts and circumstances, the single member bench of Annapurna Gupta (Accountant Member) deleted the addition made towards the cash deposit in the account of assessee when it was clearly substantiated the cash source was from the PG income.
S.N. Divatia appeared for the assessee and Satish Solanki, appeared for revenue
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