The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the case to the Commissioner of Income Tax (Appeals) [CIT(A)] for reconsideration of the ₹13.35 lakh unexplained cash deposit addition due to non-consideration of key evidence, including proof of his fish trading business and related payments.
Kamalbhai Babulal Kahar,appellant-assessee,appealed against the addition of ₹13,35,342 made by the Assessing Officer ( AO ) on account of unexplained cash deposits in his bank account for the Assessment Year (AY) 2014-15. The assessee argued that he had provided complete evidence to explain the source of the deposits, which was related to his fish trading business. He further pointed out that in the previous year, a similar addition had been deleted based on the same business activities.
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The AO had noticed large cash deposits of ₹62,32,200 in the appellant’s bank account and asked for an explanation. The assessee explained that the deposits came from cash sales in his fish trading business and cash withdrawals from his bank account. However, the AO rejected the explanation, claiming there was no evidence of the fish trading business and added ₹13,35,342 as unexplained cash under section 69A of the Act.
The matter was appealed to the CIT(A), who upheld the AO’s decision. The CIT(A) concluded that the assessee failed to provide sufficient evidence to substantiate his claim, and therefore confirmed the addition. The assessee argued that the CIT(A) had ignored critical submissions and evidence, including proof of the fish trading business and the payment for fish seeds by cheque.
The two member bench comprising T.R.Senthil Kumar ( Judicial Member ) and Annapurna Gupta ( Accountant Member ) upon reviewing both sides, agreed with the Counsel for the assessee that the CIT(A) upheld the addition of Rs. 13,35,342/- for unexplained cash deposits without fully considering the relevant submissions and evidence.
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It was observed that the CIT(A) relied only on part of the information provided by the assessee, overlooking key details such as the previous year’s accepted business income, payments made by cheque for fish-seeds, and the existence of a valid business license. Since the CIT(A) failed to account for these facts, the tribunal decided to remand the case for reconsideration, allowing the assessee an opportunity to present their case.
In short,the appeal filed by the assessee was allowed for statistical purposes.
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