ITAT Restores Cash Deposit Addition to AO for Fresh Examination after Assessee clarifies Bank Account Ownership [Read Order]
The bench noted that the bank account where the cash was deposited belongs not to the assessee firm, but to a retired partner who continued the business.
![ITAT Restores Cash Deposit Addition to AO for Fresh Examination after Assessee clarifies Bank Account Ownership [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/cash-deposit-itat-taxscan.jpg "ITAT Restores Cash Deposit Addition to AO for Fresh Examination after Assessee clarifies Bank Account Ownership [Read Order]")
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) restores the cash deposit addition to the assessing officer (AO) for fresh examination after the assessee clarifies bank account ownership. In this case, the assessee has appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for the Assessment Year (AY) 2017-18 in sustaining the addition of Rs....
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) restores the cash deposit addition to the assessing officer (AO) for fresh examination after the assessee clarifies bank account ownership.
In this case, the assessee has appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for the Assessment Year (AY) 2017-18 in sustaining the addition of Rs. 43,55,357 under Section 68 of the Income Tax Act,1961. Â
In this case, the assessee, AGM Brothers, is a partnership firm that engaged in wholesale and retail trading with Anupam Gupta and Mukesh Kumar as partners.
The assessee’s counsel submitted before the ITAT that when one of the partners of the firm, Mahesh Kumar, exited the firm, the firm was dissolved effectively from 01.04.2016, and the other partner, Anupam Gupta, took over the assets, liabilities and business of the partnership firm and continued the business as a proprietorship business.
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The counsel vehemently argued before the bench that since the deposits in the bank account belonged to Anupam Gupta, who had also filed a return declaring these bank accounts, the addition made by the AO was to be deleted.
The counsel further submitted that the CIT(A) dismissed the appeal without a personal hearing while ignoring the relevance of the provided documents. It was also submitted that all transactions carried out in the impugned bank account, including the cash deposit during the demonetisation period, pertain to Anupam Gupta personally, who had acquired the entire business, including the bank account, and used the same for carrying on the business in the capacity of a proprietor.
The departmental representative showed no objection in restoring the matter to the AO for verification.
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The bench noted that the bank account where the cash was deposited belongs not to the assessee firm but to a retired partner who continued the business. Accordingly, the matter is remanded to the AO for fresh examination.
The Delhi ITAT, comprising C.N. Prasad (Judicial Member), allowed the assessee’s appeal for statistical purposes.
To Read the full text of the Order CLICK HERE
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