No Addition u/s 69 of Income Tax Act when Cash Deposit, genuinely made in Bank Account: ITAT [Read Order]

A Division Bench of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench held that no addition can be made under Section 69 of the Income Tax Act, 1961 when cash deposit, genuinely made in bank account.

The assessee, Dashrathbhai Shivabhai Chaudhary is engaged in farming and trading of milk and seeds. As per the information made available, the assessee made cash deposit of Rs. 21 lakhs with Saving Bank Account. Being agricultural and the agricultural income is exempt the assessee did not file any return of income under Section 139(1) of the Income Tax Act.

The Assessing Officer after recording reasons under Section 147 of the Income Tax Act and approval from the authority issue notice under Section 148 of the Income Tax Act which was served to the assessee. The assessee therein filed return of income declaring income of Rupees ninety one thousand and net agricultural income of Rupees sixty five thousand. The Assessing Officer made addition under Section 69 of the Income Tax Act related to cash deposited with Dena Bank Ltd.

The Counsel for the assessee submitted that the assessee has explained the detail related to 21 lakhs but the CIT(A) restricted the addition to Rs. 10 lakhs despite giving all the evidences in support of the same amount.

The Counsel further submitted that the amount of Rs. 10 lakhs was earned by the assessee from sell of milk and seeds wherein the purchase of the said items were established by the assessee to bill and invoices. In fact, the trading activity and gross receipt of the assessee was accepted by the CIT(A).

Suchitra Kamble, Judicial Member and Waseem Ahmed, Accountant Member observed that “The assessee has explained through evidences during the remand proceedings that the cash deposit was genuinely made in the bank account. The CIT(A) as well as the Assessing Officer was not right in making addition under Section 69 of the Income Tax Act.”

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