The Income Tax Appellate Tribunal (ITAT), Chennai sustained addition on cash deposits into bank account as there was no evidence of rental receipt from property.
During the financial year relevant to the assessment year 2011-12, a sum of Rs.12,73,500 was deposited in cash to savings bank account No.462013297 maintained with Indian Bank, Puducherry Branch. The assessee has not filed return of income for the AY 2011-12. Therefore, the assessment has been re-opened under section147 of the income tax Act, and notice under section 148 of the income tax Act, was issued.
The assessee, Kamala, neither responded nor filed any return in response to the notice under section148 of the income tax Act. The case was taken up for scrutiny and during the course of assessment proceedings, the AO called upon the assessee to produce necessary details in respect of cash deposits into bank account.
In response, the Counsel of the assessee, E. Rajan, appeared and filed copy of Income Tax Return -V, computation of income and one statement showing the rental income around Rs.40,000/- per month from the immovable property. The Counsel asked to furnish the details of rent received and from whom it was received along with details of property held by the assessee.
As no details furnished by the assessee regarding cash deposits and also regarding house property, a final proposal for completing assessment u/s.144 r.w.s.147 of the income tax Act, was issued intimating that in absence of reply and material evidence, the cash deposits amounting to Rs.12,73,500 will be treated as income of the assessee for the AY 2011-2012.
The AO has allowed the benefit of withdrawal from very same bank account on earlier occasion to the extent of Rs.6.5 lakhs and balance amount of Rs.6,23,500 has been treated as unexplained money under section 69A of the income tax Act. The assessee carried the matter in appeal before the First Appellate Authority, but could not succeeded. The Commissioner of Income Tax (A) sustained the additions made by the AO towards unexplained cash deposits into bank account.
A Single Bench consisting of G Manjunatha, Accountant Member observed that “In absence of details regarding rental receipt from property, the explanation of the assessee is that cash deposits into bank account is out of rental income, cannot be accepted. Therefore, we are of the considered view that there is no error in the reasons given by the CIT(A) to sustain the addition made towards cash deposits into bank account.”
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