CIT(A)'s Order Lacks Detailed Reasoning on Cash Book Discrepancies: ITAT Remands Matter to AO [Read Order]
ITAT remanded the case after finding that CIT(A) failed to properly examine and justify the deletion of Rs. 22.17 crore in unexplained cash deposits.
![CIT(A)s Order Lacks Detailed Reasoning on Cash Book Discrepancies: ITAT Remands Matter to AO [Read Order]](https://images.taxscan.in/h-upload/2025/06/16/2045319-citas-cash-book-itat-taxscan.webp "CIT(A)s Order Lacks Detailed Reasoning on Cash Book Discrepancies: ITAT Remands Matter to AO [Read Order]")
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning the addition of unexplained cash deposits under Section 68 of the Income Tax Act, 1961, observing that the Commissioner of Income Tax(Appeals) [CIT(A)] did not provide adequate reasoning or properly examine the discrepancies in the assessee’s cash book and bank accounts. Seema Bhuraram Chaudhary,...
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning the addition of unexplained cash deposits under Section 68 of the Income Tax Act, 1961, observing that the Commissioner of Income Tax(Appeals) [CIT(A)] did not provide adequate reasoning or properly examine the discrepancies in the assessee’s cash book and bank accounts.
Seema Bhuraram Chaudhary, the assessee, is an individual engaged in agency services under the name “Om Online Communications,” offering services like money transfers, utility payments, recharges, and ticket bookings through various partnerships. For the assessment year 2018-19, she declared an income of Rs. 14,48,200. The case was selected for limited scrutiny due to substantial cash deposits in her bank accounts.
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During the assessment, the Assessing Officer observed that the assessee held nine bank accounts, with total cash deposits of Rs. 112.06 crore as per bank records. The cash book submitted by the assessee showed deposits of only Rs. 89.89 crore. Unable to reconcile the difference of Rs. 22.17 crore, the Assessing Officer added it to her income as unexplained under Section 68 of the Income Tax Act.
Before the CIT(A), the assessee’s counsel argued that the discrepancy occurred because the cash book was prepared in a hurry due to COVID-related difficulties and filed additional evidence to support her case. The CIT(A) accepted the submissions and deleted the entire addition, stating that the deposits were immediately transferred to major organizations by retailers and hence were not unexplained.
On appeal before the ITAT, the revenue counsel argued that the CIT(A) did not give any justification for accepting the additional evidence, nor did he properly verify the source and nature of the cash deposits. The revenue further pointed out that the Assessing Officer was denied a fair opportunity to comment on the new documents.
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The two-member bench comprising R.K. Panda (Vice President) and Astha Chandra (Judicial Member) observed that the CIT(A)’s order was brief and did not address the central issue of the unexplained cash deposit properly. It also observed that there was no clarity on whether the rectified cash book was submitted or verified.
The tribunal explained the need for a detailed examination of facts and directed the Assessing Officer to reassess the matter after giving the assessee a fair opportunity to explain the discrepancy. The tribunal remanded the case for fresh adjudication and allowed the Revenue’s appeal for statistical purposes.
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