ITAT Directs Deletion of ₹70L Unexplained Cash Deposit on Education Society after finding Records in Audited Books [Read Order]

The Income Tax Appellate Tribunal, Ahmedabad Bench, directed the Assessing Officer (AO) to delete the addition made towards unexplained cash deposits amounting to ₹70,69,780 made on an Education Society after noting that the Society had submitted the list of students, along with cash books and bank statements regarding the deposits.

The appellant, The Falahe Darain Education Society, is a trust formed for educational and charitable purposes registered under section 12AA and 80G ofthe Income Tax Act, 1961.

The Assessing Officer (AO), during the assessment proceedings noted that appellant has deposited cash of ₹70,69,780 in two bank accounts with Bank of India and State Bank of India. The AO treated the deposits of cash in two bank accounts as income from unexplained sources and made an addition of ₹70 lakh to the income of the appellant.

The appellant filed an appeal before the Commissioner of Income Tax (Appeals) ( CIT(A) ) and submitted all documentary evidence to prove the genuineness of the claim. CIT(A) directed the AO to submit the remand report. The AO submitted the remand report justifying the addition made.

The CIT(A) confirmed the addition made by the AO, finding merit in the remand report submitted by the AO justifying the addition made during assessment proceedings.

The counsel for the Appellant, Sunil Talati, pointed out that the appellant had submitted the entire list of students from whom the fees were received, which is also supported by the entries in cash books and bank statements.

The appellant counsel contended that the appellant had duly explained the cash deposits as pertaining to Fee receipts form the educational institution run by the appellant.

The respondent counsel, Anaya Kulshresth, submitted that appellant had failed to discharge the burden of proving the source and genuineness of the cash deposits.

Senthil Kumar, Judicial member and Annapurna Gupta, Accountant Member, observed that the appellant is an educational institute and the appellant has submitted a list of students from whom the fees were received along with a copy of cash book and bank statement.

The tribunal also noted that the appellant had submitted its audited statement without any adverse comments made by the auditor. In the light of facts and circumstances, the tribunal directed the AO to delete the addition of ₹70,69,780 made on account of unexplained cash deposits.

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