Petrol Pump Operator’s Cash Deposits Fully Explained in Books: ITAT Deletes ₹14.10 Lakh Unexplained Income Addition [Read Order]
ITAT deleted the Rs. 14.10 lakh unexplained cash deposit addition after observing that the petrol pump operator had fully recorded the cash in his audited books.
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) decided the appeal concerning the addition of Rs. 14.10 lakh as unexplained cash deposits under Section 69A of the Income TaxAct, 1961 as the deposits were already recorded in his audited books ofaccounts.
The assessee, Srinivasappa, a petrol pump operator, had declared an income of Rs. 32,76,230 on a turnover of more than Rs. 37 crore for the Assessment Year 2017-18. They maintained audited financial statements, a cash book and day-wise cash balances.
The assessee received an income tax notice on alleged unexplained deposits of Rs. 7,40,000 in SBI and Rs. 6,70,000 in HDFC Bank. The assessee argued that these deposits were already entered in the books and that the Assessing Officer did not mention any specific bank account number while making the addition.
The Commissioner of Income Tax (Appeals) observed that the assessee did not explain the source of the deposits and confirmed the addition, even though the assessee had filed a 163-page paper book containing detailed financial records.
Before the tribunal, the assessee’s counsel argued that all relevant evidence, including audited accounts, the cash book and reconciliation statements, had already been placed before the authorities. They explained that cash deposits in his bank accounts ran into crores because of the nature of the petrol pump business.
The counsel pointed out that the figures relied upon by the Assessing Officer were inconsistent and that the officer mentioned only the bank names and not the specific account numbers.
The two-member bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) then began its examination of the matter. The tribunal observed that the assessee had already submitted complete records and that the authorities had not examined the material properly.
The tribunal observed that the addition was made on cash that was already recorded in the books. The tribunal explained that Section 69A applies only when money is not found in the books, which was not the case here.
The tribunal pointed out that all evidence needed to decide the issue was already available on record, and it found no reason to remand the matter. It set aside the findings of the Assessing Officer and the Commissioner of Income Tax (Appeals), as the addition of ₹14.10 lakh had no merit when the deposits were fully recorded in the audited books.
The tribunal deleted the addition and allowed the appeal.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
