Snack Vendor’s Cash Deposits verified via Books and Sale Records: ITAT Deletes Addition, Orders Re-computation [Read Order]
The Tribunal noted that the assessee had successfully discharged the onus of establishing the sources of the cash deposits. Accordingly, the impugned order was set aside and the Assessing Officer was directed to accept the computation of income after carrying out due verification.
cash - deposit - Taxscan
cash - deposit - Taxscan
The Income Tax Appellate Tribunal (ITAT), Chandigarh “B” Bench has deleted an addition relating to unexplained cash deposits made by a snack vendor, holding that the deposits were duly supported by books of account and property sale records, and directed the Assessing Officer (AO) to re-compute the income after verification.
The appellant, Ms. Reena of Patiala, challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)], relating to Assessment Year 2017-18. The AO had framed the assessment under Section 144 of the Income Tax Act, 1961, on the ground that cash deposits of Rs. 21.09 lakhs in her bank account remained unexplained.
Consequently, the total income was assessed at Rs. 23.97 lakhs. In the appellate proceedings, Ms. Reena submitted that she was a small-time vendor of snacks, and that the deposits were sourced partly from the sale of property and partly from business receipts.
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Chartered Accountant Shri Rajiv Saldi represented the appellant, and argued that the deposits were fully explainable. A detailed cash flow statement was filed, showing receipt of Rs. 14.25 lakhs from the sale of property in the financial year 2015-16, Rs. 7.43 lakhs from the sale of another property in the financial year 2016-17, redeposit of Rs. 3 lakhs withdrawn earlier, and cash business receipts of Rs. 9.63 lakhs.
Supporting documents such as cash books for the financial years 2015-16 and 2016-17, and computation of income, were also furnished. It was further pointed out that the assessee had suffered a long-term capital loss of Rs. 5.06 lakhs from property sales, declared business income of Rs. 1.25 lakhs with a profit rate of more than 8%, and earned interest income aggregating Rs. 3.77 lakhs. After claiming deduction under Section 80TTA, the total income stood at Rs. 4.92 lakhs.
The Revenue being represented by Additional Commissioner of Income Tax Smt. Priyanka Dhar, defended the assessment order. It was submitted that during assessment proceedings no reliable explanation or evidence was produced to justify the large cash deposits, and therefore, the AO was correct in treating them as income of the assessee.
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The Bench comprising of Judicial Member Laliet Kumar and Accountant Member Manoj Kumar Aggarwal observed that the assessee had placed sufficient evidence on record to demonstrate the availability of funds for the impugned deposits.
The Tribunal noted that the cash flow statement, cash books, and computation of income corroborated the claim that the deposits were sourced from property sales, redeposits, and business receipts.
Holding that the assessee had discharged the onus of explaining the deposits, the Tribunal set aside the order of the CIT(A) and directed the AO to accept the computation of income after due verification.
Consequently, the addition of Rs. 21.09 lakhs was deleted, and the appeal was allowed for statistical purposes.
