Unexplained Cash Deposits u/s 69A: ITAT Reduces Addition to Rs. 2.5 Lakh due to Partial Explanation of Source [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) reduces addition to Rs. 2.5 Lakh for unexplained cash deposits under section 69A of Income Tax Act,1961, providing relief of Rs. 8.47 Lakh due to partial explanation of source.

Deepak Goyal,appellant-assessee,challenged the order dated 30.11 .2023 passed by Commissioner of Income Tax(Appeals)/ National Faceless Assessment Centre[CIT(A)/NFAC] for the Assessment Year (AY) 2017-18.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

A Single member bench comprising Satbeer Singh Godara ( Judicial Member ) during the hearing, noted, with assistance from the department, that both lower authorities had added Rs. 10,97,300 as unexplained money under section 69A in the assessment made on 01.12.2019, and this was confirmed in the lower appellate decision.

Section 69A of the Act dealt with unexplained money, bullion, jewellery, or other valuable articles. If a taxpayer was found to have such assets not recorded in their books, and they could not explain their source, the value of those assets was treated as income and taxed. The taxpayer had to provide a reasonable explanation for the assets, and if they failed to do so, the assets were considered unaccounted for and subject to tax. The burden of proof was on the taxpayer to explain the origin of these assets.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The assessee admitted making cash deposits of Rs. 9,12,000 and Rs. 2,06,500 during the year, stating that Rs. 8,00,000 came from cash withdrawals on 27.02.2016 and Rs. 1,85,300 from previous sales. The Revenue could not dispute these amounts or the source of the cash sales. However, the taxpayer could not fully explain the source of the disputed cash deposits.

In this context, a lump sum addition of Rs. 2,50,000 was deemed fair. It was also decided that the sale would not be considered in other cases. As a result, the assessee received a relief of Rs. 8,47,300, and his main issue was partly resolved.

In short,the appeal filed by the assessee partly allowed the appeal.

To Read the full text of the Order CLICK HERE

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