Unexplained Cash Deposits of ₹1.04 Crore: ITAT Sets Aside Matter for CIT(A)’s Fresh Adjudication [Read Order]

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the matter concerning unexplained cash deposits of ₹1.04 crore for fresh adjudication by the Commissioner of Income Tax (Appeals) [CIT(A)], following similar rulings in the assessee’s cases for Assessment Year (AY)s 2013-14 and 2014-15.

Annasaheb Ramesh Chhaganlal Ajmera, a credit cooperative society, did not file its income tax return for AY 2012-13. Based on AIR/NMS data, the Assessing Officer (AO) found cash deposits of ₹1,04,00,000 in its IDBI Bank account and reopened the case under section 147. A notice under section 148 was issued, but the society neither filed a return nor responded to notices under section 142(1) seeking an explanation.

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Due to non-compliance, the AO completed the assessment ex parte under section 144 read with section 147 and added ₹1,04,00,000 as unexplained income in the order dated December 2, 2019.

The assessee appealed before the CIT(A), claiming that the cash deposits of ₹1,04,00,000 came from loan recoveries and provided supporting documents, including audited books, a bank statement, and a cash book.

The CIT(A) dismissed the appeal, noting that the assessee failed to file a return or an audit report and did not provide details of those who repaid the loans. The explanation lacked sufficient evidence, and some documents contradicted the claim that operations had ceased.

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As the source of deposits remained unverified, the CIT(A) upheld the AO's addition. Aggrieved, the assessee appealed to the Tribunal.

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The two member bench comprising R.K Panda(Vice President) and Astha Chandra(Judicial Member) examined the case and observed that the AO had treated ₹1,04,00,000 as unexplained income under Section 144 read with Section 147 due to a lack of supporting documents. The CIT(A) had upheld the addition. Both parties had acknowledged that the facts for AYs 2013-14, 2014-15, and 2016-17 were similar to those of AY 2012-13.

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The appellate tribunal referred to its previous rulings in the assessee’s cases for AYs 2013-14 and 2014-15, where it had remanded similar issues to the CIT(A) for fresh adjudication after finding that the CIT(A) had confirmed additions without considering the assessee’s explanations. It also took into account that for AY 2016-17, the AO had accepted the source of cash deposits under similar circumstances.

Considering these factors and the absence of contrary evidence from the Revenue, the tribunal set aside the issue to the CIT(A) for fresh adjudication. The assessee was instructed to provide the required documents without unnecessary delays, and the CIT(A) was granted the authority to decide the matter based on facts and the law.

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In short,the appeal filed by the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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