2021 (4) TMI 394 - AT - Income Tax

Tribunal partially allows appeal on unexplained cash deposits for A.Y 2015-16

Sri Venkatesh Soutoor Tirupati Versus Income Tax Officer Ward 2 (2) Tirupati

Sri Venkatesh Soutoor Tirupati Versus Income Tax Officer Ward 2 (2) Tirupati - TMI Issues:Assessment of unexplained cash deposits in the bank account for A.Y 2015-16.Analysis:The case involved an individual assessee who deposited cash in his bank account during the financial year 2014-15. The Assessing Officer issued a notice under section 148 as the assessee had not filed his return of income. The assessee explained the sources of cash deposits as sale proceeds, old gold purchases, past savings, loans, and gifts. However, the Assessing Officer found discrepancies in the explanations provided and initiated further inquiries.The Assessing Officer disallowed the claim of procuring old gold ornaments through auction sales from Andhra Bank as the bank denied conducting any such auctions. Consequently, the claimed income under section 44AD was not accepted, leading to unexplained cash credit being brought to tax. The Assessing Officer also scrutinized cash withdrawals and gifts received, rejecting a portion of them as sources for cash deposits.The assessee appealed to the CIT (A) against the Assessing Officer's order, but the CIT (A) upheld the decision. The assessee then appealed to the Appellate Tribunal, challenging various additions made by the Assessing Officer. During the hearing, the Tribunal considered the evidence provided by the assessee, including bank statements and confirmation letters, to support the sources of cash deposits.The Tribunal found merit in the assessee's explanations regarding the sources of cash deposits. It directed the Assessing Officer to verify the bank accounts of the assessee and other parties to reconsider the issue. The Tribunal partially allowed the appeal, accepting 50% of ATM withdrawals and marriage gifts as legitimate sources for cash deposits. The gift received from the brother through a banking channel was not considered as a source for cash deposits.In conclusion, the Tribunal granted partial relief to the assessee by accepting some sources of cash deposits and rejecting others. The appeal was treated as partly allowed for statistical purposes, providing a detailed analysis of each issue raised by the assessee in the appeal.