ITAT allows appeal, deletes additions under section 69A for cash deposits & rental income differences. Assessee's evidence accepted.

The ITAT allowed the appeal, deleting additions made under section 69A for cash deposits and alleged rental income differences. The ITAT found the assessee provided evidence of cash withdrawals supporting the deposits, leading to deletion of cash deposit addition. Additionally, as the rental property was jointly owned, with the co-owner declaring their share of income, no additional income was attributed to the assessee, resulting in deletion of the rental income difference addition.

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Issues:
1. Addition of cash deposited in bank account under section 69A of the Income Tax Act, 1961.
2. Addition of alleged difference in rental income between return and Form 26AS.

Analysis:

Issue 1: Addition of cash deposited in bank account under section 69A of the Income Tax Act, 1961:
The appeal was filed against an order passed by the ld. CIT(A)-XXV, New Delhi for the assessment year 2009-10. The AO made additions totaling to &8377; 94,71,300, including &8377; 60,34,410 and &8377; 23,47,102 on account of cash deposits in the bank account under section 69A. The assessee argued that the cash deposits were made from withdrawals during the relevant assessment year. The ld. CIT(A) confirmed the addition u/s 68. However, the ITAT Delhi found that the assessee provided a cash flow statement and bank statements showing significant withdrawals, proving the availability of cash. Consequently, the ITAT deleted the addition of &8377; 8,98,620 related to cash deposits.

Issue 2: Addition of alleged difference in rental income between return and Form 26AS:
Regarding the addition of &8377; 4,20,000 for the alleged difference in rental income, the AO compared the rent shown by the assessee with Form 26AS. The ld. CIT(A) upheld this addition, stating that the explanations provided lacked documentary support. However, the ITAT noted that the property generating rental income was jointly owned by the assessee and another entity. The ITAT observed that the rental income was shared between the co-owners, with each declaring their respective shares. As the other owner had declared their share of rental income, the ITAT concluded that no additional income should be attributed to the assessee. Therefore, the ITAT deleted the addition of &8377; 4,20,000.

In conclusion, the ITAT allowed the appeal of the assessee, deleting both the additions made by the AO and confirmed by the ld. CIT(A). The judgment was pronounced on 11th April 2022.

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