2023 (7) TMI 345 - AT - Income Tax

Appeal successful in challenging unexplained cash deposits for A.Y. 2017-18. Assessing Officer's decision overturned.

Hiteshkumar Naginbhai Parmar Versus ITO Ward-5 (3) (3), Ahmedabad

The appeal challenging the addition of cash deposits as unexplained money under Section 69A for A.Y. 2017-18 was successful. The Assessing Officer's ... Unexplained money u/s 69A - assessee has not given the explanation in respect of the cash withdrawn and cash deposited prior to demonetization as well as during the pre-demonetization period - HELD THAT:- As before AO assessee has filed the cash book of the Yogi Hosiery as well as purchase register, sales register and ledger account with Vijaya Cooperative Bank Ltd. Assessee has also submitted details of cash deposits withdrawn from Vijaya Cooperative Bank Ltd. as well as bank statement of the said bank. Month wise opening cash in hand and cash sales as well as cash deposited in bank and cash withdrawal from bank from May 2015 till October 2015 was summarized and it appears that the assessee was regularly depositing cash in the banks account. Business of the assessee was not disputed by the AO as well as the cash transactions and the sales books as well as purchase books were also not disputed by the AO. Thus, the addition made by AO on account of unexplained money u/s 69A does not sustain as the assessee has explained in entirety all the amounts through various documents. Appeal of assessee allowed. Issues Involved:The appeal challenges the order of the Ld. Commissioner of Income Tax (Appeals) regarding the addition of cash deposits in the bank account as unexplained money under Section 69A for A.Y. 2017-18.Summary:1. The assessee filed the return of income for A.Y. 2017-18, declaring total income of Rs. 5,91,170. The Assessing Officer made an addition of Rs. 11,21,000 as unexplained money under Section 69A due to significant cash deposits during the year. 2. The assessee appealed before the CIT(A), who dismissed the appeal. The appellant contended that they could not respond to the notices due to not checking their email regularly. They argued that the cash deposits were part of regular business activities, supported by relevant documents. 3. The Ld. D.R. argued that the appellant failed to explain the cash withdrawals and deposits before and during demonetization, supporting the assessment order. 4. After hearing both parties and examining the evidence, it was found that the appellant had provided sufficient documentation including cash books, sales registers, and bank statements to justify the cash transactions. The Assessing Officer did not dispute the business activities or the cash transactions, leading to the allowance of the appeal.Final Decision:The appeal by the assessee is allowed, and the addition of Rs. 11,21,000 as unexplained money under Section 69A is deemed unjustified based on the provided documentation and explanation.