2024 (11) TMI 28 - AT - Income Tax

ITAT Modifies Unexplained Cash Deposit Addition; 15% Deemed Business Income, Rest Deleted Due to Old Assessment Year.

The ITAT partially allowed the appeal concerning the addition under section 69A of the Income Tax Act, 1961. The Assessing Officer's decision to add ... Unexplained money u/s 69A - cash deposits as found in the savings bank account of the assessee - AR submits that the assessee has two lorries and the source for cash deposits are only from transport charges. The assessee was engaged in small transport business having no knowledge of income tax proceedings, could not appear before the authorities below. HELD THAT:- On perusal of the assessment order as well as impugned order, there was no assistance from the assessee to the notices issued by the AO as well as CIT(A). The business of the assessee is not in dispute and the cash deposits as found in the savings bank account are constitutes transport charges as also not in dispute. There was no evidence before us to claim presumptive assessment u/s 44AE of the Act and moreover, in our opinion giving lorry numbers are not sufficient to charge income under the provisions of section 44AE of the Act. AO is not acceptable as the assessment year is 15 years old and no purpose will serve in accepting the request of AR. Since the assessment year is 15 years old and there is no material evidence to show to determine the income of the assessee under the provisions of section 44AE of the Act, we deem it proper to direct the Assessing Officer to adopt 15% of the total addition shall be treated as income from business and the balance is deleted. Thus, the ground raised by the assessee is partly allowed. Issues:Consideration of addition made under section 69A of the Income Tax Act, 1961 based on unexplained money.Analysis:The appeal was against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2010-11. The main issue was whether the addition made by the Assessing Officer under section 69A of the Income Tax Act was justified. The Assessing Officer found cash deposits in the assessee's savings bank account and issued a notice under section 148 as no return of income was filed. The assessee, engaged in the transport business, did not respond to the notices. The Assessing Officer added the entire cash deposits to the total income. The ld. CIT(A) confirmed this decision as the assessee did not provide any explanation or written submissions. The assessee argued that the cash deposits were transport charges for two lorries and should be assessed based on peak balance in the account. The ld. AR requested another opportunity to present evidence. The ld. DR opposed, stating the assessee had enough chances. The ITAT noted the source of income was transport charges and that the business was not disputed. However, there was no evidence for presumptive assessment under section 44AE. The ITAT directed the Assessing Officer to consider 15% of the total addition as income from business and delete the rest, as the assessment year was old and no new evidence was presented. The appeal was partly allowed, and the decision was pronounced on 29th October 2024 in Chennai.