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 ...
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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 cash deposits to the assessee's income was modified. The ITAT directed that 15% of the total addition be considered business income, deleting the remainder, due to the absence of new evidence and the age of the assessment year. The decision was pronounced on 29th October 2024 in Chennai.
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.
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