2025 (8) TMI 1088 - AT - Income Tax

Sec. 68: Rs.10 lakh unexplained deposit accepted as contra entry; addition deleted for lack of inquiry and health issues.

Natthu Balaji Charde Versus Income Tax Officer Ward–3 (4), Nagpur

ITAT Nagpur allowed the appeal, holding that the unexplained Rs.10 lakh deposit was satisfactorily explained as a contra entry-withdrawn from a savings ... Unexplained cash deposit - assessee could not disclose the source of deposit in saving bank account - assessee is a Senior Citizen - Submissions of the assessee that due to lack of knowledge about technology, old age and suffering from certain health issues, the assessee failed to respond to the notices of the Department, as the notices were served by the Department through online portal and no physical copy of notice were received by the assessee. HELD THAT:- As explained by the assessee that the deposits were a contra entry i.e., amount withdrawn from saving bank account maintained in Punjab National Bank and deposited in other saving bank account maintained at Central Bank of India. In our considered view, the Assessing Officer as well as the learned CIT(A) failed to make enquiry for such deposit. Accordingly, we hold that the assessee has clearly explained the source of such deposit of Rs. 10 lakh in saving bank account. If the Assessing Officer and the learned CIT(A) had made proper enquiry, the source of such deposit by the assessee would have been established. Assessee appeal allowed. Appeal against CIT(A) order for AY 2012-13 challenging addition of Rs. 10,00,000 as 'unexplained cash deposit' in the assessee's savings bank account. Assessing Officer recorded that source of the deposit was not disclosed and the assessee had not filed return; CIT(A) confirmed the addition by ex parte order as the assessee did not appear. The assessee, a senior citizen, contended non-receipt of physical notices, inability to use the online portal due to age and health, and explained the deposit as a 'contra entry'-withdrawal from a Punjab National Bank savings account and deposit into a Central Bank of India savings account on the same day. Tribunal held that the AO and CIT(A) 'failed to make enquiry for such deposit' and concluded that the 'assessee has clearly explained the source of such deposit of Rs. 10 lakh in saving bank account.' Tribunal set aside the impugned order and allowed the appeal.