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2022 (12) TMI 442 - ITAT CHENNAIReopening of assessment u/s 147 - Unexplained cash deposits - HELD THAT:- As in the present case if you go through reasons for re-opening of assessment, there is a reasonable belief of escapement of income on the basis of fresh materials which suggest escapement of income. At the stage for issuance of notice, what is to be seen is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. In this case, there is a new material with the AO to form a reasonable belief of escapement of income. There is no merit in arguments taken by assessee on legality of re-opening of assessment, and thus, we reject ground taken by the assessee on re-opening of assessment. Addition on cash deposits - When the assessee has claimed source of Rs. 8,50,000/- out of his retirement benefit, the AO ought to have verified the claim of the assessee in light of confirmation letter filed by his brother-in-law to ascertain the version of the assessee. Since, the AO has failed to carry out necessary enquiries to ascertain the transaction between the assessee and his brother-in-law, we are of the considered view that a benefit of doubt should be given to the assessee to the extent of sum of Rs. 8,50,000/- that the assessee had given loan to his brother-in-law and the same has been returned back by his brother-in-law in the year 2008 - We are of the considered view that the assessee could able to explain source for cash deposits to the extent of Rs. 8,50,000/-. In so far as, balance amount of Rs. 5,69,000/-, no proper explanation was furnished by the assessee which can be considered as acceptable. Although, assessee claims that he had given loan to his brother-in-law out of his past savings amounting to Rs. 3,50,000/-, no credible evidence was with the assessee to justify his case. Assessee could not be able to explain source for cash deposits of Rs. 5,69,000/- and thus, we are of the considered view that there is no error in the reasons given by the Assessing Officer to make addition towards cash deposit to the tune of Rs. 5,69,000/-. To sum up, out of cash deposits of Rs. 14,19,000/-, the assessee could able to explain source to the extent of Rs. 8,50,000/-, out of his retirement benefits. Therefore, we direct the AO to delete addition to the extent of Rs. 8,50,000/- towards cash deposit and for balance amount of Rs. 5,69,000/-, no proper explanation was furnished and thus, addition made by the AO is sustained to the extent of Rs. 5,69,000/- only. Appeal filed by the assessee is partly allowed.
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