2023 (3) TMI 207 - AT - Income Tax

Determination of income - Addition u/s 68 - cash deposits in bank unexplained - assessee submitted that the entire amount of cash deposit cannot be assumed as income of the assessee and as there were various withdrawals from the bank by the assessee which were available with the assessee for re-deposit - whether the amount of cash deposit represents the income of the assessee in its entirety? - HELD THAT:- If the cash deposit is treated as income then on the same logic the withdrawal from the bank in cash should be treated as an expense until and unless some contrary information is available on record. These contrary informations may include the expenses incurred by the assessee for his personal purposes such as foreign travelling, household expenses, marriages, education or any other expense of personal nature. Likewise, there is also a possibility of having withdrawn the money by the assessee from the bank for the purpose of making some investment which is of capital nature. However, the authorities below have not gone/ considered all the factual aspects but reached to the conclusion that the cash deposits represent the income of the assessee.

As relying on MAHESH K. BHUTIYA “PARTH” VERSUS THE INCOME TAX OFFICER WARD-2 (3) , PORBANDAR [2022 (8) TMI 80 - ITAT RAJKOT] we are inclined to adopt the same basis to determine the income of the assessee. Thus, we work out the income of the assessee at 8% of total cash deposit. Hence, the ground of appeal of the assessee is partly allowed.