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2024 (5) TMI 532 - AT - Income TaxUnexplained income of the assessee - Unexplained deposits - contention of the ld. A.R. is that the assessee has withdrawn money from M/s. Kotak Mahindra Bank Koramangala branch and the same has been deposited into same bank - only argument of the ld. D.R. is that assessee has not explained the reason for withdrawals of cash from the said account to hold that source of cash was not explained by the assessee - HELD THAT - In our opinion that cannot be reason for addition on this unexplained income of assessee. Once the assessee has explained the source of deposit as having given from the withdrawal made in the bank account it was not open to the revenue to examine as to what assessee did with that money and cannot chose to disbelieve the plea of the assessee merely on the surmises that it would not be probable for the assessee to keep the money idle. Being so the addition cannot be made on this count. This view of me is supported by the order of the Tribunal in the case of Shri Narayana Shibaroor Shibaraya 2022 (11) TMI 1112 - ITAT BANGALORE as held that the cash deposits in the bank account are preceded by withdrawal from the very same bank account and If the revenue wants to disbelieve the plea of the Assessee then it must show that the previous withdrawal of cash would not have been available with the Assessee on the date of deposit of cash in the bank account. The AO and CIT(A) have proceeded purely on assumption and surmises that cash withdrawn was not available to the Assessee on completely extraneous factors. Addition on deposits made in bank account - assessee has pleaded that assessee has given an amount to one Mr. Sri Maruti Reddy towards purchase advance of immovable property. Later there was a defect in title and amount has been returned and it was used for redepositing the same to the assessee s bank account - HELD THAT - As incumbent upon the authorities to carry out necessary enquiry when assessee has made a statement that assessee has received the said amount from other party namely Shri Maruthi Reddy by way of refund of purchase advance given to him. In the present case the lower authorities without carrying out any enquiry made additions which is inappropriate. As held in the case of S.R. Venkata Ratnam 1980 (8) TMI 73 - KARNATAKA HIGH COURT AO has not made any exercise to disbelieve the version of the assessee about the redepositing of amount out of the earlier withdrawal and also the ld. AO was required to disprove that the amount withdrawn earlier was not the amount redeposited. In the present case when the assessee has taken a plea that it was the amount received from Mr. Maruthi Reddy which was earlier advanced to him to purchase a property and that has not been verified by ld. AO and the addition has been made which is not possible to do so without verifying the same. Thus force in the argument of the ld. A.R. and the addition was made on this count is deleted. Deposits during demonetization - HELD THAT - As explained that the said amount has been deposited out of earlier savings. This is a nominal amount saved by assessee used to redeposit to bank account on demonetization. Considering the smallness of amount no reason to sustain the addition. The addition is deleted. Deposits from receipts from parents - as per assessee the said amount was received from past savings given by assessee s parents and that said amount has been kept by assessee s parent and on demonetization the same amount has been given to the assessee and deposited to assessee s bank account - HELD THAT - As discussed earlier without bringing any material against the assessee addition cannot be made. Accordingly the addition is deleted. Appeal of the assessee is allowed.
Issues Involved:
1. Legality of the order passed u/s 250 of the Income Tax Act, 1961. 2. Confirmation of the total addition of Rs. 15,36,000/-. 3. Specific addition of Rs. 5,50,000/-. 4. Specific addition of Rs. 75,000/-. 5. Non-adjudication of additional ground relating to Notice u/s 143(2). 6. Confirmation of addition based on the alleged turnover of the transportation business. Summary: 1. Legality of the Order Passed u/s 250 of the Income Tax Act, 1961: The assessee challenged the legality of the order dated 20-09-2023 passed by the Ld. CIT(A), NFAC Delhi, under section 250 of the Income Tax Act, 1961, claiming it was opposed to law, facts, and circumstances of the case. 2. Confirmation of the Total Addition of Rs. 15,36,000/-: The assessee argued that the total addition of Rs. 15,36,000/- was erroneous as it included a re-deposit of Rs. 9,00,000/- withdrawn on 08-07-2016 and other amounts explained through various sources. The Tribunal found that the explanation for the Rs. 9,00,000/- deposit was satisfactory, supported by bank statements showing the withdrawal and subsequent deposit. The Tribunal cited precedents from the Karnataka High Court and ITAT Bangalore to support the deletion of this addition. 3. Specific Addition of Rs. 5,50,000/-: The assessee contended that Rs. 5,50,000/- was returned in cash from Sri. Maruthi Reddy, initially given as an advance for property purchase. The Tribunal noted that the lower authorities failed to verify this claim and emphasized the necessity of such verification. Consequently, the addition of Rs. 5,50,000/- was deleted. 4. Specific Addition of Rs. 75,000/-: The Tribunal addressed the addition of Rs. 51,000/- and Rs. 24,000/-, which were claimed to be from household savings and given by the assessee's parents, respectively. Considering the nominal amounts and lack of contrary evidence, the Tribunal deleted these additions. 5. Non-adjudication of Additional Ground Relating to Notice u/s 143(2): The assessee raised an additional ground regarding a Notice u/s 143(2) dated 12-09-2018, which was allegedly not digitally signed. This ground was not adjudicated by the Ld. CIT(A). 6. Confirmation of Addition Based on Alleged Turnover of Transportation Business: The Tribunal found that the Ld. CIT(A) erred in confirming the addition based on the assumption of business turnover, despite the AO's clear statement that the assessee was not involved in any business. This addition was also deleted. Conclusion: The Tribunal allowed the appeal, deleting the total addition of Rs. 15,36,000/- and addressing each specific issue raised by the assessee. The order emphasized the importance of verifying claims and not making additions based on assumptions or without proper evidence.
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