This analysis explores the Income Tax Appellate Tribunal’s decision in Deepanker Mahajan vs ITO, Ward-70(3), New Delhi, concerning the challenge against additions made by the Commissioner of Income Tax (Appeals) regarding unexplained cash deposits in the bank account for the assessment year 2013-14.
The appellant, Deepanker Mahajan, filed an appeal against the order of the CIT(A)-36, New Delhi, which partially sustained an addition of Rs. 8,39,748 as unexplained cash deposits. The case focuses on the justification of these deposits with reference to available cash flow statements and the acceptability of gifts received during the year.
The tribunal’s review emphasized the importance of providing sufficient evidence to support cash deposits and addressed discrepancies in the recognition of cash-in-hand at the beginning of the year. The ruling highlighted procedural aspects concerning the admission of new evidence and the relevance of proper documentation to substantiate financial claims.
The tribunal’s decision to grant partial relief based on the cash flow statements presented illustrates the critical role of detailed financial records in tax disputes. This case serves as a precedent for taxpayers on the necessity of maintaining transparent and traceable financial statements to avoid or contest additions by tax authorities.
The Tribunal directed the Assessing Officer to modify the addition and granted relief of Rs. 7,00,963 to the assessee. However, the claim regarding gifts received was denied due to a lack of detailed evidence, endorsing the approach taken by the CIT(A).
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