This document provides a detailed analysis of the Income Tax Appellate Tribunal’s final decision on the case between Ashish Seth, Delhi and ITO, Circle-9(1), C.R. Building, New Delhi, concerning the assessment year 2017-18. The case number is ITA 2640/DEL/2022, presided over by Accountant Member Shri Anil Chaturvedi.
The appeal filed by the assessee, Ashish Seth, was directed against the order dated 21.09.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi, relating to the assessment year 2017-18. The primary issue in this case was the addition of Rs.7,77,000/- made on account of cash deposits during the demonetization period.
During the hearing on 15.12.2022, the Revenue was represented by Shri Om Prakash, Sr. D.R., and the assessee was represented by Shri Rajan Sachdeva, C.A. The Tribunal proceeded to adjudicate the appeal based on the materials on record and submissions made by both parties.
The assessee raised several grounds of appeal, primarily challenging the addition of Rs.7,77,000/- on account of cash deposits made during the demonetization period.
During the assessment proceedings, the AO noticed that the assessee had deposited cash of Rs.10,27,000/- between 9th November 2016 to 31st December 2016. The assessee explained that the deposits were made from the opening cash balance. However, the AO accepted only Rs.2,50,000/- as explained and treated the remaining Rs.7,77,000/- as unexplained income, making an addition under section 69A and levying tax under section 115BBE.
The assessee argued that the cash deposits were made from the opening cash balance of Rs.14,85,784/- and provided a cash ledger to support the claim. The ledger showed withdrawals and deposits, including household expenses, demonstrating sufficient balance to cover the cash deposits.
The Tribunal noted that the assessee had provided a cash ledger showing an opening balance and regular withdrawals for household expenses. The Tribunal observed that the AO did not provide any material evidence to disprove the assessee’s claim. Additionally, the Tribunal referred to the case of Mr. Atish Singla vs. ITO, where a similar addition was deleted.
The Tribunal concluded that the AO was not justified in making the addition of Rs.7,77,000/- and directed its deletion, allowing the assessee’s appeal.
Order pronounced in the open court on 17th January, 2023.
(ANIL CHATURVEDI)
ACCOUNTANT MEMBER
This case underscores the importance of providing concrete evidence when challenging an assessee’s claims. The Tribunal’s decision to delete the addition highlights the necessity for the Revenue to substantiate its claims with factual evidence.
The appellant, Ashish Seth, challenged the addition of Rs.7,77,000/- made on account of cash deposits during the demonetization period, arguing that the deposits were made from the opening cash balance.
The appellant contended that the cash deposits were from the opening cash balance of Rs.14,85,784/- and provided a detailed cash ledger to support this claim. The ledger showed withdrawals for household expenses and other deposits, demonstrating sufficient cash to cover the deposits in question.
The Tribunal found that the AO did not present any material evidence to disprove the assessee’s explanation. The Tribunal also referred to the case of Mr. Atish Singla vs. ITO, where a similar addition was deleted, to support its decision.
The Tribunal’s decision in the case of Ashish Seth, Delhi vs ITO, Circle-9(1), C.R. Building, New Delhi, reaffirms the principle that additions must be substantiated with concrete evidence. The deletion of the addition highlights the importance of thorough verification and the need for the Revenue to base its claims on factual evidence.
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