Allegation that there is a cash deposit in bank account

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CHANDRAKALA (Querist)
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21 April 2023 Kindly provide supporting caselaws where Income tax Deparment made an allegation that there is a cash deposit in bank account wihtout actual cash deposit in the bank account and also made an allegation of sale of shares wihtout having shares at all.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 April 2023 In this situation the assesse can rely on the judgment of High court of Delhi in the case of “Signature Hotels (P) Ltd. 338ITR 51 (Delhi)” where in it was held that: “The reasons and the information referred to were extremely scanty and vague. There was no reference to any document or statement except AIR information. The AIR could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The AIR information was not a pointer and did not indicate escapement of income. Further it was apparent that the assessing officer did not apply his own mind to the information and examine the basis and material of the information. If the assessing officer accepts the plea on the basis of vague information in a mechanical manner. The commissioner also acted on the same basis by mechanically giving approval; therefore, proceedings under section 148 were to be quashed.

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