Criteria for treating cash deposits under the head �income from other sources�

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD ‘A’ BENCH : Hyderabad
(Through Video Conference)
 

Before Smt. P. Madhavi Devi, Judicial Member
And
Shri A. Mohan Alankamony, Accountant Member
 

ITA No. 117/Hyd./2019
Assessment Year: 2014-15

Sri Venkata Nagaraju Dasam

PAN: AIBPD4476E

Appellant

vs.

ITO, Ward 9(4)
Hyderabad 

Respondent

For Assessee: Shri M. Bhupal Gowd, , C.A.
For Revenue: Sri Venudhar Godesi, D.R
 

Date of Hearing : 14/07/2021
Date of Pronouncement : 26/07/2021
 

O R D E R

This is assessee’s appeal filed against the order of CIT(A)-7, Hyderabad dated 26.11.2018 relating to A.Y. 2014-15.

2. Brief facts of the case are that assessee an individual, filed his return of income for the AY 2014-15 on 21.12.2015 declaring a total income of Rs. 2,28,400/-. The case was selected for limited scrutiny under CASS to verify the cash deposits in savings bank accounts as they were more than the assessee’s turnover. The assessee during the assessment proceedings u/s 143(3) of the Income Tax Act, 1961 [in short ‘the Act’] was asked to furnish information of its business activity, computation of income, bank account  statement and details of debits and credits appearing in his savings bank account. However, since the assessee furnished only part of the information, the AO completed the assessment u/s 144 of the Act and has treated the cash deposits into Citizen Co-operative bank account to the extent of Rs. 58,80,000/- as income of the assessee under the head ‘income from other sources’ and brought the same to tax.

3. Aggrieved, assessee preferred an appeal before the CIT(A) who confirmed the addition of Rs.58,80,000/- made by the AO and assessee is in second appeal before us by raising the following grounds of appeal.

4. The ld.counsel for the assessee submitted that assessee and his family members are into coconut business and owned 15 acres of land in which coconuts are grown and sources of cash deposits are the receipts from the sale of the crop. He submitted that assessee’s father was not well and was being treated and all of his family members from time to time deposited cash into assessee’s bank account for his treatment. He submitted that the AO has not accepted this contention of the assessee by holding that assessee’s father has expired in May, 2013 whereas all deposits in the account are thereafter i.e from June, 2013. He submitted that assessee’s father has expired on 09th May, 2014 and not in May, 2013. He submitted that all these facts need to be considered by the authorities below. He also made an alternative submission that even if the said cash deposits are to be treated as belonging to the assessee, it should be treated as part of turnover of the assessee and income is to be estimated thereon as business income of the assessee. In view of the same, he prayed for remittance of the issue back to the file of AO.

5. In the result, assessee’s appeal is treated as allowed for statistical purposes.

Order pronounced in Open Court on 26/07/2021.

Please find attached the enclosed file for the full judgement