ITAT Deletes Entire Rs. 12.71 Lakh Addition in Legal Heir’s Appeal; Holding Cash Deposits Were Fully Explained:

ITAT Deletes Entire Rs. 12.71 Lakh Addition in Legal Heir’s Appeal; Holding Cash Deposits Were Fully Explained ITAT Kolkata allowed the appeal filed by the legal heir, holding that cash deposits during FY 2016-17 were fully explained. It quashed the CIT(A) order and deleted the entire addition of Rs. 12.71 lakh under Section 69A of the Income Tax Act. Mrs Kaveri V. Joshi, legal heir of the deceased assessee named Vinoy Pandharinath Joshi, has filed the current appeal in the ITAT Kolkata, challenging an order dated January 15, 2025, passed by the CIT(A) Kolkata under Section 250 of the Income Tax Act, 1961. The order had confirmed the addition of Rs. 12,71,500 to the assessee's income, made by the Assessing Officer (AO) under Section 69A of the Act.

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When the tribunal analysed the facts of the case, it noted that the assessee had deceased and the present appeal has been filed by his wife, Smt. Kaveri Joshi, who is now the legal heir. During the assessment of the return filed by the assessee, the AO had made an addition of Rs. 12,71,500 to the assessee's income on the grounds of cash deposits amounting to Rs. 23,21,500 made during the financial year 2016-17. The tribunal noted that the assessee had not responded to several notices, as the assessee was deceased and employed in the Merchant Navy. Meaning, the non-compliance was not intentionally done. During the appellate proceedings, Kaveri argued all the relevant documents (details of four bank accounts), explaining that the cash deposits were furnished by her before the CIT(A). However, the CIT(A) accepted only cash deposits made to one bank account. In conclusion, the CIT(A) partially allowed the appeal by deleting the addition to some extent.

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Before, the tribunal assessee again furnished all the relevant documents proving the cash deposits. The tribunal, after examining all the documents deeply, noted that "the assessee had the sources for cash deposits and has fully explained the source of cash deposits into bank account during financial year 2016-17." Accordingly, ITAT quashed the CIT(A)'s order and deleted the complete addition of Rs. 12,71,500 made by the AO. Allowed the appeal of the assessee in full.