ITAT Dismisses Appeal in Cash Deposit Case, Upholds Rs. 8 Lakh Addition

The Income Tax Appellate Tribunal (ITAT) Ahmedabad dismissed an appeal filed by an assessee in a case involving unexplained cash deposits made during the demonetisation.

The assessee had deposited Rs 8,16,500 in his bank account during the demonetisation period. When the AO questioned the source of this deposit, the assessee claimed that these were from past withdrawals of Rs 15 lakh.

The AO noted that the assessee had taken a loan of Rs. 20 lakhs in March 2016, from which he had withdrawn Rs. 15 lakhs. The officer believed that the withdrawn cash might have been spent earlier, making it difficult to believe that the Rs. 8 lakhs deposited later came from those earlier withdrawals. Therefore, he made an addition of Rs 8 lakhs to the income of the assessee.

The assessee filed an appeal before the CIT(A), but the same was rejected as the assessee did not submit the required documents asked for by the CIT(A). Therefore, the assessee approached the Income Tax Appellate Tribunal (ITAT), Ahmedabad.

The ITAT, after reviewing the case, found no valid justification for the cash deposits. It noted that apart from the Rs. 8 lakh deposit, the assessee had also made a Rs. 9 lakh deposit earlier in 2016. The Tribunal concluded that the assessee failed to prove the source of these funds. Therefore, the appeal was dismissed, and the addition of Rs. 8 lakhs was upheld.