NFAC passes copy paste order narrating wrong facts. ITAT deleted addition towards cash deposits u/s 69A
ABCAUS Neutral Case Law Citation:
ABCAUS 3696 (2023) (04) ITAT
Important Case Laws relied upon by parties:
Chuharmal Vs CIT (1988) 172 ITR 250
Smt. Srilekha Banerjee and others vs CIT 1964 AIR 697
Rajendran & Ors vs. ACIT (2006) 204 CTR (Mad) 9
Hacienda Farms (P) LTD. vs. CIT (2011) 239 CTR (Del) 212
Major Metals Ltd. vs. UOIAND ORS (2012) 251 CTR (Bom) 385
Pradip Kumar Loyalka vs. ITO (1997) 59 TTJ (Pat)(TM) 655
ACIT vs. Sampat Raj Ranka (2001) 73 TTJ (Jd) 642
CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC)
Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC)
In the instant case, the assessee had challenged the order passed by the CIT(A)/ National Faceless Appeal Centre (NFAC) in confirming addition under section 69A of the Income Tax Act, 1961 (the Act) on account of unexplained cash credits towards cash deposits in bank account during demonetization period.
The case of the appellant assessee was selected for scrutiny assessment through CASS category under complete scrutiny. The assessee was asked to explain the source of the cash deposits in bank. The assessee explained that the cash deposits were made out of cash withdrawn from bank and cash gift received from father and past savings. The Assessing Officer (AO) was however not satisfied from the reply and made the impugned addition.
The order of NFAC narrated the facts of the case i.e. nature of the business of the assessee, amount of impugned addition etc. which were not related to the assessee and were utterly opposite to the set of facts of the case of the assessee.
The NFAC with all the wrong facts, confirmed the addition quoting “Human Probability Test”.
Before the Tribunal, the assessee expressed mental torture that he was facing on account of the causal approach adopted by NFAC by adjudicating the case on this basis of hypothetical facts not pertaining to him.
The Revenue accepted the factual error while delivering the finding and fairly accepted that there the error was the result of copy / cut and paste of other case.
The assessee argued that the department had not denied the fact that the assessee had sufficient source of cash deposited in the bank account as there was nothing contrary on record that the cash so withdrawn by the assessee was utilized in buying or acquiring any other asset or expenditure.
The Tribunal opined observed that it was not disputed that the finding recorded by the CIT(A) was no way related to the fact of the case of the assessee. He had simply stated the facts of some other case. Even the amount disputed by the assessee was not matching. Therefore, the CIT(A) failed to do justice to the assessee.
The ITAT also observed that the AO had also not recorded his finding that the cash available with the assessee was utilized by him.
Further, the Tribunal observed that to support the gift by the father, the assessee had placed on record affidavit by his father and filed the bank statement of the father of the assessee justifying the date of withdrawal. However, the revenue had not recorded any finding about the explanation given by the assessee.
Based on this non-disputed fact, the ITAT opined that the cash deposited by the assessee is nothing but the explained money sourced from the withdrawal of the bank account
Accordingly, the ITAT considered deleted the addition made u/s 69A of the Act and the appeal was allowed in favour of the assessee.
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