There is no presumption that people having low income cannot have small saving – ITAT

There is no presumption that people having low income cannot have small saving

In a recent judgment, ITAT has deleted addition u/s 69 towards cash deposit in bank holding that here is no presumption that the people having low income cannot have small savings.

ABCAUS Case Law Citation:
ABCAUS 3887 (2024) (02) ITAT

In the instant case, the assessee filed two separate appeals for two successive assessment years challenging the order passed by the CIT(A) in confirming of the addition on account of unexplained deposits into his bank accounts under section 69 and subjecting it to higher rate of tax under section 115BBE of the Income Tax Act, 1961 (the Act).

Brief facts of the case are that assessment order was framed in this case under section 153A r.w.s. 143(3) of the Act. In the assessment order, the Assessing Officer (AO) had made several additions to the returned income including the addition on account of deposits into bank accounts as unexplained under section 69 r.w.s. 115BBE of the Act.

Upon assessee’s appeal, the CIT (A) though granted substantial relief in respect of other additions made by the AO but he sustained the addition on account of unexplained deposits into bank amounting to Rs.one lacs and Rs, two and half lakhs for two Assessment Years.

The Assessee’s plea in this regard was that assessee had filed affidavit from his father and brother contributing this amount to the assessee. But this plea was not accepted on the ground that they have low income or that source of income is not given in detail.

The Tribunal upon consideration and perusing the records, opined that the amount involved was very small but there is no presumption that the people having low income cannot have small savings.

Accordingly, the ITAT set aside the orders of the authorities below and decide the issue in favour of the assessee.

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• PCIT cannot invoke the revisionary jurisdiction u/s 263 on instance of Assessing Officer
• AO can’t disturb income returned by assessee, without issue of notice u/s 143(2) – ITAT
• Source of cash being sales proceeds of household items upon sale of flat is plausible
• CPC was not justified in making the disallowance u/s 40a(ia) for non deduction of TDS
• No addition when cash deposited in bank was available as cash in hand in the books