INCOME TAX ACT, 1961

Section 69A

Income from undisclosed sources - Addition under section 69A - Alleged unexplained cash deposit - Assessee successfully explained source of cash deposit

AO came to know that assessee deposited cash in her saving bank account and accordingly, the assessee was asked to explain the source of cash deposit. Assessee stated that she had been doing business of procuring Papad and snacks from manufacturer and selling the same in retail trading. It was explained that the source of cash deposit was her trading business in Papad and snacks. However, the explanation of the assessee did not find any favour with the AO, who was of the firm belief that the assessee failed to discharge the onus of explaining the source of cash deposit. Accordingly, the AO made addition of the same under section 69A. Held: AO accepted the return of the assessee thereby accepting the turnover from the sales of Papad and snacks. Since the business of the assessee had been accepted by the AO by accepting her return of income, there should not be any doubt in accepting the source of cash deposit, which was assessee's trading business. Further, the assessee successfully explained that the source of cash deposit was her trading business, therefore, the addition made under section 69A on account of unexplained cash deposit would not be sustainable and hence, the same was deleted.

REFERRED : Rosy Kakkar v. ITO 2020 TaxPub(DT) 4858 (Del-Trib).

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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