No additions if AO failed to contradict assessee’s contention that he didn’t deposit cash in his bank a/c: ITAT

Case details: Ashok Kumar v. ITO - [2021] 128 taxmann.com 259 (Chandigarh - Trib.)

Judiciary and Counsel Details

• • Smt. Diva Singh, Judicial Member. 
  • Ashok Khanna, Addl. CIT for the Respondent.

Facts of the Case

Assessing Officer (AO) made additions for cash deposits made in assessee’s saving account. Assessee stated that he had not deposited the amount. Considering possibly the narrations in the bank account, assessee submitted that probably some Bank personnel misused assessee’s bank account by depositing the cash amount through a single voucher. It was pointed out that while accepting the deposit, the Bank officials did not record the details of the specific currency denominations being deposited and also failed to record the details of the address, PAN, etc., of the depositor. Cash deposits were accepted without following these protocols. Assessee requested the tax authorities to enquire the real owner/beneficiary of the said transactions. CIT(A) confirmed the additions made by AO.

ITAT Held

On appeal, Chandigarh ITAT held the only evidence relied upon is on some ‘Aharan Slip’ where the signatures denied by assessee were arbitrarily identified as assessee’s signatures. In the face of the consistent denial of assessee, the legal requirement of not subjecting it to forensic examination becomes again questionable and consistently an arbitrary exercise of power. Assessee had consistently stated that Bank personnel had misused his account without his authority. The sums had been utilized again by the Bank personnel, evident by way of transfer entries. Assessee named the beneficiary as erstwhile Bank Manager, and there was no contradictory evidence.

However, considering that since the correctness of the above assertions needed to be verified, ITAT set aside the order by AO. Tax authorities were directed to consider the fact that there had been a continued lapse on the part of the specific bank branch in as much as the currency details remained unmentioned, PAN details of the depositor of the huge cash amount remained unaddressed. Further, the fact that the beneficiary account was claimed to belong to Bank Manager of PNB needs to be specifically addressed.