Cash withdrawal being more than amount of cash deposited and its taxation as Unexplained Investment u/s 69

 

The issue of Cash withdrawal being more than amount of cash deposited and its taxation as Unexplained Investment u/s 69 was there before ITAT in the following case:

 

 

ITAT CHENNAI

MR.SHANMUGAM ETHIRAJ

VERSUS

THE INCOME TAX OFFICER

NON-CORPORATE WARD-1 (4

CHENNAI

I.T.A. No. 822/Chny/2020

Dated.- May 11, 2022

 

On the issue of validity of addition u/s 69 was there before ITAT, Chennai wherein it observed as under:

 

Once the AO never disputed fact that cash withdrawal from bank account is higher than amount of cash deposited into bank account, then the A.O. ought not to have made additions towards cash deposits into bank account only for the reason that there is time gap of more than 3 to 5 days between cash withdrawal and cash deposits from very same bank account.

 

It was not the case of the AO that cash withdrawal from bank account on earlier occasion had been spent by the assessee or used for some other purposes. In absence of any finding contrary to explanation of the assessee that cash deposits into bank account is out of withdrawal from earlier occasion cannot be disregarded.

CIT(A), without appreciating above facts has simply confirmed additions made by the Assessing Officer.

 

Hence, we reverse findings of the learned CIT(A) and direct the Assessing Officer to delete additions made towards cash deposits into City Union Bank account u/s.69

 

With above observation, the issue was decided in favour of assessee.

 

The ITAT referred the Delhi High Court In Commissioner Of Income-Tax Versus Kulwant RAI.Dated.- February 13, 2007-291 ITR 36, 210 CTR 380, 163 TAXMANN 585.