Shri Pandian Hari Vs. The Income Tax Officer, Non-Corporate Ward 11(4), Chennai

Parties Involved

Facts Summary

During the assessment proceedings for the Assessment Year 2023-24, the Assessing Officer (AO) noted that the assessee, Shri Pandian Hari, had made a cash deposit of Rs. 34,52,000/- in his bank account. The AO directed the assessee to explain the source of these cash deposits. The assessee contended that the source of the cash deposits was cash withdrawals amounting to Rs. 32,71,000/-, and he had also taken cash loans from his wife, mother, and other relatives. Additionally, he claimed to have given cash to his employees as imprest. However, the AO did not accept these explanations and made an addition of Rs. 34,52,000/- under section 69A of the Income Tax Act, 1961. The assessee appealed this addition before the First Appellate Authority (FAA), reiterating his earlier submissions and providing a detailed cash book and bank statements. The FAA, however, held that the assessee had not provided sufficient documentary evidence to support his explanations. Consequently, the assessee appealed to the Tribunal. In another issue, the assessee declared a turnover of Rs. 74,41,000/- in his return of income, whereas the TDS statements showed contractual receipts of Rs. 87,73,000/-. The AO directed the assessee to explain the difference of Rs. 13,32,000/-. The assessee claimed that he was following the mercantile system of accounting and had disclosed the turnover in the earlier year, whereas the deductor followed the cash system of accounting. The AO and subsequently the FAA held that t…

Legal Issues

• 1. Addition of Rs. 34,52,000/- under section 69A of the Act as unexplained cash deposit.
• 2. Addition of Rs. 13,32,000/- on account of difference between the turnover reported and what is shown in the TDS statements.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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