Section 69A Addition for Verification of Alleged Business Cash Deposits Remanded

The Hyderabad Bench of the Income Tax Appellate Tribunal partly allowed the Revenue’s appeal for statistical purposes and remanded the issue of substantial cash deposits back to the Assessing Officer for fresh verification. 

The Tribunal held that while cash deposits forming part of genuine business turnover cannot ordinarily be taxed again under Section 69A of the Income-tax Act, 1961, the assessee had failed to produce sufficient supporting evidence to substantiate the alleged business activity and source of deposits. 

The ruling draws an important distinction between legally unsustainable double taxation of recorded business receipts and the evidentiary burden resting upon taxpayers to establish the genuineness of business transactions and cash flows.