Assessment Was Based Solely On Existence Of Cash Deposits Linked To Incorrect PAN: Ahmedabad ITAT Deletes Addition U/S 69A Of IT Act

The Ahmedabad ITAT deleted an addition under Section 69A of the Income Tax Act, which was based solely on substantial cash deposits linked to an incorrect PAN. The assessee, a petroleum products dealer, had consistently filed returns under her original PAN and paid penalties for holding two PANs. The AO’s assessment, which treated cash deposits during the demonetization period as unexplained money, was found unsustainable. The Tribunal noted that the AO failed to verify the books of account, tax audit report, or the return filed under the original PAN. The assessee’s compliance with the Income Tax Act provisions and the lack of intent to conceal income were highlighted. The Tribunal emphasized that the use of two PANs was due to a duplicate PAN application, not an attempt to evade taxes, leading to the deletion of the addition.