MOHAMMED FARAAZ DOSANI,MUMBAI vs. INCOME TAX OFFICER 20(2)(2), MUMBAI

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ITA 2221/MUM/2023Status: DisposedITAT Mumbai23 October 2023AY 2017-184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had sufficiently demonstrated the source of cash deposits through bank statements, cash books, and a gift deed. Since the Assessing Officer did not present contrary material, the addition was deemed unjustified.

What were the facts?

The assessee, a del-creder commission agent, deposited Rs. 31,50,000/- in cash during the demonetization period. The assessee explained this deposit as cash sales and a gift from his father, supported by a gift deed and cash book.

What were the issues?

Whether the cash deposits made by the assessee during the demonetization period were adequately explained and whether the addition of Rs. 31,50,000/- as unexplained cash credit was justified.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Hearing: 12.10.2023Pronounced: 23.10.2023

आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assesse is directed against the order passed by the ld. CIT(A) NFAC, dated 18.04.2023 for A.Y. 2017-18. The assessee has raised the following grounds before us: This Appeal is against the Order passed by Commissioner of Income Tax (Appeals) and relates to Assessment Year 2017-2018. Considering the facts and circumstances of the case, both the lower authorities erred in facts and in law in making an addition of the sum of Rs. 26,50,000/- asunexplained cash credit wherein source of cash deposit were explained and cash book were submitted vide letter dt. 24.12.2019. The Appellant submits the disallowance is unjustified because no valid satisfaction recorded by either of the lower authorities, and without considering the facts and circumstances of the case.

P a g e | Mohammed Faraaz Dosani Vs. Income Tax Officer 20(2)(2)

1.

The appellant submits that no disallowance can be made in the absence of a valid reason for disagreeing with the appellant's contention. Having regard to the facts and circumstances of the case, and the provisions of law, the appellant submits that the disallowance is unjustified and the same required to be deleted. The Appellant craves leave to add to, alter or amend, the above Grounds of Appeal as and when advised.”

2.

Fact in brief is that return of income declaring total income of Rs.369,080/- was filed on 30.07.2017. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 22.09.2018. The assesse is del-creder commission agent for fishermen at bhavcha –Dhakka, Mazgaon. During the course of assessment the AO noticed that assessee has deposited cash to the amount of Rs.31,50,000/- during the demonetization period. On query, the assessee explained that there was cash sales to the amount of Rs.28,00,000/- in the Month of October, 2016 and he has also received gift of Rs.15,00,000/- from his father as per the gift deed 31.03.2016. However, the AO has not agreed with the submission of the assessee and treated amount of Rs.31,50,000/- as unexplained cash credit u/s 68 of the Act.

3.

The assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assesse. 4. Heard both the sides and perused the material on record. Regarding addition of Rs.31,50,000/-on account of cash deposit in the bank account the ld. Counsel submitted that during the month of November the total cash sale of the assessee was Rs.10,30,210/- and assessee has also made withdrawal of cash amount from the bank account to the amount of Rs.28,00,000/- between 17.10.2016 to 26.10.2016 and the total sale of the assesse during the year was to the amount of Rs.375,88,390/-. We have perused the copy of bank P a g e | Mohammed Faraaz Dosani Vs. Income Tax Officer 20(2)(2) statement maintained by the assessee with the Union Bank of India and Kotak Bank and notice that between 01.10.2016 to 30.11.2016 there was cash withdrawal of Rs.28,00,000/- and cash deposit of Rs.31,50,000/- as per the detail given below:

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