SHIVRATAN HAROBIND GUPTA,MUMBAI vs. ITO 23(3)(5), MUMBAI
Income Tax Appellate Tribunal, Mumbai “F” Bench, Mumbai.
Before: Shri Sandeep Gosain (JM) & Shri Omkareshwar Chidara (AM) Shivratan Hargobind Gupta 19/21, Krishna Kutir, Old Hanuman X Lane Mumbai-400 052. Vs. ITO 23(3)(5) Piramal Chambers Lalbaugh, Parel Mumbai-400 012. PAN : ADBPG0971G
Per Omkareshwar Chidara (AM) :-
In the above cited appeal, the Ld. AO made an addition of Rs. 55.85
lakh under section 144 of the Income Tax Act) (best judgement assessment) as the appellant could not explain the source of cash deposits in his bank accounts. The cash deposits were treated as unexplained income of appellant under section 69 of the Act while completing the assessment.
Aggrieved by the addition of Ld. AO, an appeal was filed before Ld. CIT(A) by the appellant. The Ld. CIT(A) has dismissed the appeal of the appellant basically due to two reasons :- i) The appellant’s claim is that he was doing cloth business and all cash deposits are out of sale of cloth, is not having any evidence and the cash deposits were treated as unexplained income. ii) Before Ld. AO, despite giving several opportunities, the appellant did not furnish the details of cash deposits and hence the Best Judgment Assessment under section 144 of the Act was upheld.
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3. Aggrieved by the orders of Ld. AO and Ld. CIT(A), an appeal was filed before ITAT with the following grounds of appeal :-
1. The assessing officer erred in assessing the income at Rs. 58,55,080/- u/s 144 of the Act while doing so the Assessing Officer has grossly erred in facts in treating the entire cash deposits of Rs 53, 89, 000 /- in Bank
Accounts as unexplained Income u/s 68 of the Act.
The Assessing Officer has erred in facts & law in not considering the material available on record and making the Best Judgment assessment u/s 144 without proper enquiries and confirmation.
The Assessing Officer has grossly erred in estimating the Income of the Appellant by not considering the Debits/Expenses in the Bank Account Statement.
The Assessing Officer has grossly erred in law initiating Penalty u/s 271AAC and Penalty u/s 270A(1) rws 270A(2)(b) simultaneously of the IT Act.
On the date of hearing, none was present for representing the appellant’s case nor there is an adjournment letter. The Ld. DR relied on the orders of lower authorities.
Heard the Ld. DR and perused the material on record. Since, there is no one on the date of hearing on behalf of the appellant, the grounds of appeal of appellant, assessment order and Ld. CIT(A) order are taken into consideration while disposing the appeal. After perusing the same, it is observed that Ld. CIT(A) has not properly adjudicated the issues like whether out of two bank accounts mentioned only one bank account with Akola Janta Commercial Cooperative Bank belongs to appellant or not. The appellant claims that only one account of Cooperative Bank belongs to him and another Bank account does not belong to him. Similarly, whether these bank account contains both deposits and withdrawals and whether only deposits are added etc., were not adjudicated by Ld. CIT(A). In view of the same, it is decided to remit the issue back to the file of Ld. CIT(A) with a direction to adjudicate all issues raised by appellant and pass a fresh order after giving an effective opportunity to appellant. The appellant is directed to furnish all evidences of purchase bills, sale bills etc. to prima facie establish
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that the cash deposits are out of sale proceeds of cloth business as claimed by appellant. It is a fact that under section 44AD of the Act, the appellant need not maintain regular books of account, but he is under obligation to explain the source of this cash deposits are out of doing the business. Then only, the claim under section 44AD would be accepted. With these directions, the issue is remitted to the file of Ld. CIT(A).
The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 28/11/2025. (SANDEEP GOSAIN)
ACCOUNTANT MEMBER
Copy of the Order forwarded to :
The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.
BY ORDER,
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