NAWAZ HUSAIN QURESHI,MUMBAI vs. ITO WARD 25(3)(1), MUMBAI

We have heard the rival submissions and perused the material available on record. The addition of Rs.16,13,000/- under section 69A of the Act arises out of cash deposits made in different bank accounts standing either in the assessee's own name or jointly with his wife and three sons. The assessee's consistent explanation is that cash aggregating to Rs.10,00,000/- was deposited by his wife and three sons out of their respective sources/past savings and did not belong to the assessee. In support thereof, the assessee has placed on record their notarized affidavits and respective bank-account details. The balance amount was explained as arising from the assessee's own small retail business.

The Ld. AR filed a paper book comprising pages 1 to 31 and another paper book comprising pages 1 to 14. We further find that the assessee was engaged in a small retail/roadside business of toys, electronic items and other goods. In the statement recorded by the Ld. AO, the assessee specifically explained the nature and manner of his business and computation of turnover. In pursuance of the notice u/s 148, the assessee filed the return by complying provision u/s 44AD of the Act and declared the net profit at the rate of 8% on the turn over. During the assessment proceedings, the Ld. AO initiated proceedings u/s 133(6) to assessee related to the deposit of cash in bank account. For clarity, the relevant Questions Nos. 10 to 12 and answers thereto, as recorded during the assessment proceedings, are reproduced below:

Thus, the statement recorded by the Ld. AO itself indicates that the assessee was carrying on a retail business involving daily cash sales and had declared business income on a presumptive basis with reference to turnover of Rs.30,00,000/-. The assessment record further records the assessee's explanation that the cash deposits in the accounts of his wife and sons were made by them from their own savings/business receipts, whereas the deposits in the assessee's own accounts were stated to be out of his business receipts and accumulated capital.

The Ld. DR argued and stands in favour of the revenue authorities.

Considering the entirety of the material placed on record, including the statement recorded during assessment proceedings, the nature of the assessee's retail business, the explanation regarding cash sales, and the affidavits and bank-account details of the family members, we find that the explanation regarding the source of the impugned cash deposits is supported by the material available on record. The mere fact that the assessee was a joint holder in the bank accounts of his wife and sons cannot, by itself, be sufficient to treat the entire deposits in such accounts as unexplained money belonging to the assessee, particularly when the respective family members have explained the deposits through their affidavits.

Accordingly, on the facts and circumstances of the present case, the addition of Rs.16,13,000/- made under section 69A of the Act cannot be sustained and is directed to be deleted. Consequently, the related grievance regarding application of section 115BBE becomes academic. The grounds raised by the assessee on merits are accordingly allowed.

In the result, the appeal of the assessee bearing ITA No. 4995/Mum/2026 is allowed. Order pronounced in the open court on 11th day of September 2026.