NILOFAR JUNAID KHAN,MUMBAI vs. INCOME TAX OFFICER, WARD 24(3)(1), MUMBAI, MUMBAI

ITA 8342/MUM/2026Status: DisposedITAT Mumbai08 October 2026AY 2012-135 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that while the assessee's records were not complete and verifiable, the shortcomings did not justify treating the entire deposit amount as unexplained money under Section 69A. The Tribunal noted that the assessee had disclosed business income, provided accounts showing significant sales, and produced some purchase documents. The cash deposits were also lower than the disclosed sales. The authorities below had not presented material to prove the sales were fictitious or the deposits originated from a source entirely unrelated to the business. The Tribunal reasoned that the precise profit could not be verified due to evidentiary deficiencies, but this warranted a reasonable estimate of profit, not treating gross deposits as income. Applying an 8% profit rate to the disclosed sales of ₹18,84,250 yielded an estimated profit of ₹1,50,740, which exceeded the returned income of ₹1,90,000. Therefore, the addition of ₹13,72,700 was deleted. The issue regarding the ₹4,00,000 from the husband was not independently considered as the conclusion rested on the business receipts and returned income. The assessee's ground was allowed.

What were the facts?

The assessee, Nilofar Junaid Khan, appealed against an addition of ₹13,72,700 made by the Income Tax Officer under Section 69A for the assessment year not specified. The addition was for unexplained cash deposits in her bank account. The assessee claimed the deposits were from her retail fish business, supported by a trading and profit and loss account showing fish sales of ₹18,84,250 and some purchase cash memos. The Assessing Officer rejected this, citing insufficient evidence for stall rent, salary payments, and purchase documents. The explanation of receiving ₹4,00,000 in cash from her husband was also questioned. The CIT(A) sustained the addition, emphasizing the lack of independent corroboration for the business. The assessee's total income disclosed in the return was ₹1,90,000.

What were the issues?

1. Whether the Tribunal can sustain the addition of ₹13,72,700 as unexplained money under Section 69A of the Income-tax Act, 1961, despite the assessee disclosing business income and providing some supporting documents for her retail fish business. Assessee's contentions (not explicitly recorded but implied by the appeal): The assessee contended that the cash deposits were from her fish business and that the disclosed sales and some supporting documents were sufficient to explain the source. The use of a savings account for deposits from a retail business was also implicitly defended. Revenue's contentions: The Revenue, through the Assessing Officer and CIT(A), argued that the assessee failed to provide complete and verifiable records for her fish business, including independent corroboration like licenses or market records, complete purchase and sales records, and documentary evidence for claimed rent and salary payments. The explanation regarding cash received from the husband was also deemed unsatisfactory.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’

For Respondent: Ms. Jayshree Thakur, SR AR
Pronounced: 08/10/2026

PER AMIT SHUKLA (J.M): The assessee has challenged the addition of ₹13,72,700 made by the Assessing Officer under section 69A of the Income-tax Act, 1961, on account of cash deposits in her bank account. The assessee’s case was that she carried on a retail fish business and that the deposits represented cash receipts from that activity. The return for the year disclosed

2 Nilofar Junaid Khan total income of ₹1,90,000. In support of the business explanation, the assessee furnished a trading and profit and loss account showing fish sales of ₹18,84,250, along with certain purchase cash memos.

2.

During the reassessment proceedings, the Assessing Officer called upon the assessee to explain the source of the deposits and to substantia

The order continues below.

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