SNEHAAL JASWANTRAI PAREKH ,MUMBAI vs. INCOME TAX OFFICER -33(1)(9), MUMBAI

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ITA 4965/MUM/2024Status: DisposedITAT Mumbai20 February 2025AY 2017-18Bench: SMT. BEENA PILLAI ( (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the authorities below had not considered relevant CBDT Circulars. The AO is directed to verify the demonetised cash deposit considering the applicable circulars and the assessee is to furnish depositor details.

What were the facts?

The assessee, engaged in textiles and garments business, filed a return of income for AY 2017-18. During demonetisation, cash of Rs. 11 lakhs was deposited, which was added by the AO under Section 69A as unexplained money. The CIT(A) upheld this addition.

What were the issues?

Whether the addition of Rs. 11 lakhs as unexplained money on account of demonetised cash deposits, without considering relevant CBDT circulars, is justified, and if the assessee is required to maintain books of account under Section 44AD.

Which sections of the Income-tax Act were involved?

Section 69A,Section 44AD,Section 143(1),Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SMT. BEENA PILLAI

For Appellant: Shri. Mahaveer Jain a/w Shri
For Respondent: Shri. Sajit Nair, SR. D.R
Hearing: 12.02.2025Pronounced: 20.02.2025

Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 29/08/2024 passed by NFAC, Delhi, for assessment year 2017-18 on following grounds of appeal:

“1) That on the facts and circumstance of the case and in law, the Ld. CIT(A) erred in upholding the order of the Ld. A.O. wherein an A.Y. 2017-18 Snehaal Jaswantrai Parekh addition of Rs. 11,00,000 was made on account of unexplained money u/s 69A of the Income Tax Act, 1961. 2) That on the facts and circumstance of the case and in law, the Ld. CIT(A) and the Id. A.O. failed to appreciate the fact that the source of deposit is cash salęs, which has already been offered to tax. Therefore, the addition made u/s 69A of the Act is bad-in-law and should be deleted. 3) Without prejudice to the above, it is submitted that the entire income is already offered to tax. Therefore, if the deposit made out of the said revenue is taxed again, the same will result into double taxation which is not permissible as per the Act. 4) That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the Appellant has filed a return of income under presumptive scheme under section 44AD of the Act and therefore, the Appellant is not required to maintain any books of account. 5) That the appellant craves leaves to add, alter or delete all or any of the grounds of appeal.” Brief facts of the case are as under:

2.

The assessee is an individual and is submitted to be engaged in the business of selling textiles and garments as well as a derives income from salary, income from business or profession and income from other sources. She filed her usual return of income for the year under consideration on 01/12/2017 declaring total income of Rs.12,96,860/- which was processed under section 143(1) of the act.

3.

Subsequently the case was selected for scrutiny and other sea was served with notice under section 143(2) along with notice under section 142(1) calling upon the details. The course of the assessment proceedings was observed that had deposited cash of Rs.11lakhs during the demonetisation. In the old currency the Ld.AR meditation under section 69A by observing that assessing A.Y. 2017-18 Snehaal Jaswantrai Parekh did not provide any valid explanation in respect of the source of the cash deposited during the demonetisation.

4.

Aggrieved by the order of the Ld. AO assessee appealed before the Ld. CIT(A) the Ld. CIT(A) upheld observations of the Ld.AR and confirmed the addition made their in. Aggrieved by the order of the Ld. CIT(A) is the assessee is in appeal before this Tribunal. I have considered the submissions advanced by both sides in the light of the records placed before us.

5.

It is noted that the addition is based on the cash deposits made by the assessee during the demonetisation period that requires necessary verification. The authorities below has not considered the following CBDT Circulars. a) The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II.

6.

The assessing officer is directed to verify the demonetised cash deposited during the year under consideration based on the circular applicable to the assessee to the present facts. The assessee is directed to furnish the PAN and KYC details of all the depositors in order to assist the Ld.AO to consider the claim in accordance with law. Accordingly, the grounds raised by the assessee stands partly allowed for statistical purposes.

Order pronounced in the open court on 20/02/2025

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