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Facts
The assessee, engaged in retail cloth trading, filed an income return under the presumptive scheme (Section 44AD). The AO noticed substantial credit card payments exceeding declared turnover and treated a portion of cash deposits as unexplained investment.
Held
The Tribunal held that Section 69 of the Income Tax Act applies only to unrecorded investments. Since the business transaction was routed through banking channels and recorded, the addition made by the AO was unjustified.
Key Issues
Whether the AO was justified in treating a sum deposited in cash as unexplained investment under Section 69 when the business transaction was routed through banking channels and recorded?
Sections Cited
44AD, 69, 143(3), 115BBE
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Income Tax Appellate Tribunal, HYDERABAD BENCHES “SM-A”, HYDERABAD
Before: SHRI VIJAY PAL RAO, HON’BLE & SHRI MADHUSUDAN SAWDIA, HON’BLE ACCOUNTANT
आदेशकी प्रतितिति अग्रेतिि/ Copy of the order forwarded to:-
1. 1. तिर्धारििी/The Assessee : Proddaturi Sanjay Kumar, 7-2-967 & 968, Station Road, Secunderabad – 500003, Telangana. 2. िधजस्व/ The Revenue : Income Tax Officer, Ward – 10(4), Hyderabad.