KIRANKUMAR AMRUTLAL SHAH ,BANASKANTHA vs. THE INCOMETAX OFFICER, WARD-4, PALANPUR

The grounds of appeal filed by the assessee are as under:

The assessee has not filed return of income for A.Y. 2017- 18. The AO observed that during the demonetization period the assessee has deposited cash amounting to Rs.10,09,000/- in Bank of Baroda, Thara Branch and The Pragati Co-Op Bank, Thara Branch. The case was selected for scrutiny and statutory notices were issued to the assessee. Notice u/s.133(6) of the Act were issued to Bank of Baroda, Thara Branch and The Pragati Co-Op Bank, Thara Branch on various dates. The Bank has furnished the detail in assessee’s case in the form of bank statement. The assessee filed the reply on 25.11.2019. The reply contained copies of return with balance sheet, ledger account and other copies. After going through the details, the AO made addition of Rs.10,09,000/- as unexplained money u/s.69A of the Act.

Being aggrieved by the assessment order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee.

The ld. AR submitted that despite admitting the fact that the assessee has furnished the details of VAT return, Income Tax Return, bank statement, cash deposit slip of present assessment (Kirankumar Amrutlal Shah vs. ITO) A.Y.– 2017-18 - 3 – year as well as income tax return of the earlier years. The AO as well as the CIT(A) has not taken cognizance of the same. The Ld. AR further submitted that in this year, the assessee could not file the income tax return as the assessee’s income was non-taxable. The Ld. AR also pointed out page no.7 of the CIT(A)’s order thereby stating that in earlier assessment year also. The assesse has made cash deposits of Rs.30,18,110/-.

The ld. DR relied upon the assessment order and the order of the Ld. CIT(A). The Ld. DR further submitted that in the particular year the assessee has not filed return of income.

Heard both the parties and perused the relevant materials available on record. The assessee is a Kariyana Trader and, thus, was dealing in cash regularly. The reason given by the assessee for not filing the return of income is categorically mentioned on page 2 of CIT(A)’s order where it is stated that the percentage of profit in consumer goods was very less in F.Y. 2016-17 (A.Y. 2017-18). Thus, on sales of Rs.48,31,861/-, his total income was Rs.2,33,612/- and, thus, not exceeded the limit liable for taxation. From the perusal of the submissions from Page 4 till 7 of the order of CIT(A), it can be seen that the assessee is regularly depositing the cash in his bank as the assessee receives cash on daily basis. This fact was not disputed either by the AO as well as CIT(A). The remand report also categorically mentions that the assessee furnished the details but as not pointed out as of further explanation is required from the assessee. The assessee has (Kirankumar Amrutlal Shah vs. ITO) A.Y.– 2017-18 - 4 – demonstrated before both the authorities related to cash deposits in his bank account and, therefore, the Ld. CIT(A) as well as the AO was not right in making the addition.

In the result, appeal of the assessee is allowed.