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Facts
The assessee's bank account showed cash deposits of Rs. 31,02,330/- which the Revenue treated as unexplained money under Section 69A of the Income Tax Act. The assessee, engaged in the business of namkeen and other small products, contended that these deposits were from regular trading business activities.
Held
The Tribunal found that the cash deposits were made throughout the year, reflecting the regular business of the assessee. Since the deposits were part of the regular trading business and were regularly transferred to suppliers/dealers, no addition for unexplained money was warranted.
Key Issues
Whether cash deposits in the assessee's bank account, claimed to be from regular business activities, constitute unexplained money under Section 69A of the Income Tax Act.
Sections Cited
69A, 115BBE
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Hardik Jagdishkumar Thakkar, Income Tax Officer, Vs. Shivaji Park Society, Ward-3, Dhanera, Palanpur. Banaksantha-385310. [PAN :AGYPT5046 R] (Appellant) .. (Respondent) Appellant by : Shri Jimi Patel, AR Respondent by: Shri B.P Makwana, Sr. DR Date of Hearing 17.07.2025 Date of Pronouncement 18 .07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 24.12.2024 passed by the Commissioner of Income Tax (Appeals) /National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeals:
1. Ld. CIT(A) erred in law and on facts in confirming addition of Rs. 31,02,330/- made u/s 69A of the Act being allege unexplained money without appreciating facts and law of the case properly.
Without prejudice to above, Ld. Assessing Officer erred in law and facts in taxing the income at special rate mentioned in Section 115BBE of the Act without appreciating that amendment made in Section 115BBE will Hardik J Thakkar Vs. ITO Asst. Year : 2017-18 - 2– be applicable from AY 2018-19 onwards and not applicable for AY 2017-18 which is assessment year under question. 3. The appellant craves leave to add, amend or alter the grounds of appeal
at the time of hearing, if need arise.
3. The addition of Rs.31,02,330/- has been made on account of the cash deposits found in the bank account of the assessee. The revenue alleged that the assessee could not prove the details of the sources of cash deposited in the bank account. It was brought to our notice that the assessee is in the business of namkeen and other small products on a retail as well as whole basis, and the assessee had produced bank statement reflecting the cash deposits from 01.04.2016 to 31.03.2017. There have been cash deposits in the bank account throughout the year, which reflects the regular business of the assessee. The cash deposits have been transferred to suppliers/dealers of namkeen and other products at regular intervals, as evident from the bank statement. Since, the cash deposits are out of the regular trading business of namkeen and other products, we hold no addition is called for on account of unexplained money.
In the result, the appeal filed by the assessee is allowed.