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Facts
The assessee, engaged in trading and handling of IOC Gas Cylinders, deposited Rs. 47,79,600/- in cash into her bank account during the assessment year 2011-12. She claimed these deposits were from the sale of gas cylinders to customers.
Held
The Tribunal noted that the assessee claimed the deposits were from legitimate business activities. The Assessing Officer was directed to obtain detailed information regarding cash received from customers and payments made to IOC, and then compute the profit.
Key Issues
Whether the addition of cash deposits confirmed by the CIT(A) is justified without considering the explanation of genuine business sources and peak credit balance.
Sections Cited
69, 250
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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: DR.BRR KUMARSHRI T.R SENTHIL KUMAR
(Assessment Year:2011-12 Neha Modi, Vs. The Income Tax Officer, 19, Murlidharg Vaherao, Ward-1(3)(1), Makerivad Raipur, (Predecessor Ahmedabad-380001. ITO, Ward-1(3)(4) Ahmedabad. [PAN No.BBDPM3672D] (Appellant) .. (Respondent) Appellant by : Adjournment Application Filed Respondent by: Shri B P Srivastav, Sr. DR 03.02.2025 Date of Hearing Date of Pronouncement 04.02.2025 O R D E R PER: T R SENTHIL KUMAR, JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre, Delhi for the Assessment Year 2011-12.
The Assessee has taken the following grounds of appeal:-
1. The Lrd. CIT(A) has erred both in law and in fact by confirming the addition of Rs. 47,79,600/- without due consideration and understanding of the circumstances of the case. Despite the Appellant's clear explanation regarding the nature of her business and the legitimate sources of the cash deposits into the bank account, the addition was unjustly upheld. Therefore, it is imperative that the addition required to be deleted.
2. The Lrd. CIT(A) has erred in law and on fact that the Appellant's claim and explained of source of cash deposit into the bank account are out of genuine Asst.Year 2011-12 - 2– transactions has been rejected on account of absence of any evidence and confirmed the addition of Rs. 47,79,600/- under section 69 of Income tax Act.
3. The Lrd. CIT(A) has committed errors both in law and in fact by affirming the addition of Rs. 47,79,600/- under the assumption that the Appellant's cash deposits originated solely from undisclosed income, without considering the possibility of legitimate business activities. The Lrd. CIT(A) has arbitrarily dismissed the plea for considering the peak balance amount, a crucial aspect while rendering the Appellate order under section 250 of the Income Tax Act. It is a settled principle of law to give the benefit of peak credit when withdrawals and cash deposits are reflected in the bank account for the entire year.
4. The Lrd. CIT(A) has erred both in law and in fact by failing to evaluate the merits of the case and by disregarding the arguments presented by the appellant. Additionally, the order lacks a thorough analysis and fails to provide adequate reasoning, thereby falling short of the standards expected of a speaking order.
5. The learned CIT(A) has erred both in law and in fact while passing the Appellate order under section 250 of the Income Tax Act. The appellant has requested a copy of the reasons recorded for reopening by the Lrd. AO during the Appellate Proceeding. However, the Lrd. AO was not directed to provide the same until the pronouncement of the order by the Lrd. CIT(A).
The Appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal
at the time of or before the hearing of the Appeal.
3. The assessee is in the business of trading, loading and unloading of IOC Gas Cylinders. During the year under consideration the assessee has made cash deposit of Rs. 47,79,600/- The assessee submitted that the cash deposits have been made in the bank account right from April to March which pertains to the sale of gas cylinders to its customers. The assessee also submitted that the said cash received has been made to IOC for purchase of fresh gas cylinder. Therefore, the assessee submitted that if at all addition has to be made Peak Credit Balance has to be considered for making addition of the cash deposits.
Since the source of cash deposits is said to be sale of gas cylinders to its customers, the Assessing Officer is hereby directed to obtain detailed information related to cash received from the customers and also amount paid to the IOC for purchase of fresh gas cylinder, examine loading and unloading charges and then to compute the profit.
In the result, the appeal of the assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 04.02.2025
Sd/- Sd/- (DR. BRR KUMAR) (T.R SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER (True Copy) Ahmedabad; Dated 04.02.2025 Manish, Sr. PS TRUE COPY आदेश क� �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,