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Facts
The assessee appealed an order for AY 2010-11, initiated under Section 144, challenging an addition of Rs. 1,60,000/- (which was later not pressed) and the treatment of cash deposits of Rs. 14,65,900/- as unexplained under Section 68 of the Income Tax Act. The assessee, engaged in transport booking, argued that his business typically involves significant cash transactions, a fact acknowledged by the Assessing Officer in a remand report.
Held
The Tribunal, considering the nature of the assessee's transport booking business and the possibility of cash transactions, reduced the unexplained cash deposit addition. It restricted the addition to a lump sum of Rs. 2,00,000/-, providing a relief of Rs. 12,65,900/-. This estimation was explicitly stated to be based on the specific facts of the case and not for use as a precedent.
Key Issues
Correctness of treating cash deposits as unexplained income under Section 68 of the Income Tax Act, particularly in the context of a cash-intensive transport booking business.
Sections Cited
Section 144 of the Income Tax Act, 1961, Section 68 of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2010-11, arises against the order of Addl./JCIT(A)-1, Pune dated 15.02.2024 in DIN & order No. ITBA/APL/S/250/2023- 24/1060977372(1), in proceedings u/s 144 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Learned counsel submits at the outset that the assessee does not wish to press his corresponding substantive ground challenging notional income addition of Rs.1.60,000/- keeping in mind smallness thereof. Rejected accordingly.
Next comes the second substantive issue between the parties i.e. correctness of the learned authorities action treating his cash deposits of Rs.14,65,900/- as unexplained u/s 68 of Lokesh Verma the Act. It has come on record that the assessee is engaged in transport booking activities wherein possibility of majority of the transaction in cash only in such an unorganized sector could not be altogether ruled out. Learned counsel invites the bench’s attention to the Assessing Officer’s remand report as well wherein he has duly admitted the assessee’s said regular business. It is in these peculiar facts that the tribunal is of the considered view that a lump sum addition of Rs. 2,00,000/- only would be just and proper with a rider that the same would not be treated as a precedent. The assessee gets relief of Rs. 12,65,900/- in other words. Necessary computation shall follow as per law. It is made it clear before parting that the instant estimation is based on the peculiar facts of the case only.
This assessee’s appeal is partly allowed in above terms. Order Pronounced in the Open Court on 26/12/2024.