SHOBHA PRAKASH SHETTY,MUMBI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 25(1), MUMBAI, MUMBAI

Facts

The Assessing Officer (AO) added Rs. 29,15,468/- to the assessee's income under Section 68 of the Income Tax Act, considering it as unexplained cash credit. This addition was made after a survey revealed large cash deposits in the assessee's bank account during the demonetization period, which the AO found to be unsupported by the assessee's cash book and other documentation.

Held

The Tribunal held that the AO was not justified in rejecting the assessee's cash book as fabricated without specific defects. The Tribunal considered the nature of the business, the consistent auditing of accounts, and the lack of any other undisclosed income source, concluding that the cash deposits were likely business receipts.

Key Issues

Whether the addition of Rs. 29,15,468/- made by the AO under Section 68 of the Income Tax Act as unexplained cash credit is justified, considering the explanation provided by the assessee regarding cash deposits during the demonetization period.