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Facts
The assessee's appeal for AY 2017-18 arose from an order confirming an assessment made on a best judgment basis. The Assessing Officer (AO) added cash deposits of Rs. 10.26 Lacs and other credits of Rs. 2.93 Lacs as unexplained income under Section 69A r.w.s. 115BBE of the Act. The assessee claimed these deposits were from sales turnover and a loan of Rs. 8.16 Lacs utilized in their jewellery job work business.
Held
The Tribunal noted that the assessee, a small artisan, was not required to maintain elaborate books. The loan of Rs. 8.16 Lacs was admittedly utilized in business, and the assessee had no other source of income. Therefore, the deposits were considered business receipts. The return filed on technical grounds was directed to be accepted, and the addition was deleted.
Key Issues
Whether cash deposits during the demonetization period can be treated as unexplained income when the assessee claims they are from business receipts and a loan utilized in business.
Sections Cited
69A, 115BBE, 139, 144
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Income Tax Appellate Tribunal, “SMC” BENCH, AGRA
Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 13-05-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s. 144 of the Act on 06-11-2019. The registry has noted delay of 38 days in the appeal which stand condoned.
In the assessment order, Ld. AO noted that the assessee deposited cash of Rs.10.26 Lacs in its bank accounts during demonetization period. There were other credits of Rs.2.93 Lacs during remaining period. Both these amounts were added as unexplained money u/s 69A r.w.s.
115BBE. The assessee failed to make any representation during assessment proceedings.
During appellate proceedings, the assessee submitted that it was a small artisan and engaged in making / selling silver ornaments. The source of deposits was sales turnover and loan taken for Rs.8.16 Lacs from Aryavart Bank, Firozabad. The assessee’s submissions were subjected to remand proceedings wherein Ld. AO still rejected the claim of the assessee. It also transpired that the assessee filed return of income on 02-11-2018 after due date u/s 139 which was treated as invalid return for want of verification. The Ld. CIT(A), after due consideration, observed that the loan was obtained on 12-04-2016. Subsequently, the assessee withdrew Rs.8 Lacs during 12-04-2016 to 16-04-2016. The withdrawals were utilized in the jewellery job work business which could not be available for re-deposit during demonetization period. The assessee failed to furnish requisite documents to explain the source of deposit. Finally, the assessment was confirmed against which the assessee is in further appeal before us.
From the case records, it emerges that the assessee carries out jewellery job work and considering its receipts, it is not required to maintain any elaborate books of accounts / documents. The assessee has obtained loan of Rs.8.16 Lacs which has been withdrawn and admittedly utilized in business. The assessee does not have any other source of income. Therefore, the only conclusion would be that the deposits in the bank accounts were nothing but business receipts. We find that the assessee has computed its total income and filed return of income on 02-11-2018 which is rejected on technical ground for want of verification. Considering the facts of the case, we direct Ld. AO to accept this returned income. The impugned addition of Rs.13.19 Lacs stand deleted.
The appeal stand allowed in terms of our above order. Order pronounced on 12th February, 2025.