SEJAL KIRTIKANT KAPADIA,AHMEDABAD vs. THE INCOME TAX OFFICER, (HQ) (INTL. TAXN. & TP), AHMEDABAD

PER S. S. GODARA, JUDICIAL MEMBER

This assessee’s appeal for assessment year 2012-13 arises against the CIT(A)-13, Ahmedabad’s order dated 24.08.2015 in case no. CIT(A)- XIII/Ahd/105/2014-15, upholding Assessing Officer’s action making Section 68 addition of unexplained cash credits to the tune of Rs.8,47,880/- in assessment order dated 30.01.2015, in proceedings u/s. 143(3) of the Income Tax Act, 1961; in short “the Act”.

Heard both sides. Case file perused.

ITA No. 3000/Ahd/15 [M/s.Sejal Kirtikant Kapadia vs. ITO] A.Y. 2012-13 - 2 -

“5. The ld. A.R. of the appellant vide letter dtd.l9.-08-2015 made following submission is as under:

Vietnam is given at Annexure - ) There was adequate material submitted by the Appellant which was in the possession of the LD AO , but he simply assumed that the above amount reflected in the bank statement is on account of cash deposit and without any application of mind, made an addition of RS . 847880/- u/s 68 of the income Tax-Act. Further, the LD AO's observation on self declaration by the assessee for the amount of foreign currency on his arrival, - it may please be noted that there is requirement of declaration only if the amount of foreign currency in possession is more than USD 5000 or it's equivalent. From this it is evidently clear that the LD AO has not applied the correct fads before making his mind to make an addition u/s 68. Findings. I have perused the order of the AO and submissions made in this regard. The appellant has explained that a sum of rs 847880 was credited in his two bank accounts details of which are above in para 5.1 find that first credit entry is in axis bank is by Weizman forex limited and other 3 credit entries are in SBI and are narrated as ‘Clg’ entries. For all these 4 credit entries the appellant has not been able to produce necessary conformation from the forex dealer from whom the conversion was effected. I am of the view that merely by saying entries as a result of forex exchange conversion is not sufficient. Nature and source of credit entries have to be backed p by some documentary evidence which not furnished by the appellant. The ground raised by the appellant is thus dismissed.”

ITA No. 3000/Ahd/15 [M/s.Sejal Kirtikant Kapadia vs. ITO] A.Y. 2012-13 - 4 -

book in pages 21 to 30. It therefore transpires that the assessee has been making regular visits to his homeland from time to time as well as managing business affairs in Vietnam. His very significant plea raised before the CIT(A) that he never carried foreign currency of more than 5000 USD in such visits has nowhere been specifically rebutted or not even dealt with in course of the lower appellate proceedings. We thus observe that the assessee has encashed the above foreign currency in India without violating such currency conversion law in the above four instances with a recognized agent. We accordingly are of the opinion that he has successfully discharged his onus regarding the addition amount in question of Rs.8,47,880/-. The impugned addition is accordingly deleted.