The Ahmedabad bench of the Income Tax Appellate Tribunal deleted the addition made by AO under Section 69 of the Income Tax Act, 1961.
In this case, the assessee, Dipak Balubhai Patel, who is a Karta of Hindu Undivided Family (HUF), filed Income Tax Returns for the Assessment Year (AY), declaring a total income of Rs. 5,73,170/-. The assessee’s case was selected for scrutiny, and through a Show Cause Notice (SCN), he was asked to explain the source of Rs. 10,75,000/- deposited in the Bank of Baroda by the assessee.
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Although a reply was filed to the SCN, the Assessing Officer (AO) was dissatisfied with the submissions made by the assessee. THE AO rejected the book of accounts and made additions of Rs. 10,75,000/- by considering the money deposited to the bank as unexplained money under Section 69A of the Income Tax Act, 1961 and taxing the same under Section 115BBE of the Act.
The assessee, who was aggrieved by the above order, appealed before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) upheld the additions made by AO. Thus, the assessee approached the Income Tax Appellate Tribunal (ITAT) for relief.
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The counsel on behalf of the assessee, Pritesh Shah, contended that the additions made by the assessing officer are not applicable as the cash withdrawals and deposits are clearly recorded in the cash book, profit and loss account, and balance sheet of the assessee.
The bench observed that the appellant had recorded the details of cash details in the book of account and also the source of cash deposits during demonetisation period.
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The bench, comprising of Annapurna Gupta (Accountant Member) and T.R. Senthil Kumar (Judicial Member), viewed that the AO has erred in invoking provisions of Section 69A of the Income Tax Act and charging tax under Section 115BBE of the Act. The bench allowed the appeal filed by the assessee and directed to delete the additions made by AO.
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