Taxpayer Must Disclose Cash-in-Hand, Bank Balances, and Receivables Even Under Presumptive Taxation Scheme: ITAT [Read Order]
ITAT rules that taxpayers must disclose cash-in-hand, bank balances, and receivables even under the Presumptive Taxation Scheme, rejecting claims of inadvertent omissions.
![Taxpayer Must Disclose Cash-in-Hand, Bank Balances, and Receivables Even Under Presumptive Taxation Scheme: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/02/Cash-in-Hand.jpg "Taxpayer Must Disclose Cash-in-Hand, Bank Balances, and Receivables Even Under Presumptive Taxation Scheme: ITAT [Read Order]")
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) ruled that a taxpayer must disclose cash-in-hand, bank balances, and receivables even under the Presumptive Taxation Scheme, rejecting the argument that non-disclosure was an inadvertent error and emphasizing the necessity of proper financial reporting. The case involved Kamalesh Kantilal Patel, assessee, an individual engaged in...
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) ruled that a taxpayer must disclose cash-in-hand, bank balances, and receivables even under the Presumptive Taxation Scheme, rejecting the argument that non-disclosure was an inadvertent error and emphasizing the necessity of proper financial reporting.
The case involved Kamalesh Kantilal Patel, assessee, an individual engaged in the construction business, and a partner in Sai Samarth Plaza. The dispute arose when the Assessing Officer (AO) questioned cash deposits of Rs. 11,51,000 made during the demonetization period in The Palus Sahakari Bank Ltd.
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The AO rejected the explanation provided by the assessee, stating that his Income Tax Return (ITR) for A.Y. 2016-17 did not reflect any cash-in-hand or sundry debtors, contradicting his claim that the deposits came from refunds and receivables. The AO invoked Section 69A and applied the tax rate under Section 115BBE of the Income-tax Act, 1961.
On appeal before the National Faceless Appeal Centre (NFAC), the assessee submitted a list of 17 parties from whom Rs. 7,00,000 was received as refunds of advances, along with notarized affidavits, identity proofs, and, Rs. 1,36,500 was claimed as withdrawals from his partnership firm, and Rs. 3,14,500 as recovery of receivables.
The NFAC dismissed the appeal, stating that the absence of sundry debtors and cash-in-hand in the ITR made the claim unverifiable, and the affidavits lacked supporting PAN and ITR details. Upon further appeal, the ITAT Bench comprising Dr. Manish Borad (Accountant Member) examined the submissions.
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The tribunal accepted Rs. 1,36,500 withdrawn from the partnership firm since sufficient evidence was provided. The tribunal also accepted Rs. 7,00,000 received as refund of advances, noting that the tax authorities failed to cross-verify the claims under Section 131. The tribunal disallowed Rs. 3,14,500 from the recovery of receivables, citing the lack of any disclosure in the prior year’s ITR and insufficient supporting documentation. The tribunal held that even under the Presumptive Taxation Scheme, taxpayers must accurately disclose their cash holdings, bank balances, and receivables. The appeal was partially allowed.
To Read the full text of the Order CLICK HERE
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