ANKIT SHANTILAL JAIN,MUMBAI V. CIT(52), MUMBAI

ITA 3391/MUM/2024

AI Insights

The case involves Ankit Shantilal Jain, the proprietor of M/s Pratham Enterprises, who appealed against the order of the CIT(A) confirming the addition of Rs.66,45,000 as unexplained cash credit for the Assessment Year 2017-18. The AO had initially assessed this amount as unexplained cash credit after the assessee failed to respond to a notice regarding the details of cash deposits during the demonetization period. The CIT(A) upheld the AO's decision, citing insufficient documentation from the assessee. The Tribunal found that the CIT(A) had not adequately examined the explanations and documents provided by the assessee and thus restored the issue to the AO for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31969 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: UMESH CHANDRA SINHA
• Assessee Lawyers: RAMESHCHANDRA JAIN
• Keywords: Set aside; Unexplained cash credit
• Section: 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE JUSTICE (RETD.) SHRI C.V. BHADANG, PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA No. 3391/Mum/2024 Assessment Year : 2017-18 Ankit Shantilal Jain, No. 7, Sunder Niwas, Tilak Mandir Road, Vile Parle East, Mumbai PAN : AYTPJ0188P vs. ITO, Ward-25(2)(1), Mumbai (Appellant) (Respondent) For Assessee : Shri Rameshchandra Jain For Revenue : Shri Umesh Chandra Sinha, Sr.DR Date of Hearing : 24-02-2025 Date of Pronouncement : 10-03-2025 O R D E R PER B.R. BASKARAN, A.M : The assessee has filed this appeal challenging the order dated 09-05-2024 passed by the Ld CIT(A)-52, Mumbai and it relates to the Assessment Year (AY.) 2017-18. The only issue urged in this appeal relates to the assessment of Rs.66,45,000/- relating cash deposits made into the bank account as unexplained cash credit in the hands of the assessee. 2 ITA No. 3391/Mum/2024 2. The facts relating to the issue are stated in brief. The assessee is the proprietor of M/s Pratham Enterprises, which is engaged in the business of trading in gold bars and gold ornaments. He filed his return of income for the year under consideration declaring a total income of Rs.6,34,640/-. During the course of assessment proceedings, the AO issued a notice u/s 142(1) of the Act calling for details of cash deposit made by him in his bank account. However, the assessee did not respond to the same. Hence, the AO collected the copy of bank account of the assessee from IndusInd Bank. On analysis of the bank account, the AO noticed that the assessee has deposited cash aggregating to Rs.66,45,000/- during demonetization period. The assessee did not furnish any details relating to cash deposits except the copies of financial statements. Hence, the AO assessed the above said amount as unexplained cash credit in the hands of the assessee in the order passed to the best of his judgement u/s 144 of the Act. 3. Before the Ld CIT(A), the assessee submitted that the cash has been generated out of cash sales made by him and the deposits into the bank account have been made out of the cash balance available in the books of account. In support of the submission, the assessee furnished copies of financial statements, Return of income, Tax audit report, copy of Sales ledger and also copy of cash ledger account. The Ld CIT(A) noticed that the assessee did not furnish purchase register, stock register, purchase bills, sales bills, VAT return, sources of cash deposit etc. He further noticed certain discrepancies in the copy of cash book furnished by the assessee. Accordingly, he disbelieved the documents furnished by the assessee and accordingly confirmed the addition made by the AO. 3 ITA No. 3391/Mum/2024 4. We heard the parties and perused the record. We notice that the assessee did not furnish necessary details before the AO, but furnished some details before the Ld CIT(A), but the Ld CIT(A) has refused to accept the same, as he was of the view that those documents are not reliable. However, we notice that the assessee was having stock of gold, made sales and the said sales have been reported to the VAT authorities. It is the claim of the assessee that the cash has been generated out of the cash sales made by him, which is supported by the books of accounts and the VAT returns filed by the assessee before the sales tax authorities. It is submitted that the cash so generated has been deposited into the bank account of the assessee. We notice that the Ld CIT(A) has noticed negative cash balance on certain dates and also other deficiencies. When such things are noted, it is necessary to call for explanations from the assessee and it is not proper for the Ld CIT(A) to reject the documents without calling for explanations and also without confronting them with the AO. 5. We thus notice that the claim of the assessee that the impugned cash deposits have been made out of cash balance available in the books of accounts have not been properly examined by the tax authorities. If the explanation of the assessee that the cash has been generated out of cash sales and accounted in the books of accounts is found to be correct, then the sources of the impugned said deposits would stand explained and accordingly no addition is called for. Since the books of accounts of the assessee and the explanations given by the assessee require proper examination, we feel it proper to restore this issue to the file of the AO for examining it afresh. Accordingly, we set aside the order passed by the Ld CIT(A) and restore the same to the file of the AO for examining it afresh in the light of discussions made supra. We also direct the assessee to fully 4 ITA No. 3391/Mum/2024 co-operate with the AO for expeditious completion of the restored proceedings. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 10-03-2025 Sd/- Sd/- (JUSTICE (RETD.) C.V. BHADANG) PRESIDENT (B.R. BASKARAN) ACCOUNTANT MEMBER Mumbai, Date: 10-03-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "