Pravinkumar Ambalal Patel, Ahmedabad V. Income Tax Officer, Ward-4(2)(4), Ahmedabad

ITA 308/AHD/2022

AI Insights

The case involves Pravinkumar Ambalal Patel, the appellant, who contested the additions made to his income by the Income Tax Officer under Section 69A of the Income Tax Act, 1961, concerning unexplained cash deposits during the demonetisation period. The Assessing Officer had made these additions based on the scrutiny of cash deposits and discrepancies in the assessee's asset declarations. The CIT(A) upheld these additions, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal's decision partly favored the assessee, removing some of the contested additions while upholding others.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129361 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 12-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 09-08-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Depreciation
• Section: 142(1); 143(2); 69A

Judgement Text

ITA No.308/Ahd/2022 Assessment Year: 2017-18 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.308/Ahd/2022 Assessment Year: 2017-18 Pravinkumar Ambalal Patel, vs. Income Tax Officer, 100, Swami Akhand Anand Society, Ward 4(2)(4), Ahmedabad. Nilkanth Mahadev Road, Ghatlodia, Ahmedabad – 380 061. [PAN – AGEPP 1301 P] (Appellant) (Respondent) Assessee by : Shri Pritesh Shah, AR Revenue by : Shri Bholaram Devashi, Sr. DR Date of hearing : 13.04.2023 Date of pronouncement : 19.04.2023 O R D E R This appeal is filed by the Assessee against order dated 20.06.2022 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2017-18. 2. The Assessee has raised the following grounds of appeal :- “1. The Learned CIT(A) erred in confirming the addition of Rs.11,44,929/- made by Assessing Officer under Section 69A of the Income Tax Act, 1961 in respect of cash deposited to Bank, such addition is requested to be deleted.” 3. The assessee is having income from house property, income from share profit of firm and remuneration from partnership firm, income from other sources. Return of income declaring total income at Rs.1,98,360/-was filed on 18.10.2007. The case was selected for limited scrutiny on the issue of cash deposit during the demonetisation period. Notice under Section 143(2) of the Income Tax Act, 1961 was issued on 13.08.2018 and further notice under Section 142(1) was issued. The assessee filed its reply and details before the Assessing Officer. The Assessing Officer observed that the assessee sold one Motor Car on 01.04.2011 for Rs.2,63,375/-. The same was transferred in the name of the buyer on 01.04.2011 but as per the copy of Balance Sheet dated 31.03.2014 the same car for the same value has been shown as assessee’s asset on that date. The assessee claimed petrol expenses and ITA No.308/Ahd/2022 Assessment Year: 2017-18 Page 2 of 3 depreciation of the said vehicle. The assessee’s explanation that the cash was kept for five years and deposited during the demonetisation period was rejected by the Assessing Officer. Further, the Assessing Officer observed that the agricultural income for the relevant year was not established by the assessee with the sale bills , details of expenses and, therefore, the explanation of the assessee was rejected by the Assessing Officer. As regards to cash withdrawal from Bank account amounting to Rs.3,31,000/-, the Assessing Officer observed that the details furnished by the assessee was not establishing the case of the assessee and, therefore, in total the Assessing Officer made addition of Rs.11,44,929 as cash deposits treating the same as unexplained cash credit under Section 69A of the Act. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee has submitted the car sale documents, PAN details of car purchaser and RTO book transfer entry. The car was sold in the year 2011 but the amount was kept by the assessee and the same was deposited during the demonetisation period. The Ld. AR submitted that since the car was sold in cash and the assessee forgot to intimate the Accountant about such cash sale, the Accountant failed to enter such car sale in the books of accounts and, therefore, in Balance Sheet dated 31.03.2014 depreciation and expenses were claimed by the assessee. The Ld. AR further submitted that the assessee has not claimed any depreciation in the income tax return and simply entered it in Profit & Loss Account. As regards cash deposit related to agricultural income, the Ld. AR submitted that the assessee for A.Ys. 2015-16, 2014-15 & 2016-17 is regularly drawing agricultural income and the same was accepted by the Revenue in the past year. As regards cash withdrawal from the same bank and deposits made in the same bank, the details of which was filed by the assessee before the Assessing Officer, but the Assessing Officer totally ignored the contentions of the assessee. 6. The Ld. DR submitted that as regards the payment received from the car sale, the assessee’s contentions that the cash was kept by the assessee and the assessee forget to inform his Accountant was a mere after thought and, therefore, the same is not justifiable. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). ITA No.308/Ahd/2022 Assessment Year: 2017-18 Page 3 of 3 7. Heard both the parties and perused all the relevant material available on record. As regards the sale of car, the contention of the assessee that there was a miscommunication with assessee’s Accountant about car sale entry in the books of accounts does not have any stand as the same books was not entered into the year 2011 and the assessee deposited the amount after five years that is during the demonetisation period, this stand has not been established by the assessee through any evidence. Therefore, addition to the extent of Rs.2,63,375/- made by the Assessing Officer and confirmed by the CIT(A) is justifiable. As regards agricultural income and the cash deposit made in the bank from the amount of cash withdrawal from the same bank, both these aspects, the assessee has given all the details and established that the same has been duly verifiable from the previous year as well as from the bank accounts. Therefore, the addition to the extent of Rs.3,31,000/- and Rs.1,45,000/- does not sustain. 8. In the result, appeal of the assessee is partly allowed. Order pronounced in the open Court on this 19 th day of April, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 19 th day of April, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad