Manojbhai Popatbhai Thakkar, Palanpur V. The ACIT, Circle , Palanpur Present Juridiction The Asstt. Commissioner of Income Tax, Gandhinagar Circle, Gandhinagar

ITA 75/AHD/2023

AI Insights

The case revolves around an appeal by Manojbhai Popatbhai Thakkar against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs. 18,95,000 as unexplained cash deposits under Section 68 of the Income Tax Act, 1961, during the assessment year 2017-18. The Assessing Officer had initially made this addition following the demonetization period, suspecting the source of the deposits. The Tribunal examined the detailed cash books and other financial records provided by the assessee, which demonstrated that the deposits were explained through regular business transactions and withdrawals. The Tribunal referenced decisions from the Gujarat High Court to support its findings, ultimately ruling in favor of the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299941 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 05-02-2023
• Other Referred Cases: CIT vs. Shailesh Rasiklal Mehta, CIT vs. Manoj Indravadan Chokshi
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . N o . 7 5 /A hd / 2 0 23 ( A s se ss m e nt Y e a r : 20 17- 18 ) Ma noj b ha i P op a t bh ai Th a k k a r 32 , N avj i v a n S o c ie t y, N e ar H a n u ma n T e k r i , Pa lan pu r - 38 50 0 1 V s.A C I T , C ir cl e Pa la np ur , Pr e se nt J ur is dic tio n A C I T , G a n d hin ag ar C ir c le ,Ga nd hi na ga r [ P A N N o. AC J P T1 6 16 N ] (Appellant) .. (Respondent) Appellant by : Shri Sanjay R Shah, A.R. Respondent by : Shri B. P. Makwana, Sr. D.R. D a t e of H ea r i ng 12.07.2023 D a t e of P r o no u n ce me nt 14.07.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre, (in short “NFAC”), Delhi on 09.12.2022 for A.Y. 2017-18. 2. The grounds of appeal raised by the assessee are as under: “1. The Learned Commissioner of Income Tax (Appeals) has erred in law and on facts of the case in confirming the addition on account of unexplained cash deposits treating it as unexplained money u/s 68 of the Income Tax Act, 1961 of Rs. 18,95,000/- and thereby taxing the same u/s. 115BBE of the Act. Your Appellant submits that it be so held now and prays to delete the addition of Rs. 18,95,000/- made u/s. 68 of the I.T. Act, 1961 by the learned Assessing Officer. 2. The Learned Commissioner of Income Tax (Appeals) erred in confirming the addition made by the Learned Assessing Officer in utter disregard of the submission made by the Appellant before him and on relying on case laws not germane to the issue. It is submitted that it be held now and addition of Rs. 18,95,000/- confirmed by The Learned Commissioner of Income Tax (Appeals) be deleted. ITA No. 75/Ahd/2023 Manojbhai Popatbhai Thakkar vs. ACIT Asst.Year–2017-18 - 2 - 3. Without prejudice to above, even if addition of Rs. 18,95,000/- is confirmed, the same cannot be added u/. 68 of the Act and hence cannot be taxed u/s. 115BBE of the Act. It is submitted that it be so held now. 4. Your Appellant reserves the right to add, alter, amend and/or withdraw any of the above Grounds of Appeal.” 3. The assessee has business income earned from partnership firms. The assessee filed its return of income for A.Y. 2017-18 on 05.03.2018 declaring total income of Rs. 14,04,610/-. The case was selected for limited scrutiny and notice under Section 143(2) was issued on 13.08.2018. The Assessing Officer observed that the assessee had deposited Rs. 18,95,000/- in his bank account during the demonetization period. The Assessing Officer after taking cognizance of the reply of the assessee made addition of Rs. 18,95,000/- under Section 68 as unexplained source of cash deposit. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 5. The Ld. A.R. submitted that the cash book at no point of time was disputed by the Assessing Officer and in fact, the assessee has given all the details related to the income of the assessee as well as the trial between the withdrawals from account as well as the deposit on various dates in the bank account. The Ld. A.R. further submitted that the Assessing Officer has also been given the details of earlier year wherein the amount deposited was in fact more than the year under consideration. The Ld. A.R. relied upon the decision of Hon’ble Gujarat High Court in case of CIT vs. Shailesh Rasiklal Mehta 176 taxman 270 and CIT vs. Manoj Indravadan Chokshi 50 taxman.com 419. ITA No. 75/Ahd/2023 Manojbhai Popatbhai Thakkar vs. ACIT Asst.Year–2017-18 - 3 - 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee is a partner in the firms has regularly withdrawing the amount from the bank for business purpose and to demonstrate the same as also the given details of the previous years. The assessee has also given the details of his income and the deposits made in the bank account prior to demonetization period as well as after the demonetization period. The trial was in fact identified by the assessee and has been presented before the Assessing Officer as well. The finding of the Assessing Officer that cash deposits made by the assessee have not been supported by documents appears to be incorrect as the assessee has given cash books details and showing its opening as well as closing balance which tally from the earlier years as well as month wise in respect of withdrawals as well as deposits. Therefore, the deposits made by the assessee cannot be termed as unexplained cash deposits under Section 68 of the Act. The CIT(A) as well as the Assessing Officer was not right in making the addition under Section 68 of the Act. 8. In result, appeal of the assessee is allowed. This Order pronounced in Open Court on 14/07/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 14/07/2023 TANMAY, Sr. PS TRUE COPY ITA No. 75/Ahd/2023 Manojbhai Popatbhai Thakkar vs. ACIT Asst.Year–2017-18 - 4 - आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 12.07.2023 2. Date on which the type draft is placed before the Dictating Member 12.07.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S .07.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .07.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 14.07.2023 7. Date on which the file goes to the Bench Clerk 14.07.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................