Durga Trading Co. Vs. ITO, Ward-2(1)(2), Ghaziabad

Parties Involved

Facts Summary

The assessee, Durga Trading Co., a partnership firm, was constituted on 01.06.2014 to take over the business running under the same name as a proprietary concern of Mr. Nitin Gupta. The firm opened a current account with HDFC Bank but never carried out any business. The account was used by Mr. Nitin Gupta for his proprietary business. During the demonetization period, a cash deposit of Rs. 74,71,500/- was made in this account, which the Assessing Officer (AO) treated as unexplained money under section 69 of the Income-tax Act, 1961. The assessee provided various documents, including audited financial statements, cash books, VAT returns, and an affidavit, to explain the source of the cash deposits. Despite these explanations, the AO made the addition, which was upheld by the National Faceless Appeal Centre (NFAC). The assessee appealed against this order.…

Legal Issues

• 1. Whether the order of the lower authority is bad in law and against the facts and circumstances of the case.
• 2. Whether the addition of Rs. 74,71,500/- as cash deposits during demonetization is justified.
• 3. Whether the addition amounts to double taxation.
• 4. Whether the AO erred in making the addition despite verifying the cash deposits.

Judgment Outcome

Decided in favour of Assessee.

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