HETAAL JASWANTRAI PAREKH Vs. INCOME TAX OFFICER

Parties Involved

Facts Summary

The assessee is an individual. During the year under consideration, cash deposits were made in the bank account of the assessee during the demonetisation period. The Assessing Officer (AO) was not satisfied with the explanation furnished by the assessee regarding the source of such cash deposits and made an addition of Rs.32,15,383/- under section 69A of the Act treating the same as unexplained money. The assessee contended that the cash deposited in the bank account represented cash sales/business receipts which already formed part of the turnover offered to tax. It was thus contended that bringing the very same amount to tax once again under section 69A of the Act would result in taxation of the same receipts twice. The assessee further contended that the return of income was filed under the presumptive taxation scheme under section 44AD of the Act and that the authorities below failed to examine the cash deposits keeping in view the applicable CBDT Instructions/Circulars specifically issued for verification of cash deposits made during the demonetisation period.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in upholding the order of the Ld. A.O. wherein an addition of Rs.32,15,383/- was made on account of unexplained money u/s 69A of the Income Tax Act, 1961.
• 2. Whether the Ld. CIT(A) and the Ld. A.O. failed to appreciate the fact that the source of deposit is cash sales, which has already been offered to tax.
• 3. Whether the addition made u/s 69A of the Act is bad-in-law and should be deleted.
• 4. Whether the entire income is already offered to tax and taxing the deposit made out of the said revenue again will result into double taxation.
• 5. Whether the Ld. AO has failed to consider the CBDT Circulars to verify the demonetized cash deposited during the assessment year.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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