Himan Jayantbhai Parikh Vs ITO, AY- 2017-18

Parties Involved

Facts Summary

The assessee, Himan Jayantbhai Parikh, filed his return of income for the Assessment Year (A.Y.) 2017-18 on 30.10.2017 declaring total income of Rs. 10,91,980/-. The case was selected for complete scrutiny under CASS. The Assessing Officer (AO) noticed that the assessee had made a cash deposit of Rs. 37,94,450/- in his bank account during the demonetization period. The AO was not convinced about the explanation of the assessee regarding the source of the cash deposits. Therefore, the entire cash deposit of Rs. 37,63,000/-, as per bank statement, was treated as unexplained and added to income. Further, the assessee did not furnish any evidence in support of purchase, sales, expenses, etc. Therefore, the books of accounts of the assessee were rejected and the income was estimated by applying a net profit rate of 8%. The AO had reduced the cash deposits from the turnover and applied a profit rate of 8% on the balance turnover and accordingly, made an addition of Rs.1,41,59,920/-. In addition, the unsecured loan of Rs.40,81,000/- taken during the year was also treated as unexplained and added to income. The assessment was completed under section 143(3) of the Act on 20.12.2019 at total income of Rs. 2,30,95,900/-. The assessee filed an appeal before the first appellate authority, which was decided by the Ld. Commissioner of Income Tax (Appeals) vide the impugned order and the appeal of the assessee was dismissed.…

Legal Issues

• 1. The order passed by lower authorities is bad in law and required to be quashed.
• 2. Ld. NFAC erred in law and on facts in confirming addition of Rs. 37,63,000/-u/s 68 of the Act ignoring submission of the appellant.
• 3. Ld. NFAC erred in law and on facts in confirming Rs. 1,41,59,920/-ignoring submission of the appellant.
• 4. Ld. NFAC erred in law and on facts in confirming addition of Rs. 40,81,000/-for unsecured loan received u/s 68 of the Act.
• 5. Charging of Interest u/s 234A,234B,234C & 234D are unjustified.
• 6. Initiation of penalty proceedings u/s 270A & 271AAC are unjustified.

Judgment Outcome

Decided in favour of Assessee.

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