Question 1

What are the key legal issues in Income Tax Officer, Ward 2(1) Vs. Mr. Bherulal Chunnilal Jain?

Accepted Answer

1. Whether the CIT(A) erred in holding that the entire credit entries cannot be added under section 68 of the Act merely by looking at the bank statement. 2. Whether the CIT(A) misinterpreted the AO's stand regarding the assessee's liability for commission income.

Question 2

What are the facts of Income Tax Officer, Ward 2(1) Vs. Mr. Bherulal Chunnilal Jain?

Accepted Answer

The assessee, Mr. Bherulal Chunnilal Jain, filed his return of income declaring total income at Rs.1,10,850/- for the Assessment Year 2009-10. The return was processed under section 143(1) of the Income Tax Act, 1961. Subsequently, the assessee filed a revised return declaring total income at Rs.1,62,560/-. The case was reopened under section 148 of the Act based on information that the assessee had received a sum of Rs.25,87,01,299/- in a bank account maintained by M/s. Navkar Trading Co., of which the assessee is the proprietor. The Assessing Officer (AO) passed an assessment order determining the total income at Rs.25,88,63,860/- after making an addition of Rs.25,87,01,299/- as unexplained cash credit under section 68 of the Act and initiated penalty proceedings under section 271(1)(c) of the Act. Aggrieved, the assessee appealed to the Commissioner of Income Tax (Appeals) (CIT(A)), who partly allowed the appeal by restricting the addition to Rs.12,93,507/- as commission income. The Revenue then appealed to the Income Tax Appellate Tribunal (ITAT).

Income Tax Officer, Ward 2(1) Vs. Mr. Bherulal Chunnilal Jain

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