Jogiram Hajariji Fulwaria vs. ACIT-27(1)

Parties Involved

Facts Summary

The appellant, Jogiram Hajariji Fulwaria, a footwear trader, did not file a Return of Income for the assessment year 2011-12. The Assessing Officer issued notices to the appellant to provide details and source of cash deposits made in his bank account to the extent of Rs. 31,54,950/-. The appellant did not respond to the notices, and the Assessing Officer added the cash deposits as unexplained cash credits under section 68 of the Income Tax Act. The appellant appealed to the Commissioner of Income-Tax (Appeals) and later to the Income Tax Appellate Tribunal (ITAT). The appellant argued that the cash deposits were from cash sales and the withdrawals were for purchases and expenses, and only the net effect should be treated as income. The ITAT was convinced that the Real Income Theory should be applied in this case and reduced the addition to Rs. 3,05,244/-. The appellant was directed to pay tax on the net income of Rs. 3,05,244/-. The appeal was partly allowed.…

Legal Issues

• 1. Whether the additions made by the Assessing Officer pertaining to the cash deposits should be deleted?
• 2. Whether the appellant should be allowed to amend, alter, vary or delete any of the grounds of appeal?

Judgment Outcome

Decided in favour of Assessee.

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