Lake View Filling Station, Warangal Vs. The Income Tax Officer, Ward – 1, Warangal

Parties Involved

Facts Summary

The assessee, engaged in the business of petrol pump, filed its return of income for the Assessment Year 2017-18 declaring total income of Rs.4,28,090/-. During scrutiny proceedings, it was noticed that the assessee maintained and operated an HDFC Bank Account linked to an individual's PAN, with cash deposits of Rs.28,26,000/- during the demonetization period. The assessee did not disclose this bank account and the cash deposits in its return of income. The Assessing Officer issued notices under sections 148 and 142(1) of the Income Tax Act, 1961, and assessed the cash deposit as unexplained cash credit. The assessee appealed to the Commissioner of Income Tax (Appeals), who dismissed the appeal. The assessee further appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the order of the Commissioner of Income Tax (Appeals) is erroneous and unsustainable in law?
• 2. Whether the addition made by the Assessing Officer of Rs.28,26,000/- as unexplained cash credit under section 68 of the Income Tax Act, 1961 is justified?
• 3. Whether the deposits in HDFC Bank for Rs.28,26,000/- considered while filing the return of income can be treated as unexplained cash credit under section 68 of the Act?

Judgment Outcome

Decided in favour of Assessee.

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