Mr. Gulab Singh vs. The ITO

Parties Involved

Facts Summary

Mr. Gulab Singh filed his return of income for the year under consideration manually on 24.09.2010 declaring total income of Rs. 1,65,610/-. The Assessing Officer received information that the assessee during the F.Y. 2009-10 relevant to AY. 2010-11 has made cash deposits of Rs. 86,01,236/- in his saving bank account maintained by him jointly with Sh. Jaspal Singh in ICICI Bank, Doraha. On the basis of this information, the Assessing Officer recorded the reason to believe that the income has escaped assessment and notice under section 148 of Act dated 29.03.2017 was issued and served upon the assessee on 30.03.2017. The Assessing Officer issued notice to the assessee under section 143(2) and 142(1) of the Act along with detailed questionnaire and asked him to explain the source of cash deposit of Rs.86,01,236/- in his saving bank account maintained with ICICI Bank, Doraha. The AO noted that the assessee has made cash deposits of Rs.86 lacs whereas the withdrawals are only to the extent of Rs.80 lacs and the assessee was asked to explain the difference in deposits and withdrawals. In response thereto, the AO noted that the learned AR of the assessee could not give any plausible reply and agreed for an addition of Rs.6,00,000/- subject to no penal action. However, the Assessing Officer was not satisfied with the conditional offer made by the assessee as in her opinion, the assessee had concealed particulars of income to the extent of Rs.6,00,000/-. So, the Assessing Officer mad…

Legal Issues

• 1. The impugned order of the Assessing Officer is bad in law and nature. Hence, it is liable to be quashed.
• 2. The Ld. AO wrongly added back Rs. 6,00,000/- on adhoc basis ignoring the opening balance of cash in hand as on 01/04/2009.

Judgment Outcome

Decided in favour of Assessee.

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