Murtuza Kutubbudin Khambati vs. ITO, Ward-14(2)(2)

Parties Involved

Facts Summary

The appellant, Murtuza Kutubbudin Khambati, was aggrieved by the penalty levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act for not explaining the source of cash deposits in his bank account to the extent of Rs. 31,50,001/-. The appellant, a small trader dealing in hardware tools, did not maintain books of account as his turnover was less than Rs. 40 lakhs. He filed a return of income admitting an income of Rs. 1,45,370/- and no books of account were maintained. The Income Tax Appellate Tribunal (ITAT) confirmed the addition made by the Assessing Officer and the penalty imposed by the Commissioner of Income Tax (Appeals), stating that there was no proof of any business done by the appellant. The appellant appealed to the ITAT, arguing that the penalty was not leviable due to the absence of books of accounts and the non-acceptance of his explanation by the Department.…

Legal Issues

• 1. Whether the penalty under section 271(1)(c) was leviable on the appellant for not explaining the source of cash deposits.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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