Narendra Mohanlal Shah Vs. ITO Ward 42(1)(3), Range 431, Ward 42(1)(3), Kautilya Bhavan, Mumbai-400051

Parties Involved

Facts Summary

The assessee, Narendra Mohanlal Shah, filed his return of income for the assessment year 2017-18 declaring a total income of Rs. 3,69,260/-. His case was selected for scrutiny, and he was issued notices under sections 143(2) and 142(1) of the Income-tax Act. The Assessing Officer (AO) observed that the assessee deposited cash amounting to Rs. 5,79,000/- in his bank account during the demonetization period from 9/11/2016 to 13/12/2016. The assessee, who provides design consultancy services, submitted details of cash deposits and cash sales for the financial years 2014-15 to 2016-17. The AO disregarded the assessee's submissions and made an addition of Rs. 5,79,000/- under section 68 of the Act, which was upheld by the Commissioner of Income Tax (Appeals) (CIT(A)). Aggrieved by this, the assessee appealed to the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. Invalid Invocation of Section 68
• 2. Non-rejection of Books and Impermissible Selective Disbelief
• 3. Misapplication of Sections 68 and 69A
• 4. Perverse Reliance on Test of Human Probabilities

Judgment Outcome

Decided in favour of Assessee.

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