Niravbhai Kirit Shah vs. The ITO

Parties Involved

Facts Summary

The assessee, Niravbhai Kirit Shah, filed his return of income on 30.03.2012, declaring a total income of Rs.6,12,955/-. The case was reopened after recording reasons and getting prior approval from the competent authority. Notice under section 148 of the Income-tax Act was issued on 27.03.2017. The assessee did not respond to the notice. The Assessing Officer found that the assessee had deposited cash of Rs.51,15,000/- and Rs.71,79,000/- in his bank accounts. The assessee explained that the cash deposited in the bank account was out of opening balance, business receipts, agricultural income, advance receipt against sale of shops, advances returned, and cash withdrawal from respective banks. The explanation was not accepted. Hence, a show-cause notice was issued asking the assessee as to why the deposits of Rs.1,22,94,000/- should not be treated as unexplained money under section 69 of the Act. The assessee filed a reply on 18.12.2017. The Assessing Officer concluded that the assessee failed to explain the source of the cash deposited in the bank accounts with supporting documentary evidence. The AO added Rs.1,22,94,000/- to the total income of the assessee under section 69A of the Act. The AO also added agricultural income of Rs.3,10,700/- because the assessee could not produce the contractors who had given cash for harvesting of agricultural produce on the 7 acres of land at village Dehari and Gobara.…

Legal Issues

• 1. Validity of reopening under section 147 of the Act by issuing notice under section 148 of the Act.
• 2. Addition of Rs.1,16,14,000/- being cash deposited by assessee in his bank accounts.
• 3. Treatment of agricultural income of Rs.3,10,700/- as income from other sources.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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