PR & Co. vs. The Income Tax Officer, Ward-2(1), Erode

Parties Involved

Facts Summary

The assessee, PR & Co., a partnership firm engaged in the wholesale and retail trading of rice, filed its return of income for Assessment Year 2017-18 declaring a total income of Rs. 57,560/-. The case was selected for scrutiny, and the Assessing Officer (AO) noticed large cash deposits, including deposits in specified bank notes (SBN) during the demonetization period. The AO required the assessee to explain the source of these deposits, particularly Rs. 19,56,978/- in SBN. The assessee claimed that the SBN was received as collections from sundry debtors. However, the AO did not accept this explanation and treated the amount as unexplained cash credit under section 68 of the Income Tax Act, 1961. The assessee appealed to the Commissioner of Income Tax (Appeals)/Additional Commissioner of Income Tax (Appeals) (FAA), which confirmed the addition. The assessee then appealed to the Tribunal.…

Legal Issues

• 1. Whether the Impugned Order is bad, erroneous and unsustainable in law.
• 2. Whether the First Appellate Authority erred in not considering the submissions, explanations and evidences during the assessment in proper perspective.
• 3. Whether the First Appellate Authority erred in making the impugned addition under section 68, without rejecting the books of account and the trade results.
• 4. Whether the First Appellate Authority erred in not considering the past history of the appellant.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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