Shernickraj Vs. The Income Tax Officer, Non-Corporate Ward 6(1), Chennai

Parties Involved

Facts Summary

The assessee, an individual, filed his return of income for the assessment year 2017-18 on 31.03.2018 admitting total income of Rs.3,14,610/-. The case was selected for scrutiny and a notice under section 143(2) of the Income Tax Act, 1961 was issued on 09.08.2018. During the assessment proceedings, it was noticed that the assessee had made cash deposits of Rs.8,50,000/-. The assessee explained that the cash deposits were amounts collected from his small business of accepting money from the public and making online transactions on their behalf, such as paying electricity bills and booking tickets. However, the Assessing Officer (AO) rejected these submissions and completed the assessment under section 143(3) of the Act, bringing the entire sum of Rs.8,50,000/- to tax under section 69 of the Act. The AO also applied a special rate of taxation under section 115BBE of the Act.…

Legal Issues

• 1. Whether the addition of Rs.4,25,000/- as unexplained income under section 69 of the Act is sustainable.
• 2. Whether the tax should be calculated at the rate of 30% instead of 60% under section 115BBE of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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