Talshibhai Vashrambhai Vithani vs. The ITO, Ward – 2(3)(6), Surat

Parties Involved

Facts Summary

The assessee filed his return of income on 29.03.2018 for AY.2017, declaring total income of Rs.2,57,510/-. The case was selected for scrutiny assessment under CASS. Various notices were issued to the assessee u/s 143(2), 142(1) and 142(1) r.w.s. 129 of the Act. The assessee was engaged in the business of diamonds trading and commission. The assessee has declared business income u/s 44AD of the Act. The assessee has also disclosed capital gain and income from other sources. The AO observed that assessee has deposited cash of Rs.17,52,000/- in his bank account. He had shown cash in hand of Rs.3,08,454/- for AY.2016-17. The AO issued a show cause notice on 25.11.2019 and asked the assessee to furnish explanation/details regarding the source of cash deposits. The assessee in reply stated that he had deposited Rs.9,56,000/- in cash and Rs.7,96,000/- was deposited by his wife Smt. Gitaben Talshibhai Vithani. The AO has not accepted the explanation of the assessee and has allowed only the cash in hand of Rs.3,08,454/- and added the balance sum of Rs.14,43,546/- u/s 69A of the Act and taxed it u/s 115BBE of the Act. The assessee filed appeal before CIT(A) against the order of AO. The CIT(A) condoned the delay in filing the appeal. He received reply of the assessee which has been reproduced in para 4 at pages 3 to 6 of the appellate order. The assessee reiterated the submission made before the AO and submitted that the cash deposit includes Rs.7,96,000/- of the spouse and submitted t…

Legal Issues

• 1. The learned AO and CIT(A) have erred in law and on facts and in circumstances of the case by confirming the addition of Rs.7,96,000/- though the same is not deposited in bank account of the appellant but are deposited in bank account of the wife of the appellant.
• 2. The learned CIT(A) has erred in law and on facts and in circumstances of the case by confirming the addition of Rs.14,43,546/- under section 69A r.w.s. 115BBE of the Act on account of unexplained money without appreciating the fact that the appellant has fully explained source of cash deposit made of Rs.9,56,000/- into bank account of the appellant before both the lower authorities during the course of proceedings.

Judgment Outcome

Decided in favour of Assessee.

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