Abdul Jaleel Vs ITO (ITAT Bangalore)
Fruit Dealer Wins Juicy Relief: ITAT Squeezes Out Section 68 Addition -ITAT Bangalore Treats Entire Bank Deposits as Business Turnover—8% Profit Applied
Assessee, a 67-year-old small fruit dealer operating from his residence, had neither maintained books nor filed a return for AY 2015-16. The case was reopened u/s 147 after the Department noticed cash deposits of ₹1.59 crore in his bank accounts. During reassessment, Assessee filed a return declaring gross receipts of ₹92.80 lakh from fruit trading & net profit of ₹8.18 lakh, supported by an affidavit & confirmation letters from fruit merchants identifying him as a fruit dealer. The AO rejected these evidences for want of corroboration & treated the entire bank deposits of ₹1,29,16,984 (including cheque deposits of ₹25,99,984) as unexplained cash credits u/s 68. The AO also added savings bank interest of ₹76,297 & denied deduction u/s 80TTA. CIT(A)/NFAC confirmed the additions with observations that accepting cash was against RBI guidelines & that Assessee failed to justify deposits.
Before the Tribunal, Assessee produced the assessment order for AY 2016-17 wherein the same AO had accepted Assessee’s fruit business as genuine. Tribunal observed multiple factual inconsistencies in the AO’s approach, including his erroneous statement that ₹1,29,16,984 represented cash deposits, despite ₹25.99 lakh being cheque deposits, & CIT(A)’s irrelevant reliance on RBI restrictions, even though the case pertained to pre-demonetisation period. Tribunal found that Assessee had disclosed complete trading results, produced confirmations, & demonstrated a consistent business pattern accepted by the Department in the subsequent year.
