Reva Enterprises Vs ITO (ITAT Surat)
The Surat Bench of the Income Tax Appellate Tribunal adjudicated three connected appeals for Assessment Year 2017–18 relating to quantum addition and penalties. The assessee had not filed its return of income for the relevant year. Based on information received during investigation, the Assessing Officer found substantial cash deposits and other credits in the assessee’s Dena Bank account, including deposits during the demonetisation period. Despite repeated notices, summons, and opportunities, the assessee failed to explain the nature and source of these deposits or to furnish books of account or supporting evidence. Consequently, the assessment was completed on a best judgment basis, treating the aggregate amount of ₹82.92 lakh as unexplained money under section 69A.
The Commissioner (Appeals) confirmed the addition, rejecting the assessee’s claim that the partnership firm had been dissolved earlier and that the transactions belonged to a former partner acting as a sole proprietor. The appellate authority noted the absence of documentary proof such as closure of the firm’s bank account, opening of a new proprietary account, GST or other registrations, or evidence showing disclosure of income in the alleged successor’s return. The Tribunal upheld this finding, holding that mere dissolution claims and a bank certificate showing an authorised signatory were insufficient to establish that the firm was non-existent or that the deposits did not belong to it.
