Smt. Navjot Kaur Vs ITO (ITAT Amritsar)
Presumptive Taxpayer Gets Relief: Entire Cash Deposits Can’t Be Treated as Unexplained – Lump Sum Addition Sustained
Amritsar ITAT granted substantial relief to a small business Assessee by holding that entire cash deposits cannot automatically be taxed as unexplained u/s 69/69A when income is declared on presumptive basis u/s 44AD.
The Assessee, running a sweet shop-cum-restaurant, had deposited ₹23.79 lakh in her savings bank account. AO, in best-judgment reassessment u/s 144 r.w.s. 147, treated the entire deposits as unexplained, which was confirmed by NFAC-CIT(A).
Before ITAT, Assessee contended that income was declared on presumptive basis @8% u/s 44AD and relied on CIT vs. Surinder Pal Anand (P&H HC) to argue that once presumptive taxation applies, individual cash deposits need not be separately explained if linked to business receipts.
ITAT observed that while all deposits could not be blindly treated as business receipts—considering facts such as purchase of FDRs and low declared income—addition of the entire amount was unjustified. Balancing facts, Tribunal restricted the addition to a lump sum of ₹3 lakh and deleted the balance addition, directing AO to recompute income accordingly.
Thus, the appeal was partly allowed, reaffirming that presumptive taxation provides protection against mechanical additions, though reasonable estimation is permissible where facts so warrant.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 25-08-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 144 r.w.s. 147 of the Act on 09-12-2019. The sole grievance of the assessee is confirmation of addition of Rs.23.79 Lacs u/s 69 / 69A. The Ld. AR advanced arguments with supporting case laws. The Ld. Sr. DR also advanced arguments and filed written submissions. Having heard rival submissions and upon perusal of case record, the appeal is disposed off as under.
