Bhaveshbharthi Ghanshyambharthi Goswami Vs ITO (ITAT Surat)
The Income Tax Appellate Tribunal, Surat, allowed the appeal filed by the assessee against the confirmation of an addition of ₹11,40,010 made under Section 68 of the Income-tax Act, 1961, for Assessment Year 2010–11. The addition arose from cash deposits made in the assessee’s savings bank account during the relevant financial year, which the Assessing Officer treated as unexplained cash credits after reopening the assessment under Section 148. The assessee, a student during the year, had not originally filed a return and later declared nominal income mainly from tuition activity.
The Tribunal noted that the assessee did not maintain any books of account and that the addition was made solely on the basis of bank statement entries. It was undisputed that the assessee was a student and that the deposits were explained as temporary funds provided by parents and close relatives for the limited purpose of demonstrating financial capacity for obtaining a student visa. The assessee furnished complete details of the depositors, their relationship, dates and amounts of deposits, and corresponding withdrawals showing that the amounts were repaid within a short period.
On examination of the material, the Tribunal found that the explanation offered by the assessee was plausible and supported by documentary details. The Revenue failed to bring any material on record to disprove the explanation or to establish that the deposits represented income of the assessee. The Tribunal further observed that, in the absence of books of account, a mere bank entry, when satisfactorily explained, could not automatically be treated as unexplained income under Section 68.
