Furnish Home Vs ITO (ITAT Ahmedabad)
Entire Section 68/69 Additions Deleted; Cash Sales & Bank Withdrawals Accepted—ITAT Ahmedabad Allows Assessee’s Appeal, Dismisses Revenue (AY 2017-18)
The Ahmedabad ‘A’ Bench of the Income Tax Appellate Tribunal, Ahmedabad Bench allowed the assessee’s appeal and dismissed the Revenue’s cross-appeal in the case of Furnish Home (partnership firm) for AY 2017-18, granting complete relief on all additions made by the Assessing Officer.
The AO had made aggregate additions of ₹1.20 crore, comprising:
- Cash deposits u/s 68 – ₹26.96 lakh
- Cheque credits u/s 68 – ₹51.00 lakh
- Import payments & customs duty u/s 69 – ₹42.36 lakh
and also denied set-off of returned business loss of ₹2.01 lakh.
The CIT(A) had partly allowed the appeal by deleting most additions but confirmed ₹6.96 lakh out of cash deposits. Both sides were in appeal.
The ITAT held that:
- Cash deposits were fully explained through audited books, VAT-backed cash sales, and a bank certificate confirming self-cash withdrawals. Once books were accepted and not rejected u/s 145, partial or ad-hoc confirmation was impermissible. Entire addition of ₹26.96 lakh deleted.
- Cheque credits (partner capital, customer receipts, refund of advances) were duly supported by PAN, ITRs, confirmations, ledgers and bank trail. In absence of any rebuttal or enquiry by the AO, deletion by CIT(A) was upheld.
- Import payments and customs duty were fully recorded in books and supported by bills of entry, invoices, bank remittances and stock records; hence section 69 had no application.
- Business loss of ₹2.01 lakh was genuine and book-supported; while carry forward was barred u/s 80, the loss had to be allowed in computing income for the year.
Accordingly, the Tribunal deleted the residual addition of ₹6.96 lakh, upheld deletion of all other additions, and dismissed the Revenue’s appeal in toto.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
