ITO Vs Surekha Ashok Mukkawar (ITAT Nagpur)
The Income Tax Appellate Tribunal (ITAT), Nagpur, adjudicated an appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2017–18, concerning deletion of addition made under Section 68 of the Income Tax Act.
The assessee had not filed a return of income for the relevant year. The Assessing Officer (AO), based on information of cash deposits amounting to Rs. 2.49 crore in a bank account, reopened the assessment under Section 147. Due to non-response from the assessee during assessment proceedings, the AO treated the entire deposit as unexplained cash credit under Section 68 and passed an ex parte order under Sections 147 read with 144.
Before the CIT(A), the assessee submitted that she was engaged in the business of operating a warehouse for storage of agricultural produce. The deposits in the bank account were explained as part of transactions involving farmers who stored produce in the warehouse and availed loans from banks against such stored goods. These transactions were routed through a control account. Upon repayment of loans, goods were released, and the assessee earned only storage rental income.
The assessee further contended that the bank transactions represented loan disbursements and repayments linked to stored goods, and not income. Detailed records, including bank statements and transaction trails, were furnished to establish a nexus between deposits and withdrawals. Sample data of transactions involving farmers was also submitted to demonstrate the nature of entries.
