Jignesh Manojkumar Shah Vs ITO (ITAT Mumbai)
Past Savings Accepted: Small Cash Introduction Cannot Be Treated as Unexplained
The AO made an addition of ₹3.80 lakh u/s 68 treating cash introduced into capital account as unexplained, despite the assessee explaining it as coming from past savings and loans.
The ITAT noted that:
- The assessee had sufficient past income and cash availability reflected in earlier balance sheet,
- He had been earning income for over two decades, and
- The amount involved was relatively small compared to declared income (₹1.38 crore).
The Tribunal held that in such circumstances, reasonable presumption of availability of cash savings is justified, and strict proof cannot be demanded for small amounts.
Accordingly, the addition was deleted, and the appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal by the assessee against order dated 13.11.2025 passed by National Faceless Appeal Centre (‘NFAC’ for short), Delhi for the assessment year (A.Y. for short) 2021-22.
2. The solitary grievance of the assessee in the present appeal is addition of Rs.3,80,560/- u/s. 68 of the Income Tax Act, 1961 (`the Act’ for short).
3. Briefly, the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee filed his return of income u/s. 139(1) of the Act. The return of income filed by the assessee was selected for limited scrutiny to examine refund claim.
