Anand Agarwal Vs DCIT (ITAT Delhi)
In the case of , the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal against the addition of Rs. 4.05 crore made under Section 68 of the Income Tax Act for Assessment Year 2018-19. The assessee, a director in a private company, had filed a return declaring income from salary, and interest. During scrutiny assessment, the Assessing Officer (AO) noticed large cash deposits and withdrawals in the assessee’s bank account and examined two credits amounting to Rs. 1.70 crore and Rs. 2.35 crore received from two individuals on 20.04.2017. Although confirmations were filed, the AO held that the assessee failed to establish the genuineness and creditworthiness of the parties because their income tax returns and bank statements were not initially produced. The AO consequently treated the sums as unexplained cash credits under Section 68 and applied Section 115BBE for taxation at a special rate.
The assessee contended that these amounts were not fresh loans but repayments of short-term advances earlier given to the same parties in the immediately preceding assessment year through banking channels. Copies of bank statements showing the advances made on 24.03.2017 and the subsequent repayments through account payee cheques were placed before the Tribunal. The assessee also submitted copies of the bank statements, ITRs, and balance sheets of both parties to establish the genuineness of the transactions and their financial capacity.
