Pankaj Jhumarmal Bothra Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) allowed all four appeals filed by the assessee, holding that the Assessing Officer (AO) was not justified in treating credits appearing in the assessee’s personal HDFC savings bank account as undisclosed business turnover or in rejecting the books of account under Section 145(3) of the Income-tax Act.
The assessee, an individual carrying on business through two proprietary concerns, had declared a turnover of ₹9.61 crore and filed a return showing income of ₹9.50 lakh. During scrutiny assessment, the AO noticed credits of ₹2.64 crore in the assessee’s personal HDFC bank account, which was not reflected in the books of the proprietary concerns. Treating the entire credits as suppressed business turnover, the AO enhanced the turnover to ₹12.25 crore, rejected the books of account under Section 145(3), and estimated profit at 8% of the enhanced turnover, resulting in an assessed income of ₹98.06 lakh. The AO also imposed penalties under Sections 271A, 271B, and 272A(1)(d), which were upheld by the Commissioner (Appeals).
Before the Tribunal, the assessee contended that the HDFC account was a disclosed personal savings account and that the credits mainly consisted of internal transfers from proprietary concerns, family members, HUF, share broker receipts already offered to tax, rent income, dividend income, agricultural land sale, insurance receipts, reimbursements, and other non-business receipts. It was further argued that the declared turnover was fully supported by GST returns and TIS data and that no defects had been found in the books of account.
