Vanditbhai Rajendrakumar Patel Vs ITO (ITAT Ahmedabad)
Facts- The brief facts of the case were that as per AIR information, the Ld. Assessing Officer came know that the assessee had received cash deposits of Rs. 25,21,100/-in saving bank account maintained with Corporation Bank. To verify cash deposits, letter dated 10-02-2017 was served on the assessee, which remained uncompiled with. Accordingly, the Ld. Assessing Officer issued 148 notice to initiate re-assessment proceedings. The Ld. Assessing Officer sent several notices on the assessee which all remained uncompiled with. Accordingly, the Ld. Assessing Officer added an amount of Rs. 22, 21, 100/- as unexplained cash credits u/s 68 of the Act.
Conclusion- In our view, since the assessee had not filed return of income for the captioned year and there was a huge cash deposit of Rs. 25,21,100/- in his saving bank account, and further, when the assessee was called upon to provide an explanation in respect of this deposit, he did not comply, this itself leads to an reasonable doubt regarding the source of such deposits especially when return of income has not been filed. In the case of Pr. CIT v. Gopal Heritage (P.) Ltd [2021] 127 taxmann.com 679 (Gujarat), the Gujarat HC held that where Assessing Officer issued reopening notice against assessee on ground that an information was received from NMS (Non filler monitoring system) that assessee had received cash deposits of certain amount in a bank account but had not disclosed same in its return, since assessee had failed to submit supporting evidences and source of income with regard to said cash deposits, impugned reopening notice issued against assessee was justified. Therefore, in our considered view, looking into the totality of facts in the case, the Ld. Assessing Officer is justified in re-opening the assessment in the instant set of facts. The process of re-opening was initiated after affording due opportunity to the assessee to give explanation regarding source of deposit. It is only when the assessee failed to comply / co-operate that case was re-opened u/s 148 of the Act, after following due process of law.
The assessee has thus discharged the initial burden cast upon him u/s 68 of the Act. It is a well settled that under the law the assessee can be asked to prove source of credit but not the source of the source as held by various Courts including the jurisdictional High Court in the case of Rohini Builders 256 ITR 360 (Guj). In view of the above discussion and the facts of the present case, in our view, the Ld. CIT(Appeals) has erred in facts and in law in sustaining addition u/s 68 of the Act in respect of cash deposits in the hands of the assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals), Gandhinagar, Ahmedabad in Appeal no. CIT(A)/GNR/85/2017-18 vide order dated 07/08/2019 passed for the assessment year 2010-11.
2. The assessee has raised the following Grounds of Appeal:-
