Case Law Details
Vishal Balwani Vs ITO (ITAT Indore)
The ITAT Indore, in the case of Vishal Balwani Vs ITO, considered an appeal against the addition made under section 68 of the Income Tax Act, 1961, pertaining to unexplained cash deposits in the bank account amounting to Rs. 33,26,105 for the assessment year 2012-13. The appellant raised several grounds of appeal, challenging the addition made by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeal) [CIT(A)].
Initially, the appellant denied depositing any money in the bank account, but later provided an explanation for the deposits. However, the AO added the entire amount of cash deposit to the appellant’s total income, disregarding the explanation provided. The appellant contended that only the peak credit should be considered for the addition, considering the regular withdrawals made prior to the deposits.
The Tribunal observed that there was a time gap between the deposit made in the bank account and the notice issued by the AO for reassessment. Although the appellant initially denied the deposits, a subsequent reply explaining the deposits was submitted. However, this reply was purportedly submitted just one day before the AO passed the order, raising doubts about whether it reached the AO in time.
The Tribunal noted that there were regular deposits and withdrawals from the bank account on a daily basis, indicating that a withdrawal should not be denied as a source of a subsequent deposit made shortly after. The appellant provided details and statements of peak credit, which were not considered by the CIT(A) while passing the order.
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