Case Law Details
Pukhraj Nathmal Jain Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) in the case of Pukhraj Nathmal Jain vs. Income Tax Officer (ITO) in Mumbai dealt with the appeal against the order of the Commissioner of Income Tax (Appeals) (CIT(A)) for the assessment year 2017-18. The appellant, engaged in wholesale and retail trading of cloth, declared an income of Rs. 3,31,710 for the year. During the demonetization period, the appellant deposited Rs. 39,34,000 in the bank account, which the Assessing Officer (AO) treated as unexplained income under Section 69A or Section 68 of the Income Tax Act, 1961.
The AO sought explanations from the appellant regarding the source of the cash deposits, and the appellant provided details of cash in hand, cash sales, cash withdrawals, stock register, and sample purchase bills. However, the AO considered the deposits unexplained, stating that the appellant failed to justify holding such large amounts of cash and not utilizing it for expenses.
The CIT(A) upheld the AO’s decision, leading the appellant to appeal to the ITAT. The appellant argued that the sales figures were undisputed, and the AO had not challenged the books of accounts. Additionally, the appellant provided documentary evidence supporting the source of cash, including cash sales, withdrawals from the bank, and receipts from parties.
The ITAT observed that the AO and CIT(A) did not contest the documentary evidence submitted by the appellant. Moreover, the appellant had accounted for the sales income, which was accepted by the authorities. Thus, adding the cash deposits as unexplained income would result in double taxation.
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