Rahul Goel Vs ITO (ITAT Delhi)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Delhi Bench has set aside an addition of ₹88,91,412 made under Section 68 of the Income Tax Act, 1961, against assessee Rahul Goel for the Assessment Year 2014-15. The Tribunal held that a bank passbook cannot be considered “books of account” for the purpose of invoking Section 68, which deals with unexplained cash credits found in an assessee’s books.
The case, Rahul Goel Vs ITO (ITAT Delhi), stemmed from the Assessing Officer (AO) making additions based on deposits in Goel’s bank accounts, treating them as unexplained cash credits. Goel, a commission agent in plastic scrap, explained that the deposits, a mix of cash and cheques, were sales proceeds from consignment sales and gifts from relatives. He stated that he received payments from factories and then paid his small vendors after withdrawing cash or issuing cheques.
The total amount in question was ₹88,91,412, comprising ₹68,20,860 in cash deposits and the rest in cheque deposits across his savings and current accounts. Specifically, Goel explained that ₹5,00,000 was a gift from his in-laws, and ₹3,00,000 was received from his father for his sister’s marriage expenses.
The Commissioner of Income Tax (Appeals) [CIT(A)] had upheld the AO’s addition. The CIT(A) found the explanation regarding the ₹5,00,000 gift from in-laws unsatisfactory, noting the absence of a confirmation from the in-laws, the date of the gift, or the occasion, despite acknowledging their identity and creditworthiness based on their ITRs and Form 16.
