Nidhika Rehani Vs ACIT (ITAT Delhi)
ITAT Delhi held that addition towards undisclosed source of income cannot be sustained merely because this amount is not reported in Tax Audit Report since transaction is duly recorded in books of accounts.
Facts- The assessee is engaged in the manufacturing and trading of readymade garments and is sole proprietor of M/s. DSYNGREEN. Based on the information available on record that assessee has made cash deposits in the bank accounts during demonetization in Specified Bank Notes (SBN), case of the assessee was taken up for scrutiny. After considering the submissions made, assessment was completed u/s 143(3) at a total income of INR 2,03,49,108/- by making additions towards cash deposit during demonetization as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act of INR 28 Lakhs; payment of INR 56 Lakhs to Vani Designs as undisclosed; payment of purchase of INR 52,07,920/- as unexplained investment u/s 69C r.w.s. 115BBE of the Act; and purchase of INR 35,32,658/- as bogus.
CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- Held that out of INR 28 Lakhs deposits during demonetization period, in our considered opinion, INR 25,50,000/- could be held as cash deposit out of cash balance available in cash book on the date of demonetization. Accordingly, we uphold the addition of INR 2,50,000/- out of INR 28 Lakhs made by the AO. Accordingly, ground of appeal raised by the assessee is partly allowed.
