Dayanand Paryani Vs ITO (ITAT Jabalpur)
TAT Jabalpur partly allowed the appeal where the Assessing Officer added Rs. 29.38 lakh as unexplained cash under Section 68. The Tribunal directed the addition to be limited to 12% interest on short-term loans, considering the assessee’s business of lending and set-off of withdrawals.
The Income-Tax Appellate Tribunal (ITAT), Jabalpur Bench, partially allowed the appeal filed by Dayanand Paryani against the order of the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year (A.Y.) 2010-11. The central issue was the confirmation of an addition of made under Section 68 of the Income-tax Act, 1961, based on unexplained cash deposits in the assessee’s bank account.
Factual Background and Assessment Proceedings
The case originated from information received by the Assessing Officer (AO) via the Annual Information Return (AIR) indicating that the assessee had deposited cash totaling in his bank account during the Financial Year 2009-10, relevant to A.Y. 2010-11. Believing that income chargeable to tax had escaped assessment, the AO re-opened the assessment by issuing a notice under Section 148 of the Act on March 27, 2017.
Despite the notice being served, the assessee reportedly failed to file a return of income or provide a satisfactory response. Consequently, the AO proceeded to frame an ex-parte assessment under Section 144 read with Section 147 of the Act. The AO, without any further independent inquiry or consideration of the source of the deposits, added the entire amount of to the assessee’s income under Section 68 as unexplained cash credit. The assessed income was thus determined at .
