Rashida Yahya Bangalorewala Vs ITO (ITAT Bangalore)
Cash Deposits from Son’s Mobile Trading Business – 69A Addition Deleted; Only 8% Presumptive Income Taxable u/s 44AD
Assessee, an individual, did not file return originally. Based on RMS data, AO found cash deposits of ₹76,81,000/- in her SBI bank account. Proceedings u/s 148A(b) were initiated & reassessment notice u/s 148 was issued on 15.03.2024. In response, Assessee filed return offering income @ 5% u/s 44AD on turnover of ₹82,50,200/- amounting to ₹4,95,012.
She explained that during Covid-19 financial crisis, her son was engaged in trading mobile phones/electronic goods using 7 credit cards in his name. Purchases were made from Amazon, Flipkart, Reliance Digital, Croma, MI Stores etc., but billed in the names of 9 friends/relatives because of quantity restrictions. The son sold these phones in the grey market, received cash, deposited the cash into mother’s SBI bank account, & from that account paid the credit card dues. Thus, cash deposits represented business sales, & presumptive income was rightly offered.
AO disbelieved the explanation & made full addition of ₹76,81,000/- u/s 69A, passing reassessment u/s 147 r.w.s. 144 r.w.s. 144B. Total income assessed at ₹81,76,010.
Before CIT(A), Assessee furnished summary of bank credits showing ₹96,82,537/- deposited (₹77,00,450 cash sales + ₹5,50,005 cheque sales + small interest/loan). CIT(A) accepted the factual explanation, but rejected the claim because Assessee could not produce party-wise customer details, name, address, account numbers, & confirmed the addition.
