Ramel Ajit Singh Vs ITO (ITAT Mumbai)
ITAT Mumbai held that the cash deposited is out of the gross receipts and that once gross receipts are disputed then no addition is sustainable under section 68 of the Income Tax Act. Accordingly, appeal allowed to that extent and addition deleted.
Facts- The case of assessee was reopened under section 147 of the Income Tax Act, 1961. Case was reopened on the basis of information received from ITO, Mumbai that assessee is one of the members in Himachal Mitra Mandal Co-op Credit Society and during the year under consideration he made cash deposits of Rs.5,87,678/- in his bank accounts.
AO after serving final show-cause notice, and in absence of any reply about source of cash deposits with Himachal Mitra Mandal Co-op Credit Society treated the entire cash deposits of Rs.5,87,678/- as unexplained cash credit. However, addition of Rs. 3,53,884/- was confirmed vide assessment order dated 24.02.2022. CIT(A) upheld the addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that given the nature of business of the assessee there is merit in the submission that the cash deposited is out of the gross receipts and that once gross receipts are disputed then no addition is sustainable under section 68 of the Act. In view of these discussions and considering the facts peculiar to the assessee we hold that the ld CIT(A) is not correct in sustaining the addition without considering the revised gross receipts declared by the assessee and the tax paid thereon. In the result, the substantial ground No.1 of the appeal is allowed.
