Nitin Kumar Bohra Vs ITO (ITAT Bangalore)
ITAT Bangalore held that addition u/s. 69A unjustified as cash deposited in bank account is from business income and the same is already considered under the Profits & gains of business or profession.
Facts- The assessee is a jeweller and running business in the proprietorship named as M/s. Anup Jewellers. The case was selected for scrutiny and on the reason of abnormal increase in cash deposit during demonetisation period as compared to average rate of cash deposit during pre-demonetisation. The assessee did not submit information as required by the AO, accordingly he issued notice u/s. 133(6) of the Act calling bank statements which were supplied.
AO noted that sales have been done in cash and there is no name, address or contact details of the customers in most of the cases. Hence cash deposits in the assessee’s bank account was treated as unexplained cash u/s. 69A of the Act and amount of Rs.51,95,740 was added to total income of the assessee. First Appellate Authority (FAA) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessee has deposited cash in the bank account from his business turnover on which assessee had declared business profit. Both the authorities below have not reduced the profit element involved in the business turnover and corresponding expenditure. Both the authorities have considered the income twice i.e., under the profits & gains of business or profession under Chapter IVD on the turnover and income from other sources u/s. 69A. Resultantly there is double taxation on the same income which is not permitted. Once the cash deposit out of the turnover is treated as unexplained investment u/s. 69A, the actual turnover which is not part of the bank deposits has to be calculated. It is also interesting to note that partial cash transaction on the same modus operandi followed by the assessee has been accepted which is not subject matter of the appeal. We also note that the assessee has filed VAT return disclosing the entire turnover shown in the financial statements. Therefore, both the authorities are not justified in making addition u/s. 69A of the Act.
