Case Law Details
Shri. N.H. Panhalkar & Co. Vs ITO (ITAT Pune)
This appeal by the assessee is directed against the order dated 29-10-2021 passed by the ld. Commissioner of Income Tax (Appeals) in NFAC Delhi, in relation to the A.Y. 2017-18.
2. The only issue raised in this appeal is against confirmation of addition of Rs. 63,00,215/- made by the A.O u/s 69A of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).
3. Briefly stated the facts of the case are that the assessee is a commission agent, who filed its return declaring total income of Rs. 1,66,830/-. The case was selected for scrutiny for verification of cash deposits during demonetization period. The A.O observed that the assessee made cash deposits in the bank account from 9-11-2016 to 31-12-2016 totalling to Rs. 74,30,550/-. On being called upon to explain the source of such cash deposits, the assessee submitted that a sum of Rs. 20,50,000/- represented advances received back from farmers; Rs. 34,50,000/- received from five partners; and Rs.19,00,000/-as Commission income on sales. The A.O did not accept the genuineness of cash deposits received from farmers and commission income but accepted the genuineness of Rs.3.75 lakh from one of the partners, Shri C.N. Kazi. This is how, an addition of Rs. 63,00,215/- was made u/s 69A of the Act towards unexplained deposits in bank account during demonetization period. The ld. CIT(A) sustained the addition.
4. We have heard the rival contentions and gone through the material on record. It is seen that the assessee is maintaining regular books of accounts. The first item is of Rs. 20,50,000/- claimed to have been received from farmers out of advances made in the preceding year. The assessee has filed balance sheet for the immediately preceding year showing advances receivable from such farmers tabulated at pages 9 and 10 of the assessment order. This shows that the amount received back during the current year was given to these very farmers in earlier year, which was also depicted in the balance sheet and the return of income filed before the announcement of demonization. Thus the source of deposit in the bank as well as genuineness of the receipt of advances from the farmers, stand proved. The addition to this extent is directed to be deleted.
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