Kumarpal Chandanmal Shah Vs ITO (ITAT Ahmedabad)
Assessee, a trader operating from Revdi Bazar, Ahmedabad, filed an appeal against the order of CIT(A)/NFAC . In assessment proceedings, AO had added ₹ 25,66,000 u/s 68 treating the amount of cash deposits in the bank as unexplained credits, and also rejected books of account u/s 145(3) on the presumption that the source of cash was not properly explained.
Before the lower authorities, Assessee furnished a detailed reconciliation explaining that the deposits represented collections from regular trade debtors against sales made in earlier years. He produced a bifurcation statement showing each debtor’s name, outstanding balance, & the corresponding receipt in cash.
Despite these explanations & supporting details, AO proceeded to sustain the addition without bringing any contrary material or evidence on record to show that the deposits were not from the disclosed business activity.
Tribunal’s Observations & Decision
Tribunal noted that the explanation of Assessee was fully supported by contemporaneous records & that Revenue had not disputed the genuineness of the sale transactions nor produced any evidence to show that the cash deposits were from any unexplained source. The bifurcation submitted clearly established that the deposits were merely realisations from earlier debtors, falling within the ordinary course of business.
