Sh. Sita Ram Saini Vs ITO (ITAT Jaipur)
Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has ruled in favour of an assessee, Sh. Sita Ram Saini, holding that cash withdrawn from a bank and subsequently re-deposited cannot be treated as business turnover for the purpose of estimating profit. The decision, delivered in the case of Sh. Sita Ram Saini Vs ITO, sets aside the order of the Commissioner of Income Tax (Appeals) and provides significant relief to the taxpayer for the assessment year 2014-15.
The case centred on large cash deposits amounting to ₹79,95,179 made into the bank accounts of Mr. Saini. The dispute travelled from the Assessing Officer (AO) to the CIT(A) and finally to the ITAT, which examined the source of these deposits in detail.
Background of the Assessment
The matter began when Mr. Saini’s case was selected for limited scrutiny after he filed his income tax return, declaring a total income of ₹2,60,490. The scrutiny was triggered by Annual Information Return (AIR) data showing cash deposits of ₹79,95,179 in his accounts with ICICI Bank and Bank of Baroda.
During the assessment proceedings, the AO noted that the assessee failed to provide the necessary documents, books of accounts, or a satisfactory explanation for the source of these deposits despite being given multiple opportunities. Citing non-compliance and the approaching deadline for the assessment, the AO passed a best judgment assessment order under Section 144 of the Income Tax Act, 1961. The entire deposit amount of ₹79,95,179 was treated as “unexplained cash credits” under Section 68 of the Act and added to Mr. Saini’s income.
