ACIT Vs Dhaneshbhai Parshottamdas Soni (ITAT Ahmedabad)
Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, has sent back a case involving significant tax additions to the Commissioner of Income Tax (Appeals) [CIT(A)] for a fresh decision. The tribunal’s order came after it noted that the CIT(A) had deleted substantial additions related to unexplained cash deposits and unsecured loans without obtaining a crucial remand report from the Assessing Officer (AO).
The case, ACIT Vs Dhaneshbhai Parshottamdas Soni, for the Assessment Year 2017-18, involves an individual engaged in the business of trading and manufacturing gold, silver, and diamond ornaments. The assessee had filed a return declaring an income of Rs. 3,23,96,233.
During the scrutiny assessment, the AO identified cash deposits amounting to Rs. 6,31,00,000 made during the demonetization period. Citing these deposits and other discrepancies, the AO rejected the books of accounts and proceeded to make several additions to the assessee’s income. These included an addition of Rs. 7,76,10,000 for unexplained cash deposits, Rs. 45,90,80,505 for unsecured loans from 22 parties treated as unexplained income under section 68 of the Income Tax Act, 1961, and a disallowance of interest paid on these loans amounting to Rs. 1,44,19,775. Additionally, the AO noted a difference in Gross Profit of Rs. 39,49,382, leading to a significantly enhanced total assessed income of Rs. 58,74,55,892.
