Pinkeshkumar Melapchand Shah Vs ITO (ITAT Ahmedabad)
Deeming fiction u/s 69A cannot be invoked mechanically or in terrorem : ITAT Ahmedabad: ITAT Deletes ₹16.69 Lakh Addition for Cash Deposits – Sales Proceeds from Garment Business Accepted; Section 44AD Presumptive Taxation Applies
Ahmedabad ITAT has deleted an addition of ₹16,69,608/- made u/s 69A in respect of cash deposits in Assessee’s bank a/c, holding that the deposits represented recorded sales proceeds from his garment trading business & were taxable, if at all, only under presumptive provisions of sec 44AD.
Assessee, engaged in trading of garments under the name Vatera Wear, did not file a return of income for AY 2012–13, claiming his total income was below the basic exemption limit. AIR information revealed cash deposits of ₹16,69,608/- in his ICICI Bank a/c during the year. AO reopened the case u/s 147. As Assessee did not respond to statutory notices, the AO completed assessment u/s 144, treating the deposits as unexplained money u/s 69A & taxing them u/s 115BBE.
Before CIT(A), Assessee filed VAT returns, profit & loss a/c, & other supporting documents showing that the deposits were business sale proceeds. He explained that the total turnover for the year was ₹22,54,232/-, out of which the deposits were made, & that the turnover was duly reported to the Commercial Tax Department. However, the CIT(A) refused to admit the additional evidence citing the absence of a formal application under Rule 46A & upheld AO’s addition.
