Vijaykumar Jagannath Agarwal Vs ITO (ITAT Ahmedabad)
Conclusion: Assessee had recorded the cash deposits as sales in the audited books of account, and no discrepancies were found by AO or CIT(A). Failure to provide PAN alone could not be the sole reason to treat the sales as unexplained money, particularly when Aadhaar details were submitted.
Held: Assessee was a textile trader, who had deposited Rs. 27,76,460 in his business account and an additional Rs. 2,50,000 in his personal savings account during the 2016 demonetization period. AO had treated the entire sum as unexplained money under Section 69A because assessee could not furnish the PAN details of his customers, rejecting the Aadhaar cards that were provided as proof of identity. This addition was later upheld by CIT (Appeals). On appeal. It was held that assessee had maintained audited books of accounts where the cash deposits were duly recorded as sales revenue. Tribunal observed that Revenue did not find any discrepancy in the books, cash ledger, or bank statements. It ruled that the rejection of transactions purely for lack of PAN, while ignoring the submitted Aadhaar details, was not justified. The bench cited the Supreme Court’s ruling in Lakhmichand Bajinath (1959), which established that amounts credited in business books were presumed to be business receipts unless proven otherwise by the tax department. For the business account deposit, Tribunal restored the matter to the file of AO. It directed AO to verify the genuineness of the parties using the Aadhaar details provided and to conduct independent inquiries, including issuing notices under Section 133(6), instead of dismissing the evidence outright. Regarding the personal cash deposit of Rs. 2,50,000, which was claimed as household savings, Tribunal noted that CBDT’s own instructions provide relief for senior citizens. It directed AO to re-examine the issue by looking into past financial records, cash withdrawals, and savings patterns to determine if the amount could reasonably be attributed to accumulated savings, ensuring CBDT guidelines were followed.
