Harshang Kaushikkumar Rami Vs ITO (ITAT Ahmedabad)
The appeal was filed by Harshang Kaushikkumar Rami against the order dated 21 June 2024 of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, concerning Assessment Year 2017–18. The assessee challenged (1) the addition of Rs. 5,00,30,946/- as unexplained income under Section 69A of the Income Tax Act and (2) the reopening of assessment under Section 147.
The assessee filed a return of income on 16 February 2018, declaring Rs. 2,98,820/-. Information indicated that he held an account with Renuka Mata Multi State Urban Co-operative Credit Society Ltd., in which cash deposits of Rs. 5,00,30,946/- were made during the relevant year and remained unexplained. Consequently, the case was reopened under Section 147 with requisite approval, and a notice under Section 148 was issued on 31 March 2021. As there was no response from the assessee, the Assessing Officer (AO) issued Section 133(6) notices to the concerned banks seeking statements. No replies were received, and therefore, the AO passed an ex-parte assessment order under Sections 147, 144, and 144B, adding the full deposit amount under Section 69A as unexplained money.
On appeal, the CIT(A) dismissed the assessee’s contention.
Before the Tribunal, the Authorised Representative (AR) argued that the AO ignored bank statements already filed. The assessee claimed to be engaged in trading of brass products, receiving cash from buyers across India, depositing it into bank accounts, and withdrawing funds for URD (Unregistered Dealer) purchases used for further sales. The AR contended that the deposits represented business receipts, not undisclosed investments. Citing various ITAT Rajkot Bench decisions and judgments such as CIT v. President Industries (258 ITR 654) and PCIT v. Shitalben Saurabh Vora, the assessee requested that the deposits be treated as sales, with income estimated at a reasonable profit rate. Alternatively, the assessee argued that since cash was repeatedly deposited and withdrawn, only the peak balance of Rs. 23,85,567/- should be considered.
