Sumit Wadhwa Vs ITO (ITAT Chandigarh)
Summary: The Income Tax Appellate Tribunal, Chandigarh Bench, “B”, Chandigarh, allowed the appeal filed by Sumit Wadhwa for Assessment Year 2017-18 against the order passed by the Addl./JCIT(A)-2, Jaipur under section 250 of the Income-tax Act. The appeal arose from the assessment framed by the Assessing Officer on 26.12.2019. The sole grievance before the Tribunal concerned confirmation of an addition of Rs.13.34 lakh in respect of cash deposits under section 68 read with section 115BBE.
The assessee, a resident individual stated to be engaged in dealing in glass used for windows, doors, kitchens and similar purposes, had deposited Rs.17.34 lakh in his HDFC Bank account during the demonetisation period. The assessee explained that the deposits were sourced from sale proceeds and receipts from debtors. The Assessing Officer, however, observed a significant increase in cash deposits during the demonetisation period and alleged that the assessee had manipulated his data to justify the deposits. After partially accepting Rs.4 lakh, the Assessing Officer made the balance addition of Rs.13.34 lakh under section 68 read with section 115BE, as recorded in the supplied Full Text.
Before the Tribunal, the assessee submitted that the Assessing Officer had alleged absence of explanation and evidence regarding the cash deposits despite the assessee having furnished the documents called for during assessment proceedings. These included the cash book, bank statement, profit and loss account, balance sheet, sales account and other records. The assessee contended that the cash book established that the deposits came from available cash-in-hand and that cash sales and realisations from debtors were duly recorded in the regular books. It was also submitted that the sales and purchase transactions were evidenced by VAT returns, the trading results had been accepted, and the Assessing Officer had neither rejected the books of account nor doubted the sales or purchases.
