Gulshan Kumar Vs DCIT (ITAT Chandigarh)
Summary: The assessee appealed against the order of the Commissioner of Income Tax (Appeals)-5, Ludhiana dated 13.05.2022 for AY 2017-18, whereby addition under Section 68 of the Income Tax Act was partly sustained at Rs. 95,55,371/- against Rs. 1,11,15,371/- added by the Assessing Officer. The assessment arose from large cash deposits during the demonetization period. The assessee had filed his return on 04.08.2017 declaring total income of Rs. 30,40,160/- from salary, house property, business/profession and other sources.
The Assessing Officer issued notices under Sections 143(2) and 142(1) and subsequently a show-cause notice dated 19.12.2019 regarding cash deposits of Rs. 1,20,58,272/-. The Assessing Officer rejected the assessee’s explanation concerning opening cash balance, rental income, agricultural income and cash gifts from his sons. He treated the opening cash balance of Rs. 94,39,871/- as unverifiable, rejected the explanation regarding rental and agricultural receipts, and considered the gifts from Rohit Kumar Punani and Sahil Kumar Punani to be an afterthought. After redrafting the cash book, the Assessing Officer determined peak credit of Rs. 1,11,15,371/- on 01.01.2017 and treated it as unexplained cash credit under Section 68.
The CIT(A) granted relief of Rs. 15,60,000/- and sustained the balance addition of Rs. 95,55,371/-. Before the Tribunal, the assessee contended that the opening cash balance was supported by earlier cash books, bank withdrawals, rental income, agricultural income, gifts from his sons, capital withdrawals from M/s G.K. Resorts and other disclosed transactions. It was submitted that the personal cash books were not statutorily required to be audited and that the Assessing Officer had not identified any specific defect in the cash flow statement or supporting documents. Reliance was placed, among others, on decisions in Pinki Devi Aggarwal, Shri Sunil Mathur and Satish Chandra Pandey.
