Ritu Mittal Vs ITO (ITAT Agra)
The Agra Bench of the Income Tax Appellate Tribunal (ITAT), in Ritu Mittal v. ITO, partly allowed the assessee’s appeal and held that an independent addition towards cash deposits under Section 69A of the Income-tax Act could not be sustained without considering the business income already accepted by the Assessing Officer (AO). The Tribunal further observed that, even if the business explanation was not accepted, the issue should be examined by applying the peak credit theory instead of taxing the entire amount of deposits.
The assessee had filed her return of income for Assessment Year 2011-12 declaring taxable income of ₹2,22,440, which included business income of ₹1,20,000. The AO noticed cash deposits aggregating to ₹13,08,515 in the assessee’s bank account maintained with the State Bank of India and, in reassessment proceedings under Sections 147 read with 144, treated the entire amount as unexplained money under Section 69A.
The assessee challenged the reassessment by filing a revision petition under Section 264 before the Principal Commissioner of Income Tax (PCIT), which was initially rejected. The assessee thereafter approached the Allahabad High Court, which quashed the revision order. In the second round of proceedings, the PCIT directed the AO to conduct a fresh assessment after providing due opportunity to the assessee.
