Bath Affair Vs ITO (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, considered an appeal against an order passed under Section 250 dated 29.12.2023, whereby the National Faceless Appeal Centre had confirmed an addition of Rs. 1,53,03,000 made by the Assessing Officer. The dispute related to the addition made under Section 68 on account of alleged unexplained cash deposits in the assessee’s bank account.
The assessee argued that the show cause notice issued by the Assessing Officer was vague because it referred to Sections 68/69 without clearly specifying the applicable provision. Before the first appellate authority, the assessee contended that Section 68 could not apply since the cash credits were reflected in the bank account and not directly in the assessee’s own books. The assessee further submitted that although the appellate authority agreed that Section 68 was not applicable, it still confirmed the addition under Section 69A.
The assessee argued that Section 69A applies only where transactions are not recorded in the books of account. In the present case, the Assessing Officer himself had recorded a finding that all transactions were entered in the books of account. The assessee also filed a paper book containing details of recorded sales, VAT returns, and related documents to show that all sales were duly accounted for.
