Rajeshkumar Lakhubhai Dangar Madhav Darshan Finance Vs ITO (ITAT Rajkot)
Summary: The Income Tax Appellate Tribunal (ITAT), Rajkot Bench, partly allowed the appeal filed for Assessment Year 2012-13 against the addition of Rs. 31.90 lakh made under Section 69A of the Income Tax Act on account of unexplained cash deposits. The assessee, engaged in finance business and labour work relating to speaker boxes, had declared income of Rs. 1,64,400/-. During scrutiny assessment, the Assessing Officer noted cash deposits of Rs. 7 lakh and Rs. 24.90 lakh in the bank account and treated the total amount as unexplained money. The assessee explained that the deposits were sourced from cash withdrawals, family agricultural income, and loan amounts received from Vrundavan Construction. The CIT(A) upheld the addition, observing that no agricultural income or unsecured loan was reflected in the returns or balance sheets, and that the assessee failed to justify why withdrawn cash from FY 2009-10 was redeposited in FY 2011-12 after two years. Before the Tribunal, the assessee relied on bank statements, agricultural sale bills, revenue records in Forms 7/12 and 8A, capital accounts, balance sheets, details of loans, and other supporting documents. The Tribunal noted that the assessee had submitted detailed records explaining the source of cash deposits and that the agricultural records produced were not specifically disbelieved by the Assessing Officer. Considering the nature of the assessee’s business, the documents placed on record, the explanation regarding family agricultural income, and the facts and circumstances of the case, the Tribunal held that the entire addition could not be sustained. However, it considered it appropriate to sustain an ad hoc addition of 10% of the disputed amount. Accordingly, the Tribunal sustained addition of Rs. 3,19,000 and directed deletion of the balance addition. The appeal was allowed for statistical purposes.
