Case Law Details
Mehboob Amirali Kamdar Vs ITO (ITAT Mumbai)
Introduction: In the recent case of Mehboob Amirali Kamdar vs. ITO, the Income Tax Appellate Tribunal (ITAT) in Mumbai rendered an important decision. The case revolved around a disputed addition under Section 68 of the Income Tax Act, concerning unexplained cash credits.
The primary issue at hand was a discrepancy in the amount shown as received from M/s Kukreja Constructions by the taxpayer, Mr. Mehboob Amirali Kamdar. The Assessing Officer had made an addition of Rs. 40 lakhs, believing there was a mismatch between the sum received and the amount confirmed by M/s Kukreja Constructions. Mr. Kamdar’s appeal sought to prove that the difference was due to an accounting mistake, and therefore, no addition was warranted under Section 68.
Detailed Analysis: The crux of the matter lay in the fact that while Mr. Kamdar had indeed received Rs. 3,85,75,000 from M/s Kukreja Constructions, his books of accounts reflected a receipt of Rs. 4,25,75,000. This difference of Rs. 40 lakhs raised suspicions, leading the Assessing Officer to seek clarification.
Mr. Kamdar’s explanation centered on an accounting error made by his accountant. He asserted that he had initiated an RTGS transfer of Rs. 40 lakhs to a company named M/s. Elyco Builders. However, due to a technical issue, the RTGS did not get through. As a result, the bank reversed the entry by crediting the Rs. 40 lakhs back to Mr. Kamdar’s account.
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