Anil Kumar Vs ITO (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT) Delhi bench has granted significant relief to a taxpayer, Anil Kumar, by deleting an addition of Rs. 20,58,000 made under Section 69A of the Income-tax Act, 1961, for unexplained cash deposits. The Tribunal’s decision reaffirms that taxpayers declaring income under the presumptive taxation scheme of Section 44AD are generally not required to maintain detailed books of account or furnish vouchers, and cash deposits traceable to declared gross receipts under this section should not be treated as unexplained.
The appeal was filed by Anil Kumar against an order dated October 1, 2024, passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2017-18.
Background of the Case
Anil Kumar had filed his return of income declaring a taxable income of Rs. 4,11,070, computing his income under the presumptive taxation provisions of Section 44AD of the Act. The assessee is engaged in the business of Kaccha Aaratia (commission income) and trading of Khar and medicines used for farming.
The case was selected for limited scrutiny through the CASS (Computer Assisted Scrutiny Selection) system to specifically examine cash deposits made during the year. Consequently, notices under Section 143(2) and Section 142(1) of the Act were issued, accompanied by a questionnaire, seeking information and documentary evidence regarding the source of these cash deposits.
