Ranjit Singh Kundalia Vs ITO (ITAT Kolkata)
Inadvertent Cash-Book Omission Cannot Trigger Section 68 Addition When Cash Sales and Records Explain Source; Wife’s Tax Profile Proves Loan: Kolkata ITAT
The Kolkata ITAT has deleted additions of ₹50,000 and ₹2.50 lakh after finding that the assessee’s cash sales, invoices, stock statements, revised cash book and the tax records of his wife satisfactorily explained the disputed amounts.
The Tribunal held that an inadvertent omission in the cash book could not, by itself, justify an addition when the overall source of cash deposits stood explained and the Assessing Officer had not identified any discrepancy in the supporting business records.
The Tribunal also condoned a delay of 217 days because appellate communications had apparently been sent to an old email address belonging to the assessee’s former accountant.
Background
The assessee, an individual carrying on business through his proprietary concern, M/s Kundalia Enterprises, filed his return for Assessment Year 2017-18 declaring a total income of ₹3,35,620.
The income was offered on a presumptive basis under Section 44AD. The return disclosed gross receipts of ₹65,55,616 through banking channels and cash sales of ₹10,29,736.
Based on information that the assessee had deposited cash of ₹2.15 lakh in his bank account during the demonetisation period, reassessment proceedings were initiated.
