Pragjibhai Parshotambhai Patel Vs ITO (ITAT Surat)
The Surat Bench of the ITAT allowed the assessee’s appeal for AY 2014-15 and deleted all additions made by the Assessing Officer. The Tribunal held that the addition of ₹10 lakh on account of alleged difference in opening cash balance was unsustainable, as the assessee had plausibly explained the difference as arising from a clerical error in the preceding year’s return and the Revenue failed to bring any material to establish unexplained income. Since the assessee was declaring income under section 44AD and not maintaining regular books, such arithmetical discrepancies could not be treated as unexplained money.
With respect to the addition of ₹6.58 lakh treated as unexplained cash credit, the Tribunal noted that the amount represented recovery from sundry debtors arising from business transactions and formed part of gross receipts considered for presumptive taxation. Similarly, the addition of ₹2.08 lakh made by applying section 50C/43CA was held to be unjustified, as the property sold constituted stock-in-trade and no evidence was brought on record to show receipt of consideration over and above the declared amount. Accordingly, all additions were deleted and the appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT SURAT
