Bhavanji Jugaji Thakor Vs ITO (ITAT Ahmedabad)
In the case of Bhavanji Jugaji Thakor Vs ITO, the Income Tax Appellate Tribunal (ITAT) Ahmedabad reviewed an appeal against the CIT(A) order that upheld an addition of ₹34.3 lakh as unexplained cash credit under Section 68 of the Income Tax Act for the assessment year 2016-17. The assessee had filed a return of ₹1.8 lakh, but the Assessing Officer (AO) added ₹34.3 lakh, citing it as unexplained cash credit. The AO also added ₹49.5 lakh as unexplained investment and ₹1.8 crore as short-term capital gain, raising the total assessed income to ₹2.65 crore. The assessee argued that Section 68 could not apply as no books of accounts were maintained, and the deposits were from known sources, including property sales and agricultural income.
The Ld. AR argued that Section 68 cannot be applied when the assessee has not maintained formal books of account. However, in this case, the unexplained cash credit provision was invoked based on cash deposits and transactions recorded in the assessee’s savings account with Bank of Baroda. Since the bank statement effectively serves as the assessee’s books, especially for an individual not maintaining formal accounts like a company, the argument against applying Section 68 does not hold.
