Neha Modi Vs ITO (ITAT Ahmedabad)
In the case Neha Modi vs. ITO, the Income Tax Appellate Tribunal (ITAT) Ahmedabad heard an appeal against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre for the Assessment Year 2011–12. The main issue involved the addition of ₹47,79,600 under Section 69 of the Income Tax Act, which was treated as unexplained cash credits by the Assessing Officer and confirmed by the CIT(A). The assessee, engaged in the trading, loading, and unloading of IOC gas cylinders, explained that the cash deposits in her bank account were legitimate receipts from sales to customers and payments made to IOC for fresh stock.
The assessee also argued that if the addition had to be made, it should have been based on the peak credit theory, considering the entire year’s transactions, including withdrawals and deposits. However, the CIT(A) had rejected this without detailed analysis or providing adequate reasoning in the appellate order. Furthermore, the assessee contended that she was not furnished with the reasons recorded for reopening the case, despite requesting them during the appellate proceedings.
Recognizing these procedural and factual lapses, the ITAT noted that the source of the cash deposits required further verification. The Tribunal directed the Assessing Officer to obtain detailed information regarding cash received from customers, payments made to IOC, and examine the loading/unloading charges. The appeal was thus allowed for statistical purposes, and the matter was remanded back for reassessment.
