Sanjaykumar Zamatmal Kalwani Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) Ahmedabad addressed an appeal filed by Sanjaykumar Zamatmal Kalwani against an order by the Commissioner of Income-tax (Appeals) (CIT(A)). The core issue revolved around an addition of ₹11,83,000 made by the Assessing Officer (AO) under Section 69B of the Income-tax Act, 1961, concerning unexplained cash deposits during the demonetization period. The taxpayer, a fruit trader, had declared a total income of ₹5,28,360 for the assessment year 2017-18. The AO’s addition was based on the taxpayer’s alleged failure to adequately explain the source of these cash deposits. The CIT(A) upheld the AO’s decision, citing the taxpayer’s lack of proper documentation, such as sale and purchase bills, and perceived inconsistencies in their claimed business operations.
The ITAT, however, overturned the CIT(A)’s ruling. The tribunal noted that the taxpayer had presented financial statements showing substantial sales and purchases, amounting to ₹1,58,30,380 and ₹1,32,35,740, respectively. The taxpayer’s business, dealing in fruits, inherently involved frequent cash transactions, and the tribunal found it unreasonable to expect the same level of record-keeping as a corporate entity. The ITAT also highlighted the selective nature of the AO’s scrutiny, questioning only the demonetization-period deposits while accepting other cash transactions. The tribunal emphasized that the taxpayer had provided evidence, including cash books, sample invoices, and audit reports, supporting their claim that the disputed deposits were part of regular business turnover. The ITAT concluded that the CIT(A)’s rejection of the taxpayer’s explanations and the selective addition under Section 69B were unjustified, and allowed the taxpayer’s appeal.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
