This case review delves into the Income Tax Appellate Tribunal’s decision for ITA No. 719/DEL/2020, where appellant Rohit Kumar Chhabra from Faridabad contests an order by the Commissioner of Income-tax (Appeals). The crux of the dispute revolves around a substantial addition made to the appellant’s income under Section 68 of the Income Tax Act, regarding cash deposits totaling Rs. 15,00,000 during the assessment year 2011-12.
Rohit Kumar Chhabra faced a re-assessment for AY 2011-12 after Air Information suggested undisclosed income. The assessment resulted in an addition of Rs. 16,50,240, primarily due to unexplained cash deposits in his bank account, which the appellant argued stemmed from his business transactions.
The appellant’s primary contention was the denial of the liability on the assessed income, arguing that the cash deposits were from legitimate business sales of medical/surgical instruments. Despite extensive submissions to the Assessing Officer and CIT(Appeals), both authorities upheld the addition, prompting the appellant to approach the Tribunal.
Despite multiple opportunities, the appellant did not attend the Tribunal hearings, leading to an ex parte decision. The Departmental Representative supported the lower authorities’ decisions, while the Tribunal, after reviewing the case details, affirmed the findings of the CIT(Appeals). The Tribunal noted contradictions in the appellant’s explanations and lack of substantiating evidence for the claimed business activities.
The Tribunal’s decision to dismiss the appeal highlights the critical importance of providing substantial and credible evidence to support claims against tax additions. This case serves as a cautionary tale for taxpayers on the necessity of maintaining clear and corroborated records, especially when dealing with substantial cash transactions.
The final judgment confirmed the addition of Rs. 15,00,000 as unexplained income under Section 69A of the Act, dismissing the appellant’s grounds of appeal and underscoring the need for meticulous financial documentation and transparency.
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