This case discusses the appeal by Uday Shankar Shah against the ITO’s decision concerning undisclosed income and interest income adjustments for the assessment year 2011-12.
The case arises from a dispute over the reopening of the assessment under section 147 of the Income Tax Act due to unexplained cash deposits and interest income reported by Uday Shankar Shah, who is engaged in the manufacturing and trading of mobile chargers.
During the proceedings, the assessee faced adjustments concerning cash deposits and interest income which were added to his income by the Assessing Officer under section 144 of the Act. The primary contention revolved around the treatment of a substantial cash deposit as income from undisclosed sources.
The tribunal reviewed additional evidence related to the source of the cash deposits and, upon verification by the Assessing Officer, accepted that the deposits were derived from business receipts. Consequently, the addition related to cash deposits was deleted, affirming the business nature of the deposits. The ruling provides insights into the importance of maintaining and presenting substantial evidence in tax disputes.
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