Case Number: ITA 413/DEL/2019
Appellant: Jai Bhagwan, Panipat
Respondent: ITO, Ward-2, Panipat
Assessment Year: 2009-10
Case Filed On: 2019-01-21
Order Type: Final Tribunal Order
Date of Order: 2023-02-14
Pronounced On: 2023-02-14
Jai Bhagwan, a resident of Panipat, filed an appeal against the order dated 20.11.2018 of the Learned Commissioner of Income-Tax (Appeals), Karnal, pertaining to the assessment year 2009-10. The dispute in the appeal centered around an addition of Rs. 10,50,368 made by the assessing officer, treating the unexplained cash deposits in the bank as business receipts and computing the net profit at 8%.
The case was heard by the Delhi Bench “SMC” of the Income Tax Appellate Tribunal (ITAT), presided over by Shri Kul Bharat, Judicial Member. The appellant was represented by Shri Jai Bhagwan Sharma, Advocate, while the respondent was represented by Ms. Maimum Alam, Senior Departmental Representative (DR).
The assessing officer noticed that the appellant, Jai Bhagwan, had deposited Rs. 1,73,30,000 in his savings bank account during the assessment year under consideration. Consequently, the case was reopened under Section 147 of the Income Tax Act, 1961. In response to the statutory notice, the authorized representative of the assessee attended the proceedings. The assessing officer treated the bank deposits as business receipts and made an addition by estimating the net profit at 8%, resulting in an assessed income of Rs. 10,50,368.
The appellant challenged this decision before the Commissioner (Appeals), who dismissed the appeal. Subsequently, the appellant filed an appeal before the ITAT.
During the hearing, the Tribunal reviewed the submissions and evidence presented by both parties. The Judicial Member, Shri Kul Bharat, noted that the appellant’s authorized representative had attended the assessment proceedings and had sought adjournment without raising any objection regarding the non-service of notice. The Revenue also placed on record the dispatch register of the notice, indicating that it was served to the appellant.
The appellant argued that the assessing officer incorrectly treated the cash deposits as business receipts, whereas the deposits included amounts received from the sale of agricultural land by the appellant’s mother and cash withdrawals from the same bank account. The appellant provided evidence of the sale deed and agreement to sell to substantiate the claim.
However, the Commissioner (Appeals) had failed to consider these explanations adequately, leading to the Tribunal’s intervention.
The Tribunal found that the authorities below had not properly appreciated the evidence provided by the appellant, which clearly explained the sources of the cash deposits. The Tribunal observed that the assessing officer had incorrectly classified the deposits as business receipts without considering the factual evidence that supported the appellant’s claims. Therefore, the addition made by the assessing officer was deleted.
The Tribunal allowed the appeal filed by Jai Bhagwan, setting aside the additions made by the assessing officer and confirmed by the Commissioner (Appeals). The decision was pronounced in the open court on 14th February, 2023.
Members of the Tribunal:
Kul Bharat, Judicial Member
For more information on similar cases and legal precedents, visit the official website of the Income Tax Appellate Tribunal of India.
Jai Bhagwan vs ITO: Dispute Over Unexplained Cash Deposits – ITA 413/DEL/2019
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