The Division Bench of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench has held that no addition can be made under Section 69 of the Income Tax Act, 1961 when depositing money in the bank account.

The assessee, Dashrathbhai Shivabhai Chaudhary is engaged in cultivation and sale of milk and seeds. According to the information received, he deposited an amount of Rs. 21 lakhs with bank account. Being agro-agricultural and the agricultural income is exempt the assessee has not filed a return of income under section 139(1) of the Income Tax Act.

The Assessing Officer after recording the reasons under section 147 of the Income Tax Act and approval from the notice issuing authority under section 148 of the Income Tax Act which was submitted to the assessee. The assessee therein filed a return of income revealing an income of nine thousand rupees and an agricultural income of five thousand roubles. The Assessing Officer made an addition under section 69 of the Income Tax Act in respect of the amount deposited with Dena Bank Ltd.

Counsel for the assessee submitted that the counsel had explained the details relating to 21 lakhs but the CIT(A) limited the relief to Rs. 10 lakhs even after giving all the evidence in support of the same amount.

The counsel also stated that the sum of Rs. 10 million was earned by the assessee from the sale of milk and seeds for which the assessee submitted invoices and invoices for the purchase of these items. In fact the CIT(A) accepted the business activities and income of the assessee.

Suchitra Kamble, Judicial Magistrate and Waseem Ahmed, Accounts Member observed that “The assessee has clarified through evidence during remand that the bank account deposit money. The CIT(A) and the Assessing Officer disagreed with the addition under section 69 of the Income Tax Act.

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Shri Dashrathbhai Shivabhai vs ITO

Counsel for the Appellant: Shri Dipen Shukhadia

Counsel for the Respondent: Shri Ramesh Kumar


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