RAIPUR (India CSR): The Income Tax Appellate Tribunal (ITAT) Raipur Bench has cancelled a Rs. 4.21 lakh tax addition made against Raigarh businessman Tekchand Punjabi. The tribunal ruled that the tax department failed to prove the cash deposit was from undisclosed income.
The case involved a cash deposit of Rs. 4,21,874 in Punjabi’s bank account in 2015. He explained that the money came from a Rs. 5 lakh withdrawal made earlier through a bearer cheque issued to his employee Prem Shankar. However, the Assessing Officer (AO) and CIT(A)/NFAC rejected the explanation and added the amount as unexplained money under Section 69A of the Income Tax Act.
The Tribunal, led by Judicial Member Partha Sarathi Chaudhury, said the authorities acted on suspicion and ignored evidence. It noted that the department had not shown any proof that the money came from hidden sources. The affidavit filed by the employee should have been verified properly before rejecting it.
As a result, the ITAT set aside the earlier orders and allowed the appeal in favour of the taxpayer.
Excerpts from the Order:
“The AO added the amount on mere suspicion. The CIT(A)’s action without checking the facts is arbitrary and bad in law.” — ITAT Raipur Bench
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