"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 291/Ahd/2024 (िनधा[रण वष[ / Assessment Year : 2017-18) Daxaben Ashokkumar Dattani C/o. GG and Sons, Chakkuwali Chawl, R. P. Building, Nava Madhupura, Ahmedabad, Gujarat - 380004 बनाम/ Vs. Income Tax Officer Ward 1(2)(1), Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AIUPD9898H (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Prasad Rao Waghe Annasaheb, Sr. DR Date of Hearing 01/05/2025 Date of Pronouncement 20/06/2025 (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi dated 21.12.2023 passed under Section 250 of the Income Tax Act, 1961 ITA No. 291/Ahd/2024 [Daxaben Ashokkumar Dattani vs. ITO] A.Y. 2017-18 - 2 – (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2017-18. 2. The grounds raised by the assessee are as under: “1. The Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs 53,27,000/- on account of cash deposited in bank account u/s. 69A of the Act. Both the lower authorities have farther erred in upholding the above cash sales of Rs.53,27,000/- as alleged cash deposits us. 69A of the Act. 2. Both the lower authorities have failed to appreciate that bank statements are not books of account and addition cannot be made on the basis of bank statement. Moreover, S. 69A of the Act can only be invoked when books of account are maintained, and tax has been paid u/s. 44AD of the Act. 3. Alternatively, and without prejudice the impugned amount has already been offered as cash sales and adding the same u/s. 69A of the Act once again amounts to double taxation. 4. The Ld. CIT(A) has erred in law and on facts in invoking provisions of S.69A of the Act which is not at all applicable in the facts of the present case. He further erred in not appreciating that there is no income chargeable to tax in the case of the Appellant. 5. Alternatively, and without prejudice addition may kindly be limited to peak credit amount. 6. The Ld. CIT(A) has erred both in law and on the facts of the case in confirming the addition in spite of the fact that the Ld. AO did not appreciate necessary supporting documents produced by the Appellant in support of his submissions, which is in violation of the principles of natural justice. Both the lower authorities made such addition relying on limited books of accounts and did not even provide the Appellant further opportunity to submit the same to substantiate his claims. 7. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant which ought to have been considered before passing the impugned order. This action of the lower ITA No. 291/Ahd/2024 [Daxaben Ashokkumar Dattani vs. ITO] A.Y. 2017-18 - 3 – authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 8. The Ld. CITIA) has erred in law and on facts of the case in confirming action of the Ld. AO in charging interest us.234A/B/C/D of the Act. 9. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in levying penalty u/s. 271AAC of the Act. 10. The Ld. CIT(A) has erred in not considering various facts and in not appreciating the facts and law in their proper perspective. 11. The Appellant craves leave to add, amend, alter, edit, delete, modify, or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 3. The solitary issue in the present appeal relates to addition made to the income of the assesse on account of cash found deposited in the bank account amounting to Rs.53,27,000/- allegedly remaining unexplained. 4. The order of the Ld. CIT(A) reveals the facts noted and accepted by him pertaining to the impugned issue as being the assessee to be carrying out small business being in retail/semi retail of kirana items and raw herbs which is sold to hawkers and other very small traders. The majority of sale being in cash. Also the fact that the assessee did not maintain any books of accounts and filed return of income as per the presumptive scheme of taxation provided u/s.44AD of the Act. The gross turnover of the assesse as per the return of income filed was Rs.68,28,565/- on which she had declared income of Rs.5,35,052/- in terms of provision of Section 44AD of the Act. The above facts are ITA No. 291/Ahd/2024 [Daxaben Ashokkumar Dattani vs. ITO] A.Y. 2017-18 - 4 – recorded in the order of the Ld. CIT(A) and there is no dispute vis-à-vis the above. 5. The contention of the Ld. Counsel for the assessee before us was that in the light of the above facts, where assessee had not maintained any books of accounts and the cash deposited in the bank account was less than the turnover of the assessee, there was no case at all for treating the same as unexplained. 6. We are in agreement with the Ld. Counsel for the assesse in this regard. Undisputedly, the assessee had filed return of income declaring income on presumptive basis @ 8% of her turnover in terms of the provisions of Section 44AD of the Act. The same stood accepted by the AO also. There is no dispute with regards the provision of law that no books of accounts are required to be maintained by assesses filing returns u/s 44AD of the Act. The income returned u/s 44AD of the Act being accepted by the AO it follows therefore that the AO had accepted the turnover on which profits were so returned. Further, as pointed out by the Ld. Counsel for the assessee, the cash deposited in the bank account of the assessee of Rs.53,27,000/- was far less than the turnover reflected by the assesse of Rs.68,28,565/-, on which, she had declared income as per Section 44AD of the Act of Rs.5,85,552/-. The Ld. CIT(A), in principle, having accepted the fact that the assesse was a small trader in kirana items, with its customers mainly being small hawkers to whom undoubtedly all sales are made in cash, the preponderance of probability undoubtedly in the ITA No. 291/Ahd/2024 [Daxaben Ashokkumar Dattani vs. ITO] A.Y. 2017-18 - 5 – present case is that the majority sales made by the assessee or in fact entire sales made by the assesse during the impugned year was in cash. The assessee, we have noted also, explained that the entire sales made during the year was out of the old stock remaining since the business was originally run by her husband who had since deceased and she had taken over the business which ultimately was wound up in succeeding years. She had also pointed out that purchases amounting to only Rs.10,81,587/- had been made during the year which was paid for through banking channels and the same was evidenced by the assessee also by producing copy of the bank statement. In the light of the same, we find that the assesse had reasonably justified the cash available with her for deposit in the bank account in the entire year as out of its business proceeds, having not incurred any expense in cash. The onus on the assessee to explain the source of cash deposited in bank, we hold, was duly discharged and there was no reason absolutely for making any addition of the cash deposit as being out of unexplained sources. 7. The basis for making the impugned addition by the Ld. CIT(A), we find, is the analysis of the quantum cash deposited by the assesse during the different periods of the year i.e. pre- demonetization and post demonetization. The Ld. CIT(A) noted huge amount of cash deposited during the demonetization period, but, this fact alone does not render the entire cash deposits made by the assessee during the impugned year as from unexplained sources. Moreover, having accepted the fact that the assesse was ITA No. 291/Ahd/2024 [Daxaben Ashokkumar Dattani vs. ITO] A.Y. 2017-18 - 6 – not required to maintain books of accounts as per law that and having accepted the turnover on which profits were returned by the assesse as per law and the facts demonstrating that the assessee’s business was small and entirely done in cash and the cash deposited by the assesse in the bank account was less than the turnover of the assesse, there could not have been any adverse inference reached on the basis of the above facts so as to treat the cash deposits as being out of unexplained sources. On the contrary, the only reasonable conclusion that could have been drawn was that the cash deposits were out of the business receipts of the assessee. 8. In the light of the same, we see no reason to confirm the order of the Ld. CIT(A) upholding the addition made by the AO of the cash deposited in the bank account of the assessee amounting to Rs.53,27,000/-. The impugned addition made is accordingly directed to be deleted. 9. In the result, appeal filed by the assessee is allowed. This Order pronounced on 20/06/2025 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 20/06/2025 S. K. SINHA True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- ITA No. 291/Ahd/2024 [Daxaben Ashokkumar Dattani vs. ITO] A.Y. 2017-18 - 7 – 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "