2025 (11) TMI 1482 - AT - Income Tax

Section 68 addition deleted as cash deposits accepted as explained business receipts; basis for invoking Section 145(3) rejected

ITAT Ahmedabad deleted the addition made u/s 68 towards alleged unexplained cash deposits and rejected the basis for invoking s.145(3). The assessee had ... Addition made u/s 68 - cash deposits as unexplained cash credits - rejection of books of account u/s 145(3) - HELD THAT:- Assessee has furnished detailed submission before the Revenue authorities and explained clearly that the money has been received from the debtors to whom sale have been made in the past. The assessee has also attached the bifurcation amount showing from whom such money has been received along with the outstanding that was received from such parties. These details have not been disputed by the revenue authorities, and no contrary evidence has been brought on record. Thus, we find merit in the explanation furnished by the assessee. Accordingly, the addition made by the Assessing Officer is deleted, and the appeal of the assessee is allowed The appeal concerned an addition of Rs. 25,66,000/- made under Section 68 of the Income-tax Act, 1961 on account of cash deposits in the assessee's bank account and the rejection of books of account under Section 145(3). The Assessing Officer treated the cash deposits as unexplained cash credits. The assessee, however, submitted detailed explanations before the authorities, asserting that the cash represented receipts from debtors against past sales. A bifurcation of the Rs. 25,66,000/- was furnished, identifying each party and corresponding outstanding amounts realized. The appellate authority noted that these details were not disputed by the Revenue and that no contrary evidence was brought on record. Given the specific facts and absence of rebuttal, the Tribunal accepted the assessee's explanation, held the requirements of Section 68 to be satisfied, deleted the addition, and thereby allowed the assessee's appeal.