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Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SRI RAJPAL YADAV & DR. MANISH BORAD
order : February 9th, 2024 ORDER Per Rajpal Yadav, Vice-President (KZ): The assessee is in appeal before the Tribunal against the order of Commissioner of Income Tax (Appeals)-NFAC, Delhi [in short ld. 'CIT(A)'] dated 15.03.2023 passed for AY 2017-18. 2. The assessee has raised six grounds of appeal. However, in the prayer, he has pleaded as under: a) Addition of cash deposit during the demonetization period of Rs. 3,57,657/- be deleted.
I.T.A. No.: 114/PAT/2023 Assessment Year: 2017-18 Sanjib Kumar Singh Jha. b) Addition of Rs. 1,55,561/- being 4.12% gross profit on unaccounted sales of Rs. 37,75,753/- be deleted.
With the assistance of ld. representatives, we have gone through the record carefully. The assessee has filed his return of income electronically on 24.03.2018 declaring total income of Rs. 4,10,520/-. The case of the assessee was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued and served upon the assessee. The assessee at the relevant time was engaged in sale of SIM cards and vouchers. According to the Assessing Officer (in short ld. 'AO'), assessee has deposited Rs. 16,96,000/- in saving bank account during the period 09.11.2016 to 30.12.2016. According to him, assessee has an opening balance of Rs. 13,36,343/-. Therefore, the difference between the opening balance vis-à-vis the amounts deposited in the bank account has been treated by the AO as unexplained. He accordingly, made an addition of Rs. 3,59,657/-.
Dissatisfied with the above, assessee carried the matter in appeal before ld. CIT(A). But, the appeal of the assessee has been dismissed for want of prosecution without deciding any issue on merit.
On due consideration of the above facts, we are of the view that there is no justification at the end of the AO to make addition of Rs. 3,59,657/-. Since demonetization has taken place, there might be past saving with the family, not only with the assessee but, with other family members also. Therefore, a small deposit of Rs. 3,59,657/- cannot be treated as unexplained by simply comparing it with the cash balance available in the proprietorship concern of the assessee where he has been carrying out sale of SIM cards and vouchers. Therefore, we delete this addition and allow this ground of appeal
6. In the next ground, assessee has pleaded that ld. AO has erred in making addition of Rs. 1,55,561/-. As observed earlier, appeal of the assessee was dismissed by ld. CIT(A) ex-parte for want of prosecution. We find that ld. AO has simply compared the sales of the assessee with the bank deposit. But that is not a correct method of determining the sales of an assessee. The books of accounts of the assessee are audited. He has not pointed out specific