DURYODHAN PATRA,ASTARANGA vs. ITO, PURI WARD, PURI

The assessee has raised the following grounds of appeal:

The appeal is time barred by 101 days. The assessee has filed condonation petition dated 20.12.2019 stating the reasons for condonation of delay. After considering the petition and submissions of the parties, I am of the view that the assessee was prevented by sufficient cause for filing the appeal late. Hence, I condone the delay and admit the appeal for adjudication.

Facts in brief are that the assessee derives income from trading and sale of tarpolin. He filed his return of income on 18.3.2017 disclosing a taxable income of Rs.6,35,860/-. During the assessment proceedings, the Assessing Officer noticed that the assessee had shown a gross turnover of Rs.90,14,812/- and net profit shown u/s.44AD of Rs.7,21,288/-. The AO also noticed that the assessee had four bank accounts and the total credits comes to Rs.1,92,20,197/-. The Assessing Officer required the assessee to explain the source of these bank credits. The assessee submitted that these are bank transfers by virtue of withdrawal from one account and deposit in another account. The AO also after considering the list furnished by the assessee, which is explained by the assessee, found that Rs.18,80,000/- is bank transfer. Hence, the AO reduced the credits Rs.1,92,20,197 – Rs.18,80,000/- = Rs.1,73,40,197/- and treated the same as total turnover of the assessee. Since the assessee had not got his accounts audited, applying the provisions of section 44AD, the AO

On appeal, the ld CIT(A) confirmed the addition made by the Assessing Officer.

Before me, ld counsel for the assessee submitted that the authorities below have not taken into consideration the deposits and withdrawals of all bank accounts. Ld counsel for the assessee also furnished a reconciliation statement showing deposits and withdrawals, wherefrom it reveals that the total deposits is at Rs.1,50,95,634/- and withdrawals at Rs.1,21,68,500/-.

Replying to above, ld D.R. supported the orders of lower authorities.

On consideration of the rival submissions, I observe that the Assessing Officer has taken total credits made in four bank accounts as gross turnover at Rs.1,73,40,197/- as against the turnover disclosed by the P a g e 3 | 5 38/CTK/201 9 Assessm ent Y ear : 20 16- 17 assessee at Rs.90,14,812/- and the assessment order was passed on the enhanced turnover of Rs.1,73,40,197/- and net profit @ 8% was determined. The action of the AO was confirmed in first appeal. Now, before the Tribunal, the assessee has filed reconciliation statement showing all deposits and withdrawals made in all bank accounts, wherein, it is revealed that total deposits is Rs.1,50,95,634/- and total withdrawals is Rs.1,21,68,500/-. From the above, it will be just and proper to remand the issue back to the file of the AO for proper verification of the reconciliation furnished by the assessee vis-à-vis the bank statement to be furnished by the assessee and determine the accurate turnover of the assessee and then determine the net profit @ 8% on the turnover after the reconciliation. The AO is directed accordingly.

In the result, appeal of the assessee is allowed for statistical purposes.