ASST. COMMISSIONER INCOME TAX, NOIDA vs. DOONVALLEY TECHNOPOLIS PRIVATE LIMITED, NOIDA
Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRIS.RIFAUR RAHMANACIT, vs.
PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :
The Revenue has filed appeal against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 25.09.2023 for the Assessment Year 2017-18. 2. None appeared on behalf of the assessee. Considering the issue on record, we proceed to decide the appeal with the assistance of ld. DR of the Revenue.
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3. At the time of hearing, ld. DR of the Revenue brought to our notice the facts on record. Brief facts of the case are, the case of the assessee was selected for scrutiny through CASS for AY 2017-18. Accordingly, notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for short ‘the Act’) were issued to the assessee. However, there was no compliance from the assessee side. The Assessing Officer collected the information from Axis Bank and Punjab National Bank and based on the information submitted by the banks, he observed that the assessee has gross receipts of Rs.17,65,21,527/- and a separate notice u/s 142(1) dated
10.10.2019 was issued to the assessee why the business loss amounting to Rs.(-)7,04,22,156/- should not be disallowed and profit be estimated @
8% and also intimated to the assessee that the assessee has made total cash deposit of Rs.5,26,03,725/- and the same should not be added u/s 68
of the Act. Since there was no compliance from the assessee side, the Assessing Officer proceeded to make the addition of Rs.1,41,21,722/- i.e.
8% of the gross receipt. Further the Assessing Officer made addition u/s 68 of the Act to the extent of cash deposit made during the impugned year to the extent of Rs.2,58,92,607/-.
4. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT (A) and filed grounds of appeal objecting to the rejection of books and estimating the income @ 8% and also raised the addition made u/s 68
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of the Act. Even during appellate proceedings, several notices were issued to the assessee but assessee has not complied to the notices. Ld.
CIT (A) proceeded to dispose of the appeal based on the material available on record. After considering the material available on record, ld. CIT (A) rejected ground no.1 raised by the assessee against the rejection of books and estimating the income @ 8%, accordingly sustained the addition of Rs.1,41,21,722/- @ 8% of the gross receipt and rejected the loss returned by the assessee of Rs. 7,04,22,156/-. With regard to ground no.2 raised by the assessee, ld. CIT (A) observed that the Assessing Officer has made addition with the observation that the assessee was continuously seeking adjournment and did not file any details including production of books of account. He further observed that the assessee contended that assessee is in hospitality/hotel business and daily cash receipt in the business is deposited in the bank account on routine basis. It was pleaded that the cash deposited in the impugned assessment year is less than the cash deposited in the preceding assessment year. Since the assessee is in hospitability business which is prone to receiving cash from the customers should have been examined by the Assessing Officer. Further he observed that the cash received was already offered as part of the turnover/sales on which the Assessing
Officer has already estimated the income @ 8%. In his considered
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opinion, the addition made by the Assessing Officer for the cash deposited was not warranted. Accordingly, he allowed ground no.2
raised by the assessee.
5. Aggrieved with the above order, Revenue is in appeal before us raising following grounds of appeal :-
“1. That the CIT(Appeals)/NFAC has erred in law and on facts by deleting the additions of Rs.2,58,92,607/- made by the AO on account of unexplained cash credits u/s 68 of the Income Tax Act, 1961 without appreciating the facts of the case as mentioned by the AO in the assessment order.
That the Ld. CIT(Appeals)/NFAC has erred in law and on facts in deleting the additions of Rs. 2,58,92,607/- u/s 68 of the Act without verification on his own or even without remanding the issues to AO for. verification even though CIT(A) has powers under section 250(4) of the Income Tax Act, 1961 to do so.
That the Ld. CIT(Appeals)/NFAC has erred in law and on facts in deleting the addition of Rs. 2,58,92,607/- without appreciating the fact that the assessee has neither made proper compliance of hearing notices either before the Assessing Officer or before the Appellate authority i.e. CIT(A)/NFAC itself.
That the Ld. CIT(Appeals)/NFAC has erred in law and on facts in not appreciating the facts that even if the assessee's contention that the soft copies of books of accounts getting corrupted is accepted, there is no reason available on record behind non-production of original bills/vouchers of all receipts, expenses and related to cash receipts/credits.
That the order of CIT(Appeals) being erroneous in law and on facts deserves either to be set aside/cancelled, or to be remanded back to the file of CIT(A)-NFAC or to the Assessing Officer for fresh adjudication as the cash deposit in bank account still remains unverified.”
Considered the submissions of the ld. DR of the Revenue and material available on record. We observe that the Assessing Officer has estimated the income of the assessee due to non-compliance and he collected the information from the banks, observed that the assessee has made gross receipts of Rs.17,65,21,527/- and estimated the income @ 8% by 5 rejecting the books of account and also rejected the loss claimed by the assessee. The Assessing Officer further proceeded to add cash deposits made by the assessee in their bank accounts. We observe that the Assessing Officer has collected the information from banks. This is the source of information to estimate the income and the same gross receipts which include cash deposits also. The Assessing Officer cannot make double addition on the same issue of gross receipts as well as separately for cash deposits. It is also observed that assessee is in hospitality/hotel business and there is possibility of continuous cash receipts from the customers. Therefore, the accumulated cash was deposited by the assessee regularly. Therefore, after considering the findings of the ld. CIT (A), we do not see any reason to disturb the findings. 7. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on this 23rd day of June, 2025 after the conclusion of the hearing. (SATBEER SINGH GODARA) ACCOUNTANT MEMBER
Dated: 22.09.2025
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ITA No.3224/DEL/2023