SHYAM,DELHI vs. ITO, WARD-36(8), DELHI
Before: SHRI M. BALAGANESH
PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the CIT(A)/National Faceless Appeal Centre, (‘NFAC’ for short) dated 19/02/2024 for the Assessment Year 2017-18. 2. Brief facts of the case are that, the Department of Revenue found that the Assessee had deposited substantial cash in its bank account during the demonization period and has not filed Income Tax Return for the Assessment Year 2017-18. Notice u/s 142(1) of the Income Tax Act, 1961 (‘Act’ for short) was issued to the Assessee. The Assessee has not filed its return in response to the notice issued u/s 142(1) of the Act. An assessment order came to be passed u/s 144 of the Act vide order dated 18/12/2019 by making addition of Rs. 4,30,54,670/- u/s 69A of the Act. Aggrieved by the assessment order dated 18/12/2019, the Assessee preferred an Appeal before the Ld.
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19/02/2024
upheld/restricted the addition to Rs. 34,44,374/- by applying an ad- hoc rate of 8% of the total credit in the bank account of the Assessee thereby deleted the remaining addition. Aggrieved by the order of the Ld. CIT(A) dated 19/12/2024, the Assessee preferred the present
Appeal.
It is brought to the notice of the Bench that as against the deletion of partial addition, the Department of Revenue has not preferred any Appeal.
The Ld. Counsel for the Assessee submitted that the Ld. CIT(A) failed to appreciate that the cash depositedin the bank accounts extent of Rs. 2,80,19,466/- were explained out of cash withdrawals from the Bank, therefore, addition made and sustained on the said deposits is not in accordance with law. Further submitted that at the best rate of 8%could have been adopted on the deposit of Rs. 1,50,35,204/- and not on the entire amount. Thus, sought for restricting the addition @8% on the deposit of Rs. 1,50,35,205/-.
Per contra, the Ld. Departmental Representative vehemently submitted that the Assessee has not declared income from his business and also not filed return for the year under consideration. The Ld. Departmental Representative further submitted that the Assessee has not filed audited books of accounts, therefore, profit rate of 8% is rightly adopted by the Ld. CIT(A)for the nature of the 3 Shyam Vs. ITO transactions reflected throughAssessee’s books of accounts. Thus, sought for dismissal of the Appeal.
We have heard both the parties and perused the material available on record. The Ld. CIT(A) in Para 5.3.6 had observed that cash deposits were made out of cash withdrawals during the year. This may give a prima facie indication that the entire cash deposits remainedexplained by the Assessee. However, in Para 5.3.7 the Ld. CIT(A) categorically observes that the entire cash withdrawals and cash deposits made in the bank account represents business transactions of the Assessee. The Ld. CIT(A) in the same paragraph concluded that the total credits in the bank account represent business transactions of the Assessee and resorted to estimate the profit element which was estimated at 8%. There is also the possibility of cash deposits being emanated out of cash sales which has been duly appreciated by the Ld. CIT(A), thereby to include even the cash deposits as part of the total credits while estimating the profit at 8%. Hence we do not find any infirmity in the order of the Ld. CIT(A). 6. In the result, the Appeal of the Assessee is dismissed. Order pronounced in the open court on 09th May , 2025 (M. BALAGANESH) JUDICIAL MEMBER Date:- 09.05.2025 R.N, Sr.P.S*
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Shyam Vs. ITO