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Facts
The assessee's assessment was reopened due to a significant difference between the deposited sum in the bank and the declared turnover in the ITR, with the sources remaining unexplained. The Assessing Officer (AO) estimated profit at 8% on the difference of Rs. 1,48,48,211/-.
Held
The Tribunal upheld the CIT(A)'s decision to estimate profit at 8% on the unexplained credit. The Tribunal found no new facts to controvert the CIT(A)'s findings and therefore dismissed the revenue's appeal.
Key Issues
Whether the CIT(A) erred in estimating profit at 8% on unexplained credit when the assessee failed to discharge its onus to prove the facts and reconcile the difference.
Sections Cited
250, 147, 144, 69A, 69
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Income Tax Appellate Tribunal, “C” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN & HON’BLE SHRI GIRISH AGRAWAL
Date of Hearing 30.09.2025 Date of Pronouncement 02.12.2025 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 11.04.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2016-17. The grounds are reproduce as below:
“1. On the facts & in the circumstances of the case and in law, the Ld. CIT(A) erred in directing to estimate the profit @ 8% of unexplained credit of Rs. 1,48,48,211/-, even though in para 5.3 of the appeal, the CIT(A) has categorically accepted that the assessee has failed to prove or rebut with cogent evidence against findings of the A.O. in the assessment order.
On the facts & in the circumstances of the case and in law, the Ld. CIT(A), being the first fact finding authority, erred to ascertain the corrects facts in respect of unexplained credit of Rs. 1,48,48,211/-, and bring it to a logical conclusion.
3. The order of the CIT(A) may be vacated & and that of the Assessing Officer may be restored.
4. The appellant craves leave to add, amend, alter or delete any ground of appeal.
2. As per the facts of the case the assessment in this case was completed but later on it was reopened since the assessee could not reply to all the notices served by the Ld.AO for re-opening, consequently assessment was completed u/s 147 r.w.s. 144 of the Act by making the addition of Rs. 1,48,48,211/- u/s 69A of the Income Tax Act.
The main issued was that the assessee deposited a sum of Rs. 2,38,25,757/-, whereas the turnover as reflected in the ITR was Rs. 55,76,000/- and the sources remained unexplained. The AO had reasons to believe because assessee had not filed the return of income despite having taxable income. Therefore assessment was re- opened.
Since the assessee could not discharged its onus to prove the facts, although as per bank account there were cash withdrawal and subsequent cash deposit however the assessee failed to submitted the entry wise narration and could not reconcile, therefore, the AO was directed to estimate the profit @8% on the difference amount of Rs. 1,48,48,211/-.
Aggrieved by this order, revenue preferred appeal before us on the grounds mentioned herein above.
Both the grounds raised by the revenue are interconnected and interrelated and relates to challenging the order of Ld. CIT(A) in estimating the profit @ 8% of unexplained credit of Rs. 1,48,48,211/-, therefore we have decided to adjudicate these grounds through the present consolidated order.
We have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. As per Ld.AO, the turnover reflected in ITR was Rs. 98,66,168/- and the total deposit in the bank were reflected at Rs. 2,38,25,757/- which remained unexplained/undisclosed. Therefore, the difference of Rs. 1,48,48,211/- was treated and assessed as unexplained money u/s 69 of the Act.
On the contrary the stand of the assessee was that he has already offered turnover amounting to Rs. 55,76,000/- and differential amount of Rs. 1,48,48,211/- is added as income u/s 69A of the Act. Therefore, the turnover difference as per bank statement and ITR is only Rs. 38,25,835/- accordingly income @8% of Rs. 38,25,835/- could be added.
It is an undisputed fact that it is established by the appellant that he had undertaken business during the year and on the other hand, the AO has not brought out any material on record to establish that the difference amount is from unexplained sources.
And even the assessee had accepted variation to the extent of Rs. 38,20,835/- in the reconciliation.
Since from the copy of bank account there were cash withdrawals and subsequent cash deposit and assessee failed to submit the entry wise narration for the withdrawal and re-deposit. In this way assessee had not discharged its onus therefore, under such circumstances AO was directed to estimate profit @ 8% on the difference amount of Rs. 1,48,48,211/-.
Even otherwise no new facts or circumstances have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, we see no reasons to interfere into or to deviate from the lawful findings so recorded by Ld. CIT(A). Hence, the ground raised and by the revenue stands dismissed.
In the result, the appeal filed by the revenue stands dismissed.
Order pronounced in the open court on 02.12.2025