LATHA,CHENNAI vs. ITO, NON-CORP. WARD-22(1), CHENNAI

Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2020-21, the assessee filed her return of income on 14.02.2021 declaring a total income of Rs.5,84,650/- and business turnover of Rs.4,41,79,577/-. Based on information received regarding cash deposits aggregating to Rs.7,38,05,000/-, the AO reopened the assessment by issuing a notice u/s.148 of the Act. In response, the assessee filed a revised return declaring a business turnover of Rs.7,44,00,077/-. During the reassessment proceedings, the AO issued a show-cause notice proposing rejection of the books of account. As the assessee failed to comply with the statutory notices, the AO rejected the books of account and completed the assessment by estimating the business income at 8% of the total turnover of Rs,7,44,00,077/-, resulting in an addition of Rs.59,56,006/-.

Aggrieved, assessee is in appeal before us. The Ld. AR submitted that the assessee is engaged in the wholesale and retail trade of rice and that the impugned cash deposits represented business receipts from such trade. It was contended that the assessee had raised the same plea before the First Appellate Authority; however, the supporting documents could not be uploaded on the e-filing portal at that point of time, as the books of account and other records were voluminous in nature. The Ld. AR, therefore, pleaded that one more opportunity may be granted to the assessee to produce all the relevant books of account and documentary evidence before the Assessing Officer for proper adjudication of the issue.

The Ld.DR submitted that adequate opportunities were provided from the offices of the FAA & AO and there is no violation of

We have heard the rival submissions and perused the material available on record. We find that the assessment was completed ex- parte under the best judgment provisions, as the assessee failed to comply with the statutory notices issued by the AO. Consequently, the AO rejected the books of account and estimated the income by applying a profit rate of 8% on the total turnover declared by the assessee. We further note that, before the First Appellate Authority, although the assessee had contended that the cash deposits represented sale proceeds from her business, no supporting documentary evidence was furnished. Accordingly, the FAA rejected the claim and dismissed the appeal. Before us, the Ld. AR submitted that the assessee is engaged in the wholesale and retail trade of rice and that the impugned cash deposits were nothing but business receipts. It was further explained that the assessee could not upload the supporting documents before the FAA as the books of account and other records being voluminous, could not be uploaded through the e-filing portal. We strongly deprecate the nonchalant attitude of the assessee in not responding to the statutory notices issued by both the AO and the FAA. Nevertheless, considering the explanation

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