JAY PRAKASH SARASWAT,MATHURA vs. INCOME TAX OFFICER 1(3)(1), MATHURA

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ITA 238/AGR/2026Status: DisposedITAT Agra02 June 2026AY 2012-133 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that Section 44AD of the Act applies, mandating an 8% profit rate on the business receipts. Therefore, the profit should be calculated at 8% of the cash deposits, not 30%.

What were the facts?

The assessee's return declared a total income of Rs. 1,87,750. After reassessment proceedings, cash deposits of Rs. 26,00,250 were added as unexplained. The CIT(A) set aside the assessment, and in the second round, the AO estimated profit at 30% on these deposits.

What were the issues?

The primary issue was the correctness of the profit estimation by the AO on unexplained cash deposits. The applicability of Section 44AD for presumptive taxation was also a key consideration.

Which sections of the Income-tax Act were involved?

Section 144,Section 148,Section 44AD,Section 250,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH “SMC”: AGRA

For Appellant: Shri M. M. Agarwal, CA
For Respondent: Shri Anil Kumar, Sr. DR
Hearing: 20/05/2026Pronounced: 02/06/2026
1.

The appeal in ITA No. 238/AGR/2026 for AY 2012-13, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 17.02.2026 against the order of assessment passed u/s 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 26.11.2025 by the Assessing Officer, KNP- W-(75)(91) (hereinafter referred to as ‘ld. AO’).

2.

The Ground No. 6 raised by the assessee is as whether the ld CIT(A) was justified in setting aside the assessment to the file of the ld AO in the facts and circumstances of the instant case.

3.

I have heard the rival submissions and perused the material available on record. The return of Income for AY 2012-13 was originally filed u/s 139(1) of the Act on 30.03.2013, declaring total income of Rs. 1,87,750/-. The notice u/s 148 of the Act was issued on 26.03.2019, which culminated

ITA No. 238/AGR/2026 Jay Prakash Saraswat

in framing of ex parte reassessment order on 16.11.2019, wherein the cash deposits of Rs. 26,00,250/- was added as unexplained. The said assessment order was set aside by the ld CIT(A) vide order dated 30.01.2025 to the file of the ld AO. In the second round of proceedings before the ld AO, the assessee responded to the notices issued by the ld AO and submitted its plea that there was cash withdrawals from the same bank account during the year to the tune of Rs. 27,22,100/- which would explain the source for cash deposits of Rs. 26,00,250/- without prejudice basis, assessee pleaded for adoption of profit percentage @ 8% as prescribed in Section 44AD of the Act or to works out the peak credit and make addition to the business income thereon. It was also pleaded by the assessee that the entire activities had emanated only out of gardening items. The assessee also placed on record that assessee was granted loan under Pradhan Mantri Rozgar Yojna scheme for his business to justify the fact of existence and carrying on business. The ld AO observed that the entire deposits in the bank account emanated only out of business activities of the assessee and proceeded to estimate the net profit @30% thereon and made an addition of Rs. 7,80,075/- to the business income of the assessee and completed the assessment u/s 144 r.w.s. 250 r.w.s. 144B of the Act on 26.11.2025 in the second round. Having held that the cash deposits made in the bank account represent only the business receipts of the assessee, the short question that arises for my consideration is whether determination of profit @30% would be justified or not. I find the provisions of Section 44AD of the Act gets into operation and wherein 8% profit has been provided in the statue. Hence, I hold that only 8% of Rs. 26,00,250/- profit should be considered to be the total income of the assessee. The assessee had also disclosed the net profit taxable income of Rs. 18,79,750 in the return. Hence, I hold that the total income of the assessee should be determined at Rs. 2,08,020 which is @ 8% of

ITA No. 238/AGR/2026 Jay Prakash Saraswat

26,00,250 for AY 2012-13. Ground No. 6 raised by the assessee is partly allowed. Since, the relief is partially granted on merits, adjudication of other grounds become academic in nature and they are left open.

4.

In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 02/06/2026.

-Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 02/06/2026 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, AGRA BENCH

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