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Facts
The assessee, engaged in textile trading, filed their return for AY 2017-18. The AO made additions to the total income based on a difference between reported turnover and bank deposits, and unexplained cash deposits during demonetization. The CIT(A) confirmed the addition related to unexplained credits.
Held
The Tribunal found that the AO had accepted the turnover and sale proceeds, making the rejection of consideration received as non-genuine contradictory. They also noted that cash deposits, advances, and inter-bank transfers were not disputed by the CIT(A).
Key Issues
Whether the additions made by the AO on account of difference in turnover/bank deposits and unexplained cash credits are justified, and consequently, if the penalty levied is sustainable.
Sections Cited
68, 271AAC
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & HON’BLE SHRI JAGADISH
O R D E R MANU KUMAR GIRI (Judicial Member) The captioned appeals filed by the assessee are directed against the orders of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 30.08.2024 and 24.09.2024 for Assessment Year 2017-2018. 2. The registry has noted delay of 19 days in filing the appeal. Considering the reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication.
& 32/Chny/2024. 3. Brief facts of the Appeal No.2931/Chny/2024 are as under: The assessee is engaged in the trading of textile items and has filed the return of income for AY 2017-18 on 30.10.2017 admitting a net total income of Rs.4,38,270/- Subsequently, the case was selected for scrutiny through CASS for the reason of ‘cash deposit during the year’. The AO made an addition of Rs.4,47,07,222/- to the total income of the assessee on the following grounds:
(a) The difference between the reported turnover of Rs.4,47,07,222/- and the total of bank deposits Rs.5,65,51,427/- being Rs.1,18,44,205/- as sales and computed income @1.24% thereon at Rs.1,47,617/-; (b) Cash deposits of Rs.19,20,000/- made during demonetisation period as unexplained credits u/s 68 of the Act. The assessee challenged the order of the AO before the ld. CIT(A). The ld. CIT(A) confirmed the addition of Rs.19,20,000/- as unexplained credits u/s 68of the Act. Aggrieved assessee is in appeal before us.
4. The ld. counsel for the assessee submitted the difference in amount are due to deposit of cash in hand into the bank account, advances received from the customers and inter-bank fund transfers. The AO treated transaction on these account as turnover. The ld. counsel taken us through the chart showing consistency in business in preceding years and subsequent years.
5. Per contra, the ld. DR, vehemently supported the impugned order of the ld. CIT(A) and prayed for the dismissal of the appeal of the assessee. He further contended that despite having ample opportunities before the ld. CIT(A), the assessee did not furnish anything in support of the contentions made before the Tribunal.