SAHIL PHUTELA,AMBALA CITY vs. INCOME TAX OFFICER, WARD-4, AMBALA, AMBALA

The assessee carried out business in the name of Shri Paramhans Traders and declared income for Rs.4.63 Lacs. It transpired that the assessee deposited cash of Rs.30.17 Lacs in its SBI Bank account and accordingly, the case was reopened. The assessee failed to make any effective representation and accordingly, Ld. AO added the deposits u/s 69A. The Ld. CIT(A) confirmed the assessment for the same very reasons against which the assessee is in further appeal before us.

From case records, it emerges that the assessee is engaged in retail trading wherein most of the sales happen in cash. The assessee is subjected to VAT and it has duly maintained the cash book for its business. The cash deposits are sourced out of cash generated by the assessee in its business. The sales turnover of the assessee is evidenced by VAT returns as placed on record. The assessee regularly deposit cash in the bank account owing to nature of its business. On these facts, entire deposits could not be held to be unaccounted money of the assessee. Since the assessee has remained non-compliant and failed to fully substantiate its claim, to plug any possible leakage of revenue, we confirm lumpsum addition of Rs.2 Lacs as business income over and above the regular income as declared by the assessee. The remaining addition stand deleted. The Ld. AO is directed to re-compute the income of the assessee. No other ground has been urged in the appeal.