Facts
The assessee filed a return of income, but the case was reopened after the assessee deposited Rs. 32.53 Lacs during demonetization, which she claimed represented sales proceeds from her PDS depot. The AO added these deposits as unexplained money under section 69A. The CIT(A) did not admit the appeal due to a delay.
Held
The Tribunal held that the delay should have been condoned and that the deposits represented business receipts from the assessee's fair price shop. The Tribunal directed the AO to estimate a presumptive business income of 8% on these deposits, reducing the income already offered by the assessee.
Key Issues
Whether the cash deposits during demonetization, claimed as business receipts from a PDS depot, could be treated as unexplained income, and whether the delay in filing the appeal before CIT(A) should be condoned.
Sections Cited
147, 144B, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year: 2017-18) Ms. Babli Devi ITO, Mandi (D/o Mool Singh) बनाम/ District Mandi Village Narla, P.O.Kunnu, Tehsil Padhar HP-175001. Vs. District Mandi (HP) 175012 �थायीलेखासं./जीआइआरसं./PAN/GIR No. BLEPD-5225-Q (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Sh. Gaurav Thakur, (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 08-04-2025 घोषणाकीतारीख /Date of Pronouncement : 21-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 07-09-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s. 144B of the Act on 27-03-2022. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.32.53 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
The assessee filed return of income declaring income of Rs.0.47 Lacs. However, the case was reopened and the assessee declared income of Rs.2.28 Lacs. It transpired that the assessee despoiled cash of Rs.32.53 Lacs in her bank account during demonetization. The assessee stated that she was engaged in PDS (Public Distribution System) and the cash deposits represent sales proceeds of PDS depot. The assessee purchase goods from state civil supplies corporation and sold the same to customers covered under PDS scheme. However, Ld. AO added the deposits as unexplained money u/s 69A. The Ld. CIT(A) did not admit the appeal for want of condonation of 118 days. Aggrieved, the assessee is in further appeal before us.
In our considered opinion, having regard to the background of the assessee, the delay should have been condoned by Ld. CIT(A). Nevertheless, the document on record would show that the assessee is a fair price shop authorized dealer. It has purchased goods from state civil supplies corporation and sold them to eligible customers. The sales proceeds have been deposited in the bank account which has been transferred to HP State Civil Supplies Corporation Ltd. towards purchase of goods. It is amply demonstrated that the deposits represent business receipts for the assessee. On these facts, we direct Ld. AO to estimate presumptive business income of 8% on these deposits. The business income as already offered by the assessee shall be reduced from this estimation.
4 The appeal stand partly allowed in terms of our above order. Order pronounced on 21-04-2025.