BABLI DEVI,VILLAGE NARLA, P.O. KUNNU vs. INCOME TAX OFFICER, AAYAKAR BHAWAN, BHIULI

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. 3. 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.