VEEYEMAR & CO.,CALICUT vs. ITO, WARD 1(3), KOZHIKODE

Brief facts of the case are that assessee is a partnership firm. Return of income for the AY 2017-18 was filed on 26/03/2018 disclosing income of Rs. 5,85,750/-. Subsequently, the AO formed an opinion that the income escaped assessment to tax and issued Meat Products of India Ltd. notice u/s. 148 of the Act on 05/07/2019. In response to the notice issued u/s. 148, the assessee filed return of income on 30/07/2019 declaring the same income as shown in original return of income. Against the said return of income, assessment was completed by the AO vide order dated 27/09/2021 passed u/s. 147 r.w.s. 144B of the Act at a total income of Rs. 42,26,563/-. While doing so, the AO made the addition of Rs. 36,40,813/- disbelieving the receipt of cash from debtors, as bogus.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal.

Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.

I find that during the course of assessment proceedings for the AY 2016-17, the AO reduced the cash in hand shown by the assessee of Rs. 90,22,069/- to 53,81,256/-. The AO disbelieved the version of the assessee that cash received from the debtors as bogus after examining them and issued notice u/s. 133(6) of the Act. Thus, the findings of the AO attained finality as the matter was settled under the Direct Tax Vivad Se Vishwas Scheme, 2024. The AO was of the opinion that inflated cash of Rs. 36,40,813/- which was shown for the year under consideration cannot be accepted. Therefore, the AO was justified in making the addition and added the same to the total income of the assessee as unexplained money.