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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Shri J. Sudhakar Reddy]
order
: March 4th, 2020 ORDER
Per J. Sudhakar Reddy, AM:
This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals), Burdwan [‘CIT(A)’ for short] dated 23.08.2019 u/s 250 of the Income Tax Act, 1961 (‘the Act’ for short) for AY 2010-11.
After hearing rival contentions, I find that the only grievance of the assessee is the quantification of the undisclosed sales. The AO considered all the cash deposits in the bank account held by the assessee with Central Bank of India, B.C. Road, Burdwan as undisclosed sales/gross receipts from business. 3. In other words, the total credits/gross deposits in this bank account were held as undisclosed sales and a percentage of the undisclosed sales has been brought to tax as profit. The contention of the assessee is that, the cash withdrawals from this bank account amounting to ₹16,47,092/- should be reduced by the gross deposits of ₹50,32,783/- and only the net figure should be taken as the undisclosed sale figure, as otherwise it would give a distorted figure. He wanted the peak deposit to be taken as the undisclosed sales.
Assessment Year: 2010-11 M/s. Raj Hardware.
4. I do not find any infirmity in the claim of the assessee. It is well settled that the peak credit should be taken as the undisclosed credit figure and such peak credit should be arrived at by deducting the gross cash withdrawal from the gross cash deposits. Thus, I direct the AO to consider the net amount of ₹33,85,692/- as the undisclosed sales in place of ₹50,32,738/-.
In the result, the appeal of the assessee is allowed in part. Kolkata, the 4th March, 2020.