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Facts
The assessee deposited cash during the demonetization period (Nov-Dec 2016) into his bank account and did not file a return of income. The Assessing Officer (AO) treated a portion of these deposits as unexplained income under Section 69A and estimated business income on the remaining amount. The Commissioner of Income Tax (Appeals) upheld the AO's order.
Held
The Tribunal held that for AY 2017-18, the entire bank deposits should be treated as turnover, and profit estimated at 8% under Section 44AD. For AY 2018-19, the CIT(A)'s decision to uphold the 8% profit rate was sustained.
Key Issues
Whether cash deposits during demonetization can be treated as unexplained income, and whether the estimation of business income at 8% is justified when the assessee had disclosed turnover.
Sections Cited
250, 144, 147, 144B, 69A, 3, 4, 44AD, 115BBE, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK BENCH AT KOLKATA
Before: SHRI DUVVURU RL REDDY(KZ) & SHRI RAKESH MISHRA
order : 04-June-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: Both these appeals filed by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 and AY 2018-19 dated 05.02.2025, which have been passed against the “1. That the order of the LC IT(Appeals) is unjust and not in reference to the facts and circumstances of the case. 2. That the estimation of income @8% is unjust when the appellant has maintained the books of account.
We will first take up the appeal in AY 2017-18. Brief facts of the case are that the assessee had deposited cash in the bank account during the period of demonetisation i.e. from 09.11.2016 to 31.12.2016 in his bank account with the State Bank of India, Balimela and had not filed the return of income. The assessment was made u/s 144 of the Act by making an addition of Rs. 21,08,500/- under section 69A and Rs.3,63,604/- as business profits after applying the profit rate of 8% on the balance amount. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide order dated 05.02.2025 dismissed the appeal. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival submissions were heard and the record and the submissions made have been examined.
Ground nos. 1 and 7 being general in nature do not require any separate adjudication.