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Facts
The assessee filed appeals against the orders of the CIT(A) for AY 2017-18 and 2018-19. The assessee had deposited cash in their bank account during the demonetization period and did not file a return of income. The Assessing Officer (AO) made additions to the income under section 69A of the Income Tax Act, 1961, treating the deposits as unexplained income.
Held
The Tribunal held that for AY 2017-18, the entire deposits in the bank account should be treated as turnover, and profit should be estimated at 8% under section 44AD. For AY 2018-19, the Tribunal upheld the CIT(A)'s decision, which had confirmed the AO's assessment based on the net profit rate of 8%.
Key Issues
Whether cash deposits during demonetization period are unexplained income or business receipts, and whether profit estimation at 8% is justified.
Sections Cited
69A, 44AD, 144, 147, 144B, 115BBE
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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 for 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.