AURANGABAD STEEL CORPORATION,AURANGABAD vs. INCOME TAX OFFICER WARD 1(5), AURANGABAD, AURANGABAD

When the case called for, none appeared on behalf of the assessee. On the previous two dates of hearing fixed for 25.09.2025 & 27.10.2025 intimated to the assessee through a valid notice, the assessee has neither represented in person nor through authorized representative. I, therefore, proceed to adjudicate the appeal exparte qua assessee with 2 ITA.No.2054/PUN/2025 Aurangabad Steel Corporation the assistance of Ld. Departmental Representative (DR) and the documents available on record.

The assessee has raised seven grounds of appeal, but the sole grievance revolves around the addition for unexplained cash deposit of ₹ 38,57,530 .

I have heard the ld. Departmental Representative and perused the records placed before me. I observe that the assessee is a partnership firm and declared income of ₹3,25,560 in the e-return for A.Y. 2017-18 furnished on 31.10.2017. The return selected for complete scrutiny under CASS for the reason that “low income from TCS receipts-scrap” and is duly assessed under VAT Act and quarterly sales figures have been declared therein. Books of accounts are regularly maintained and that the sales are made out of stock available with the assessee. From the assessment order, I observe that Ld. Assessing Officer (AO) has not rejected the book results and has only questioned the cash sales which took place during the demonetization period. Once the books of accounts have been accepted, it means that the assessee is regularly carrying on business of scrap and proper details are maintained. It is well evident that declaration of demonetization scheme was never known to the public at large and at that point of time panic is inevitable. Such period of panic certainly cannot be equated to the normal period of carrying on business activities. In the instant case since the assessee’s regular business has not been disputed and that the assessee is a partnership firm maintaining proper books of account, which has been 3 ITA.No.2054/PUN/2025 Aurangabad Steel Corporation accepted by the Ld.AO and necessary details of cash sales have been filed. In absence of any contrary material, I find that the source of cash deposits is from the cash sales of business activity carried out by the assessee. However, since no proper details filed before this Tribunal inspite of providing sufficient opportunities and also other necessary details are not emerging from the available records, therefore, I deem it appropriate to estimate income @8% of the alleged cash sales of ₹38,57,530 and sustain addition at ₹3,08,600 and give part relief to the assessee. Effective grounds of appeal raised by the assessee are partly allowed.