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Facts
The assessee appealed against an order for assessment year 2018-19, where an addition of Rs.13,31,857/- was made under sections 68/69 of the Income-tax Act, 1961, relating to unexplained cash deposits. The assessee had made total cash deposits of Rs.1,25,76,490/-, and the dispute concerned the justification and extent of the impugned addition.
Held
The Tribunal partly upheld the addition, reducing the original Rs.13,31,857/- to Rs.1,33,185/-. It directed that a 10% Net Profit (NP) addition be applied to the remaining unexplained cash deposits, considering them as business income due to the assessee's electronic goods turnover and lack of other income sources, with the caveat that this specific treatment is not to be a precedent.
Key Issues
Whether unexplained cash deposits should be treated as business income or additions under sections 68/69, and the appropriate quantum of such an addition.
Sections Cited
147, 144, 68, 69
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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Date of hearing 07.11.2024 Date of pronouncement 03.12.2024 ORDER This assessee’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre [in short, the “CIT(A)-NFAC”], Delhi’s DIN and order No. ITBA/NFAC/S/250/2023-24/1057150955(1) dated 17.10.2023 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Case called twice. None appeared at the assessee’s behest. I accordingly proceeded ex-parte against him.
Learned Departmental Representative vehemently argues during the course of hearing that both the lower authorities have rightly made section 68/69 addition of Rs.13,31,857/- after giving due benefit of his turnover in electronic goods during business. Learned Departmental Representative further submits that the assessee had in fact made cash deposits aggregating to Rs.1,25,76,490/-, which duly stands partly accepted except to the extent of the impugned addition. These relevant facts lead to an inference that the assessee’s remaining cash deposits in fact represents his business income per se only as he had no other source. We therefore deem it appropriate in these peculiar facts that a lump sum addition at the rate of 10% NP thereupon would be just and proper with a rider that the same shall not be treated as a precedent. It is made clear in other words that the impugned addition of Rs.13,31,857/- has been upheld only to the extent of Rs.1,33,185/- only. Necessary computation shall follow as per law.