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Facts
The assessee filed an appeal for assessment year 2017-18 against the CIT(A)'s order issued under section 144 of the Income-tax Act. The appeal challenged two main additions made by the lower authorities: an estimated net profit ratio of 8% on gross receipts of Rs. 20,58,040/- and an addition of Rs. 16 lakhs under section 69A for unexplained cash deposits.
Held
The Tribunal upheld the estimated net profit addition on the turnover of Rs. 20,58,040/-. However, for the Section 69A addition of Rs. 16 lakhs for cash deposits, the Tribunal restricted the addition to Rs. 2.50 lakhs, thereby deleting Rs. 13.50 lakhs, specifying that this decision would not serve as a precedent.
Key Issues
Whether the lower authorities were justified in estimating a net profit ratio of 8% on gross receipts; Whether the addition under section 69A for cash deposits was correctly made and should be sustained.
Sections Cited
144, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
National Faceless Appeal Centre (NFAC), Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1060644415(1), dated 08.02.2024, in case no. CIT(A), Moradabad/10144/2019-20, in proceedings u/s 144 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
A perusal of the instant case file indicates that the assessee’s sole substantive ground raised therein challenges both the lower authorities’ action estimating net making section 69A addition of Rs. 16 lakhs representing cash deposits made in the relevant previous year.
Learned Departmental Representative vehemently supports the impugned twin additions that they have been rightly made in the assessee’s hands.
I have given my thoughtful consideration to the assessee’s pleadings and find no reason to disturb the former estimate net profit addition on the turnover of Rs. 20,58,040/- involving regular business receipts.
So far as his second ground, challenging cash deposit addition of Rs. 16 lakhs is concerned, I am of the considered view that although assessee failed to reconcile the corresponding figures with the business turnover the only inference which prima facie arises is that he had deposited his business sales figures only in the bank account. Faced with this situation, I deem it appropriate that a lump sum addition of Rs. 2.50 lakhs only in the given facts and circumstances of the case would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law. It is made clear before parting that the assessee has been held entitled for relief only qua the latter sum of Rs. 16 lakhs which has been restricted to Rs. 2.50 lakhs and the remaining addition of Rs. 13.50 lakhs stands deleted.
This assessee’s appeal is partly allowed in above terms.
Order pronounced in open court on 28.11.2024.