SHRI SHANKAR LAL GUPTA,LUCKNOW vs. INCOME TAX OFFICER, RANGE-4, LUCKNOW

The only issue in this appeal of the assessee is as regards to the order of the ld. CIT(A) confirming the action of the Assessing Officer in taking the gross receipts at Rs.49,71,633/- as against the total turnover of the assessee at Rs.23,10,663/- and applying the profit rate @8% by invoking the provisions of section 44AD of the Act. According to the Grounds raised by the assessee, the Assessing Officer has added the gross receipts twice as mentioned in form No. 26AS. The assessee has business receipts of Rs.19,78,961/- during the year from Indian Oil Corporation Ltd. According to him, the receipts from Indian Oil Corporation Ltd. escaped the assessment, hence he issued notice under section 148 of the Act. The Assessing Officer noted that apart from the gross contract receipts, as per form 26AS from Indian Oil Corporation Ltd., was Rs.19,78,961/-. The assessee has also deposited a sum of Rs.17,48,497/- in cash with SBI in SB accounts No.10375712712 & 30170231202 and deposited a sum of Rs.12,44,175/- through cheque on various dates. The Assessing Officer treated these two, i.e., receipts from Indian Oil Corporation and cash & cheque deposits in the bank accounts as unexplained income of the assessee and computed the income as under: Return income: Rs. 40,786/- Addition: (i) Undisclosed Income as discussed in para 4 above - Rs. 19,78,961/- (ii) Undisclosed Income as discussed in para 5 above - Rs. 29,92,672/- Total Income - Rs. 50,12,419/-

Aggrieved, the assessee preferred in appeal before the ld. CIT(A), who confirmed the action of the Assessing Officer. Aggrieved, now the assessee is in appeal before the Tribunal.

We have heard the parties and gone through the facts and circumstances of the case. Before us, an adjournment petition was filed but, the reason stated in the application for adjournment was that to retrieve the statement of account of Indian Oil Corporation Ltd., but it is an admitted fact that the assessee has not disputed the gross receipts of Rs.19,78,961/- from Indian Oil Corporation Ltd. The assessee is a contract worker taking petty contract from Indian Oil Corporation Ltd. and earning income therefrom. He has declared income from this contract in original return of income filed on 21.3.2010 at a returned income of Rs.40,786/- for the relevant assessment year 2009–10. It is also an admitted fact that these are gross contract receipts of Rs.19,78,961/- earned from the contract work done for the Indian Oil Corporation by the assessee. The cash deposits made by the assessee as per bank accounts, amounting to Rs.17,48,497/- and cheque deposit of Rs.12,44,175/-, the assessee has to reconcile. Now before us, the assessee could not produce anything and even before the Assessing Officer or the ld. CIT(A), these entries were not explained. From the order of the ld. CIT(A), it is noticed that the assessee has given narrations of some entries of SBI in SB accounts No.30170231202 and 10375712712. From the above, it is clear that the receipt seems to be from Indian Oil Corporation Ltd., which were deposited or re-deposited either in cash or through cheque. This needs verification. Admittedly, the assessee is only a contractor for Indian Oil Corporation Ltd. and his contract receipts should be assessed on the basis of profits declared in the books of account and in case there is no books of account, only profit element can be added by applying a certain percentage. As regards to cash deposit and cheque deposits, the Assessing Officer can verify the same and if these are explained, he will decide the issue according to law. In terms of the above, this appeal of the assessee is allowed for statistical purposes. The Assessing Officer will re-decide the issue in terms of the above direction. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 01/12/2022.