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Facts
The assessee filed an appeal challenging the order of the CIT(A) who sustained part of the additions made by the AO. The AO had made additions on account of business income and unexplained credits amounting to Rs. 10,19,285/-. The assessee did not appear before the Tribunal for the hearing.
Held
The Tribunal noted that the assessee did not appear nor filed any application for adjournment, indicating no interest in pursuing the appeal. The CIT(A) had confirmed the addition after finding that the assessee, despite claiming not to be in business, had unexplained credits in bank accounts and failed to explain their nature and source.
Key Issues
Whether the addition on account of unexplained business receipts and estimated profit by the AO and confirmed by the CIT(A) is justified, and whether the assessee has provided sufficient explanation for the credits in bank accounts.
Sections Cited
250, 69A, 133(6), 144
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Income Tax Appellate Tribunal, “SMC” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN
Assessee by None Revenue by Shri vithal Machindra Bhosale, Sr. DR Date of Hearing 18.12.2024 Date of Pronouncement 19.12.2024 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 21.12.2023, passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / (‘Ld. CIT(A)’), for the assessment year 2017-18.
At the very outset, I noticed neither assessee nor his representative appeared when the case was called repeatedly and even no application for adjournment has been filed, which shows that assessee is not interested in pursuing the present appeal, therefore assessee is proceeded ex-parte. On the contrary, the Ld. Ld.DR present in the court is ready with the arguments, therefore I have decided to proceed with the hearing of the case ex-parte.
From the records, I noticed that the assessment was completed u/s 144 of the Act in the case of the assessee thereby making additions u/s 69A of the Act and also on account of business income. Aggrieved by the said additions the assessee preferred appeal and the appellate authority sustained the part additions on account of business income and deleted the additions u/s 69A of the Act. Aggrieved by the said order the assessee has preferred the present appeal before me.
After hearing Ld.DR and after going through the records I noticed that the addition of Rs. 10,19,285/- made by the AO was dealt with by Ld. CIT(A) and the operative portion of the same is reproduced below:
7.2 I have considered the facts the case, assessment order, grounds of appeal and submission filed by the appellant. I find that from the assessment order that the AO had collected KYC information from the bank u/s 133(6) of the IT Act which revealed that the appellant was doing the business activity and the nature and the source of credits appearing in the bank accounts of Rs.1,01,92,857/- was not explained by the appellant. Therefore the AO treated the said receipts as business receipts and estimated the net profit at the rate of 10% and made the addition of Rs. 10,19,285/-.
During the course of appellate proceedings, the appellant has claimed that he had informed the AO that the appellant is not doing any business and hence claimed that the estimation of net profit at the rate of 10% is not justified. I find that though the appellant has claimed that he is not doing any business, as per the information of the appellant available with the banks in the form KYC details, the appellant is doing business. Further the appellant has not explained the nature of credits of Rs 1,01,92,857/- and reasons for not offering the same as income of the appellant is also not explained. Therefore I find that the estimation of net profit at the rate of 10% on such unexplained credits treating the same as business receipts is justified. Therefore the addition made by the AO is confirmed and the ground of appeal raised by the appellant is dismissed.
5. After having considered the orders passed by the Ld. CIT(A), I found that CIT(A) has passed a detailed order considering all the submissions raised by the assessee and the assessee could not explain the nature of credits of Rs. 1,01,92,857/- and reasons for not offering the same as income of the assessee. Even before me, assessee has not filed any documentary evidences or submissions to rebut or controvert the findings so recorded by the Ld. CIT(A). Therefore, I have no hesitation to uphold the order passed by Ld. CIT(A). Hence I am of the view that revenue authorities were well within their rights to make the addition in the case of the assessee. Therefore all the grounds raised by the assessee stands dismissed.
In the result the appeal filed by the assessee is dismissed with no order as to cost.
Order pronounced in the open court on 19.12.2024.