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Facts
The assessee, a wholesale dealer of potatoes, deposited Rs. 44,25,000 cash in AY 2015-16. The Assessing Officer treated this as business turnover and estimated income at 25%, which was upheld by the CIT(A). The assessee had declared income at 10% in AY 2021-22 and less than 10% in AY 2022-23 and AY 2023-24.
Held
The Tribunal noted that the assessee declared income at 10% or less in subsequent years. Therefore, it was held that the income for the impugned assessment year should be assessed at the maximum of 10%, considering the subsequent disclosures.
Key Issues
Whether the estimation of income at 25% by the AO is justified, considering the assessee's declared income of 10% or less in subsequent years.
Sections Cited
Section 44AD of the Income Tax Act (implied by presumptive income)
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MADHUSUDAN SAWDIA
Assessee represented by Shri K.R. Mohapatra, A.R. Department represented by Shri Sanjib Banerjee, Sr. DR Date of hearing 26/02/2026 Date of pronouncement 26/02/2026 O R D E R PER: BENCH 1. This is the appeal filed by the assessee against the order of the ld. CIT(A), NFAC, Delhi in Appeal No. NFAC/2014-15/10270396 dated 05/09/2025 for the A.Y. 2015-16.
Shri K.R. Mohapatra, ld. A.R. appeared on behalf of the assessee and Shri Sanjib Banerjee, ld. Sr. DR represented on behalf of the revenue.
It was submitted by the ld. AR that the assessee is wholesale dealer of potatoes. It was the submission that during the impugned assessment year being A.Y. 2015-16, the assessee had deposited cash of Rs. 44,25,000/-. It was the submission that the Assessing Officer treated the entire cash deposit of Rs. 44,25,000/- as business turnover and Rashmi Ranjan Sahoo Vs ITO estimated the income of the assessee at 25%. It was the submission that the ld. CIT(A) referred to the returns filed by the assessee for the A.Y. 2021-22 and A.Y. 2022-23 and had confirmed the estimation of the income at 25% by the Assessing Officer. The ld. AR has placed before us the copy of return for the A.Y. 2021-22 which shows that the assessee had shown the presumptive income of 10%. For the A.Y. 2022-23, the assessee has disclosed her return after auditing of the books and the income was shown less than 10%. Similarly, for the A.Y. 2023-24, the income was shown at less than 10%. It was submission that the income of the assessee estimated at 25% is far to high and the assessee does not make such margins.
In reply, ld. Sr. DR vehemently supported the orders of the Assessing Officer and ld. CIT(A). It was the submission that the estimation of the income as done by the Assessing Officer is reasonable.
We have considered the rival submissions. Perusal of the facts in the present case clearly shows that for the A.Y. 2021-22, the assessee has disclosed an income on presumptive basis at 10% and for the A.Y. 2022-23 and A.Y. 2023-24 after audit, the income of the assessee stands disclosed at less than 10%. This being so, we are of the view that the income of the assessee should be assessed by comparing the subsequent percentage of income disclosed by the assessee which is the maximum of 10%, therefore, the Assessing Officer is directed to Rashmi Ranjan Sahoo Vs ITO assess the income of the assessee for the impugned assessment year at 10%.
In the result, this appeal of the assessee is partly allowed. Order dictated and pronounced in the open court on 26/02/2026.