SRI MANISH BOTHRA,KOLKATA vs. ITO, WARD-46(2), KOLKATA, KOLKATA

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ITA 1846/KOL/2017Status: DisposedITAT Kolkata20 December 2017AY 2012-132 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that an ad hoc addition of 20% of unexplained deposits is not tenable when all transactions are recorded in the books of accounts. The addition was made without any basis.

What were the facts?

The Assessing Officer added Rs. 2,89,066/-, being 20% of bank deposits, as excess sales turnover. The assessee maintained regularly audited books of accounts where all deposits and withdrawals were recorded.

What were the issues?

Whether an ad hoc addition of a percentage of bank deposits is justified when the assessee maintains books of accounts and all transactions are recorded therein.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA

Before: Shri J.Sudhakar Reddy, AM ]

Hearing: 14.11.2017Pronounced: 20.12.2017

For the Appellant : Shri S.M.Surana, Advocate For the Revenue :Shri Pijush Mukherjee, JCIT Date of Hearing : 14.11.2017 Date of Pronouncement : 20.12.2017 ORDER

1.

This appeal by the assessee arises out of the order of the Learned Commissioner of Income Tax (Appeals)-14, Kolkata [ in short the ld CITA] dated 03.07.2017 against the order passed by the ITO, Ward-47(2), Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 17.09.2014 for the Assessment Year 2012-13 on the following grounds : 2. For that the Ld. CIT(A) erred in confirming the addition of Rs. 2,89,066/- on mere assumption and hypothetically calculating the cash balance available for deposits in bank when regularly maintained cash book was produced wherein all the deposits and withdrawal were incorporated and examined by the AO.

2. The Assessing Officer in this case made an addition of Rs. 2,89,066/- being 20% of the deposits in the bank account, which as per the Ld. AO was excess sales turnover of the assessee. The same has been confirmed by the Ld. CIT(A). Aggrieved the assessee is in appeal.

3. After hearing the rival contention, I find that as per the Assessing Officer, the unexplained deposits in the bank account is Rs. 12,28,029/-. The assessee was Manish Bothra A.Yr.2012-13 maintaining books of accounts and the assessing officer verified these books of accounts. All the deposits and withdrawals mentioned in the bank account were recorded in the books of accounts. The ld. AO disputed credit sales of Rs. 23,27,149/- without any basis. When all the transactions in the bank are recorded in the books of accounts, the question of making an addition of an amount as unexplained deposit does not arise. Be as it may, an ad hoc addition of 20% of Rs. 12,28,029/- the so-called unexplained deposits cannot be countenanced. Either the entire unexplained deposit as ascertained by the Ld. AO has to be added or addition has to be made by evaluating each credit in the bank account. I do not understand how 20% ad hoc addition of the total deposit made in the account can be made. Thus, the said addition is hereby deleted and the appeal of the assessee allowed.

4.

In the result, the appeal of the assessee is allowed.

Order pronounced in the Court on 20.12.2017 Sd/- [J. Sudhakar Reddy] Accountant Member Dated : 20.12.2017 SB, Sr. PS Copy of the order forwarded to:

1. 1. Shri Manish Bothra, 21,Khetra Mitra Lane, 7th Floor, R.No.7A, Salkia, Howrah- 711106.

2. ITO, Ward-46(2), 3, Government Place (West), Kolkata-700001. 3..C.I.T.(A)- , Kolkata 4. C.I.T.- Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

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