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Facts
The assessee deposited Rs. 21.61 Lacs in cash during the demonetization period. The Assessing Officer (AO) added this amount to the total income under Section 69A read with Section 115BBE, treating it as undisclosed income. The assessee claimed to be a petty contractor.
Held
The Tribunal found that the assessee's return of income, showing gross receipts of Rs. 24.61 Lacs and an expenditure of Rs. 24.70 Lacs resulting in a loss, was rejected without sound reasoning. However, the assessee also failed to substantiate its claim. Therefore, the Tribunal estimated the income at 10% of the bank credits.
Key Issues
Whether the addition of cash deposits made during demonetization as income under Section 69A is justified, and if not, what is the correct estimation of income?
Sections Cited
69A, 115BBE, 144
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Income Tax Appellate Tribunal, “SMC” BENCH, AGRA
Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year:2017-18) Shankar Developers Income-tax Officer, बनाम/ B-117, Samadhiya Colony, Ward 1(3), Gwalior. HarcotaTaraganj, Lashkar, Vs. Gwalior (MP). �थायीलेखासं./जीआइआरसं./PAN/GIR No. ACWFS-8971-L (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Ashok Vijaywargiya, CA – Ld. AR � थ�कीओरसे/Respondent by : Sh. Shailender Shrivastava – Ld. DR सुनवाईकीतारीख/Date of Hearing : 20-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order passed by learned Commissioner of Income Tax (Appeals), NFAC, Delhi [CIT(A)] on 02-12-2022 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s. 144 of the Act on 21-12-2019. Having heard rival submission, the appeal is disposed-off as under.
It transpired that the assessee deposited cash of Rs.21.61 Lacs in its bank account during demonetization period. In the absence of any response from assessee, Ld. AO added total bank credit u/s 69A r.w.s. 115BBE. The assessee stated that it was engaged as petty contractor.
However, both lower authorities rejected the same. Aggrieved, the assessee is in further appeal before us.
We find that the assessee has filed return of income for this year on 21-10-2019 wherein the assessee has shown gross receipts from contract work for Rs.24.61 Lacs. After claiming expenditure of Rs.24.70 Lacs, the assessee has arrived at a loss. However, this return has been rejected without any sound reasoning. At the same time, the assessee has also failed to substantiate its stand. Under these circumstances, we estimate the income of the assessee @10% of bank credits of Rs.24.61 Lacs which would be assessable as normal business income. No other ground has been urged in the appeal.
The appeal stand partly allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.