SABAPATHI RAMESH,NAMAKKAL vs. ITO, WARD-1, NAMAKKAL

The Assessee filed return of income for the AY 2017-18 admitting an income of Rs.3,96,920/-. The case has been selected for complete scrutiny under CASS in order to verify ‘cash deposits during demonetisation period’. The AO completed assessment u/s 143(3) of the Income Tax Act, 1961 (“Act’ in short) and made addition of Rs.14,27,883/- as unexplained money u/s.69A r.w.s 115BBE of the Act. Aggrieved assessee preferred an appeal before the ld.CIT(A), who dismissed the appeal of assessee on merits, although assessee failed to appear before the ld.CIT(A) despite notices. Assessee is in further appeal before us.

The sole grievance of the asssessee before us is confirmation of addition of Rs.14,27,883/- as unexplained money u/s.69A r.w.s 115BBE of the Act. The ld.AR has pleaded for reasonable estimation of income on cash deposits which has opposed by the revenue.

It is undisputed fact that the assessee is engaged in the retail trading business in the name and style M/s Sri Muruga Agencies and only source of income is business receipt. Though the assessee contended that the deposits were sourced out of retail Trading Business, however, he could not establish the same. Under these circumstances, we estimate income of 25% on impugned deposits of Rs.14,43,500/- which comes to Rs.3,60,875/-. The impugned addition stands restricted to that extent. The AO is also directed to consider deduction under Section 80C of the Act. The corresponding grounds stand partly allowed.

In the result, appeal filed by the assessee is partly allowed.