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Facts
During assessment, the assessee deposited Rs.13.39 Lacs cash in his bank account during demonetization period. The assessee, a contractor, failed to establish the source of this deposit, and it was added to his income. The addition was confirmed by the CIT(A) as the cash deposit was not included in the total turnover.
Held
The Tribunal acknowledged that the assessee is a contractor whose only income source is business receipts. While the assessee claimed the deposits were from contractual receipts, this could not be established. Therefore, the Tribunal estimated income at 25% of the impugned deposit, amounting to Rs.3,34,750/-, restricting the addition to this extent.
Key Issues
Whether the addition of cash deposits made during demonetization, without establishing the source, is justified, and if not, what is the appropriate estimation of income.
Sections Cited
144, VIA
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM
(िनधा:रणवष: / Assessment Year: 2017-18) Shri Sundarrajan Venkateshkumar ITO बनाम/ C/o K Ramesh, # 3/65 II, Tirunagar Colony Ward-2, Karuveppampatti P.O., Tiruchengode TK Tiruchengode. Vs. Namakkal Dist. PIN: 637 304. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AGUPV-7438-F (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ� कीओरसे/ Appellant by : Shri T.S. Lakshmi Venkatraman (FCA) - Ld.AR � थ�कीओरसे/Respondent by : Ms.T.M. Suganthamala (Addl.CIT) - Ld. Sr. DR सुनवाई की तारीख/Date of Hearing : 12-12-2024 घोषणा की तारीख /Date of Pronouncement : 12-12-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order passed by Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 28-08-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 144 of the Act on 30-11-2019. The sole grievance of the assessee is confirmation of addition of Rs.13.39 Lacs. Having heard rival submissions, the appeal is disposed- off as under.
During assessment proceedings, it transpired that the assessee deposited cash of Rs.13.39 Lacs in his bank account during demonetization period. It was ascertained that the assessee worked as contractor. Since the assessee failed to establish the source of cash deposit, the same was added to the income of the assessee. The assessee offered income on presumptive basis @8% of total turnover of Rs.74.26 Lacs.
The Ld. CIT(A) noted that the amount of cash deposit of Rs.13.39 Lacs was not included in the total turnover. Accordingly, the addition was confirmed. Aggrieved, the assessee is in further appeal before us. The Ld. AR has pleaded for reasonable estimation of income on cash deposit which has been opposed by revenue.
It is undisputed fact that the assessee is engaged as contractor and its only source of income is business receipts. Though the assessee contended that the deposits were sourced out of contractual receipts, however, he could not establish the same. Under these circumstances, we estimate income of 25% on impugned deposit of Rs.13.39 Lacs which comes to Rs.3,34,750/-. The impugned addition stand restricted to that extent. The corresponding grounds stand partly allowed.
Ld. AR has also stated that the assessee is eligible for deduction under Chapter VIA for Rs.1.50 Lacs. We direct Ld. AO to consider the same. The assessee Is directed to file supporting documents.
The appeal stand partly allowed.
Order pronounced in open court on 12th December, 2024.