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Facts
The assessee, engaged in trading rice and pulses, deposited Rs. 5 Lacs in cash during demonetization, which was added as unexplained income. Other credits of Rs. 432.46 Lacs were assessed with a 3% profit. The CIT(A) confirmed this assessment.
Held
The Tribunal decided to estimate income at 3% against the cash deposit of Rs. 5 Lacs, considering it as the assessee's only source of business income. The estimation for other credits was deemed reasonable.
Key Issues
Estimation of profit on cash deposits and other bank credits.
Sections Cited
69
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. During hearing of stay application, it transpired that the only issue in quantum appeal is profit estimation. With the consent of both the sides, the quantum appeal itself was taken up for hearing.
Upon perusal of assessment order dated 25-09-2019, it could be seen that the assessment has been framed on best judgment basis. The assessee is stated to be engaged in trading of rice and pulses. Upon perusal of bank statements, Ld. AO noted that the assessee deposited cash of Rs.5 Lacs during demonetization period. The same was added as unexplained income u/s 69. There were other credits for Rs.432.46 Lacs against which Ld. AO estimated profit at 3%. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. The Ld. AR has pleaded for lower estimation on bank credits which has been opposed by Ld. Sr. DR.
Since the only source of income for the assessee is business income, we estimate income of 3% against cash deposit of Rs.5 Lacs. The estimation against other credits is quite reasonable. The Ld. AO is directed to re-compute the income of the assessee.
The appeal stand partly allowed. The connected stay application has been rendered infructuous. Order pronounced in open court on 07th October, 2024.