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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY
PER V. DURGA RAO, J.M.
The present appeal has been filed by the assessee challenging the impugned order dated 16/10/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2020-21.
In its appeal, the assessee has raised as many as 11 grounds of appeal. However, two issues arose out of these grounds, and the same are summarised as under:-
Varun Sudhakar Zade ITA no.364/Mum./2023 i) Addition of ` 2,37,288, on account of undisclosed business receipt; and
ii) Addition of ` 10,148, on account of excess turnover shown in the GST return.
Brief facts of the case are, the assessee is an individual filed his return of income on 31/03/2021, for the year under aassessment declaring total income of ` 29,97,860 along with agricultural income of ` 2,07,500. The case was selected for scrutiny through “CASS” with the reason “verification of transactions”. The Assessing Officer passed the assessment order under section 143(3) of the Act by making addition of ` 2,37,288, on account of undisclosed business receipt and ` 10,148, on excess turnover shown in the GST return. The assessee being aggrieved, filed appeal before the first appellate authority.
The learned CIT(A), insofar as the issue of addition of ` 2,37,288, on account of undisclosed business receipt is concerned, disallowed the claim of the assessee by holding as under:-
“5.2. I have considered carefully the admission of the appellant in view of the assessment order passed by the E. AO, I have also perused the paper book uploaded by the appellant on ITBA portal. It is an admitted fact by the appellant himself that the he has shown this total business receipt less by Rs. 3,38,984, Ld AO has been quite reasonable to not making the addition of entire amount rather the has logically allowed the probable expenses @ 30% of the above amount and made addition only of Rs. 2,37,288. Thus, the submission of the appellant on this issue does not have any force. Therefore, I am of considered opinion that Id. AO has rightly made the addition under reference and the assessment order on this issue deserves to be upheld. Accordingly, the grounds no. 3, 4, 5 and 6 of the appeal are dismissed and not allowed.”
Being aggrieved, the assessee is in appeal before the Tribunal.
Varun Sudhakar Zade ITA no.364/Mum./2023
We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. As regards the addition of undisclosed receipts, as per grounds no.3 & 4, the addition @ 70% of undisclosed receipts of ` 3,30,984 for `.2,37,288, as confirmed by the learned CIT(A), it is an admitted fact that profit percentage adopted by the assessee in the Profit & Loss A/c is @ 10.04% and for the sake of consistency, an addition of 10.04% of ` 3,30,984, is desirable. Hence, the addition is sustained to the extent of ` 34,034. Accordingly, the assessee gets part relief of ` 2,03,254. In fact, the assessment of profit @ 30% is considered to be excessive and arbitrary and has been reduced to 10.04%. Thus, the claim of the assessee on this issue is partly allowed.
As regards the issue of addition of ` 10,148, on account of excess turnover shown in the GST return, the learned CIT(A) disallowed the claim of the assessee by observing as under:-
“6.2 I have considered carefully the submission of the appellant in view of the assessment order passed by the Id. AO. I have also perused the paper book uploaded by the appellant on ITBA portal. It is an admitted fact by the appellant himself that the he has declared access turnover in the GST return by Rs.1,01,086/-. Ld. AO has been quite reasonable to not making the addition of entire amount rather he has logically added only 10% of the amount of access turnover as per the GST return for the assessment year under reference. During the appellate proceedings the appellant has submitted that as per GST Act, he has right of reverse the entry of access turnover in the subsequent financial year. But the appellant has not filed any documentary evidence with respect of such reversal of entry in the GST return in subsequent financial year. Thus, the submission of the appellant on this issue does not have any force. Therefore, I am of considered opinion that Id. AO has rightly made the addition under reference and the assessment order on this issue deserves to be upheld. Accordingly, the grounds no. 7, 8 and 9 of the appeal are dismissed and not allowed.”
The assessee being aggrieved by the aforesaid order so passed by the learned CIT(A) filed appeal before the Tribunal. Page | 3
Varun Sudhakar Zade ITA no.364/Mum./2023
We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. We find that the addition was made by the Assessing Officer on account of mistakenly excess turnover of ` 1,01,086, was shown in the GST return. We find that the addition made by the Assessing Officer of ` 10,148, on account of excess turnover shown in the GST return mistakenly, cannot be taken into consideration for the purpose of Income-tax. Thus, the addition made by the Assessing Officer cannot survive and the learned CIT(A) confirming the same is not correct. Thus, we set aside the impugned order passed by the learned CIT(A) and allow the claim of the assessee.
In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 06/05/2024
Sd/- Sd/- K.M. ROY V. DURGA RAO ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 06/05/2024 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur