ITO, Ward-1, Ahmednagar Vs. Jai Sai Traders

Parties Involved

Facts Summary

The respondent-assessee is a partnership firm dealing in Trading of Sugar and defunct owing to incurring of losses. No regular return of income under the provisions of section 139(1) was filed by the appellant for the A.Y. 2017-18. Based on the information that the appellant made cash deposits during the demonetization period, the Assessing Officer (AO) issued notice u/s.142(1) calling upon the appellant to file the return of income. The appellant had not complied with the notice u/s.142(1). The AO proceeded with framing of the assessment and found that during the demonetization period, the appellant made cash deposit of Rs.54,76,000/- with Shahar Sahakari Bank, Ahmednagar and Rs.3,67,000/- with Nashik Merchants Co.op Bank Ltd., Nashik. Thus, the AO made addition of cash deposit to the tune of Rs.58,43,000/- as unexplained money u/s.69A invoking the provisions of section 115BBE of the Act. The AO also made addition of Rs.5,18,45,870/- treating the cash deposits in the bank account as undisclosed business turnover of the respondent-assessee firm by estimating the gross profit at 8% of the turnover. Being aggrieved by the above additions, an appeal was filed before the NFAC challenging the addition of Rs.58,43,000/- made u/s.69A of the Act and the addition of Rs.5,18,45,870/- made on the undisclosed turnover of the business of respondent-assessee firm, applying gross profit ratio at 8%. The NFAC while confirming the addition made u/s.69A of the Act, however, restricted the addi…

Legal Issues

• 1. Whether the restriction of addition to 0.5% of the undisclosed turnover of the respondent-assessee firm is arbitrary and not based on any evidence?

Judgment Outcome

Decided in favour of Revenue.

Similar Judgements

• Amar Kumar Agarwal vs DCIT, CC 4(3)

  Kolkata benchAY 2017-18 to 2021-22Partly Allowed

• M.Jayaprakash vs Deputy Commissioner of Income Tax

• Balakrishnan Ramanathan vs Income Tax Officer, Ward-2(1), Erode

• Mohammad Naushad Vs ITO Ward-32(1), Kolkata

  Kolkata benchAY 2016-2017Allowed

• Nikunjkumar Narbheram Thakkar Vs. The Income Tax Officer

  Ahmedabad bench

• ITO Ward 30(5) Vs. Raghav Goel

  C Bench, Delhi benchAY 2017-18Allowed