Kanukuntla Lakshminarayana Vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee, Kanukuntla Lakshminarayana, did not file his return of income for the assessment year 2016-17. He declared his total income of Rs.1,50,000/- against a notice under section 148 of the Income Tax Act, 1961. The Assessing Officer observed that the assessee had deposited cash of Rs.93,90,000/- in his account held with SBI, Kothagudem, for the financial year 2015-16. The assessee explained that the deposits belonged to his owner, Shri Bhukya Sai Durga Uday Kiran, who requested the assessee to use his account as the owner’s bank account had become inoperative. The Assessing Officer did not accept the contention as the assessee failed to furnish a confirmation letter. The Officer treated the entire cash deposit as business receipt of the assessee and made an addition of Rs.7,51,200/- on account of estimation of business income @8% of the total business turnover of Rs.93,90,900/-. The Commissioner of Income Tax (Appeals) upheld the addition made by the Assessing Officer and dismissed the appeal of the assessee.…

Legal Issues

• 1. Whether the deposits in the assessee's account are his business receipts or those of his owner?
• 2. Whether the rate of estimation of the net profit in liquor trade varies from case to case?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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