Kusum v. ITO, Balotra

Parties Involved

Facts Summary

Kusum, an individual, filed her return of income on 24.11.2017 at a total income of Rs.4,42,670/-. The case was selected for limited scrutiny and notice u/s. 143(2) of the Act was issued on 09.08.2018. The reason for selection of the case for scrutiny was that there is a high value of cash withdrawal of Rs.4,32,89,000/- by the assessee from City Union Bank, Bank Account No. 33315 and such cash withdrawal is larger as compared to profit before interest in tax. Assessee in response to the notice submitted that she is a transporter and carrying on the business (i) segment of transport itself and (ii) segment of earning commission of freight. When the freight income is from transportation, full amount is credited as gross receipt and when she renders service as freight commission agent, only commission income is considered as her turnover. Therefore, the cash withdrawal of Rs.4,32,89,000/- is not higher compared to her profit as she pays the amount to truck drivers for both the segment of her income. It was stated that the cash withdrawal is used for payment to various truck drivers for truck freight payments. The learned Assessing Officer found that explanation of the assessee was not satisfactory. He held so, far for following reasons: (i) Assessee failed to furnish mode of payments to the fuel suppliers and did not furnish the confirmed ledger accounts of them. (ii) Assessee has made huge cash withdrawals but did not furnish cash book. (iii) Assessee did not furnish complete p…

Legal Issues

• 1. Whether the learned CIT(A), NFAC grossly erred in upholding the validity and legality of order passed by ld. AO.
• 2. Whether the learned CIT(A), NFAC grossly erred in upholding the addition made by the Ld. AO in the assessment order which was beyond the scope of limited scrutiny.
• 3. Whether the learned CIT(A), NFAC grossly erred in sustaining addition of Rs. 3,08,48,000/- made by Ld. AO u/s 40A(3) of the Act.
• 4. Whether the learned CIT(A), NFAC grossly erred in not considering the explanation and evidence reflecting that the appellant had not made any violation of provision of section 40A(3) of the Act.
• 5. Whether the learned CIT(A), NFAC grossly erred in not analyzing the documentary evidence, submission and judicial decisions in right perspective and judicious manner while upholding the addition made by the Ld.AO.
• 6. Whether the learned CIT(A), NFAC grossly erred in highly disregarding the CBDT circular and judicial decisions referred by the appellant while upholding the addition made by the Ld. AO.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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