Shri Jitesh Kumar Sonkar v. The Income Tax Officer – 3(2) Lucknow

Parties Involved

Facts Summary

The assessee, Shri Jitesh Kumar Sonkar, filed an income return for the Assessment Year 2016-17, declaring a total income of Rs.9,60,390/-. The case was selected for complete scrutiny due to low income compared to large commission receipts and a mismatch in sales turnover reported in the Audit Report and ITR. The Assessing Officer noticed that the assessee had purchased a car for Rs.30,00,000/- and had shown a car loan of Rs.14,47,165/-. The balance amount of Rs.15,52,835/- was treated as income from undisclosed sources and added to the assessee's income. The Assessing Officer also made an ad hoc addition of 20% on the total expenses claimed by the assessee, amounting to Rs.2,95,182/-. The assessee appealed to the NFAC, but the appeal was dismissed ex-parte. The assessee then approached the Tribunal, raising several grounds of appeal.…

Legal Issues

• 1. The assessee argues that the CIT(A) erred in not accepting the income returned by the appellant based on complete and audited books of accounts.
• 2. The assessee claims that the CIT(A) failed to appreciate that the vehicles mentioned in the balance sheet were old vehicles purchased partly by bank finance and the margin money was paid by the appellant out of his income/capital.
• 3. The assessee argues that the CIT(A) failed to appreciate that the expenses claimed by the appellant are necessary expenses based on the audited balance sheet.
• 4. The assessee claims that the CIT(A) failed to decide the appeal on merits and dismissed it on the ground of noncompliance of notices.
• 5. The assessee argues that the CIT(A) upheld the ad hoc additions of 20% made by the assessing officer on business expenses claimed by the appellant without assigning any reason.

Judgment Outcome

Decided in favour of Assessee.

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