If books not maintained under presumptive section, cash deposit in bank correlates to turnover-ITAT

When assessee not maintained books of account and filed under presumptive section, cash deposit in bank were correlated to the turnover – ITAT

ABCAUS Case Law Citation:
ABCAUS 2767 (2019) (02) ITAT

The appellant assessee had sought to set aside the impugned order passed by CIT (Appeals) in holding that that bank account could not be correlated to the turnover shown in the return of income.

The assessee had filed return u/s 44F of the Act showing the figure of gross receipt from his businesses.

The assessement was completed by the Assessing Officer (AO) under section 144/147 of the Income-tax Act, 1961 (‘the Act’) on the ground that the assessee has failed to join the proceedings despite repeated notices.

The AO made addition on account of unexplained cash deposited in the saving bank account during the year under assessment.

The assessee carried the matter by way of an appeal before the CIT (Appeals) who partly allowed the appeal.

However, the CIT (A) declined to accept the contention of the assessee that the cash deposited in bank account on the basis of which addition was made, was correlated to the turnover shown in the return of income.

Feeling aggrieved, the assessee has went before the Tribunal by way of filing the appeal.

The Tribunal opined that when the case of the assessee was that he had not maintained the regular books of account and has filed the return u/s 44AF of the Act, it was difficult to understand as to why the bank account maintained with Bank containing deposit was not to be correlated with the turn over.

The Tribunal further opined that when the assessee was having cash sales and deposited the same in the bank account regularly and he was in possession of evidences to explain the same, the action of the CIT(A) in holding that that bank account could not be correlated to the turnover shown in the return of income was not agreeable.

The Tribunal set aside the order of CIT(A) and the file was remanded to AO for fresh adjudication.

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