Cash Deposits Can’t be Assessed Unexplained When Cheque Deposits were Accepted as Business Turnover: ITAT [Read Order]

Income Tax Cash Deposits - Taxscan

The Income Tax Appellate Tribunal ( ITAT ) in Income Tax Officer vs. Shaik Zameer, held that   cash deposits can’t be assessed unexplained when cheque deposits were accepted as business turnover.

The assessee derive income from transport contracts. He declared the income as Rs. 3.32 Lacs. The Assessing Officer(A.O.) found that the assessee had lots of deposits in the bank accounts both cheques and cash. The cheque deposits were accepted as business turnover and income was estimated under Section 44AD of the Income Tax Act, 1961 at Rs. 6.13 Lacs but the cash deposits were brought to tax under Section 68 to an extent of Rs. 60.57 Lacs. On appeal, the Commissioner of Income Tax (Appeals) (CIT(A)) treated cash deposits also as turnover and computed the total income. The Revenue appealed before the ITAT. Despite sending notices, no one appeared for the assessee. The assessee did not challenge the CIT(A)’s order.

The Bench comprising Vice President D. Manmohan and Accountant Member B. Ramakotaiah heard the appeal ex-Parte respondent. Confirming the decision of the CIT(A) the Bench observed “There is no reason why the cash deposits should be assessed U/s. 68 when cheque deposits were accepted as business turnover. We find the reason given by the Ld.CIT(A) in treating the entire amount as turnover is reasonable on the facts of the case. Moreover, income is also estimated as assessee has not co-operated in the proceedings. Since assessee is involved in transport business and income was determined at 10% as against 6% of the AO, we have no option than to confirm the order of CIT(A) in the appeal of Revenue.”

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