ITAT directs to tax Cash Deposit coming out of store business at 8% [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Bangalore bench recently directed the Assessing officer to tax at 8% towards the cash deposit as coming out of the store business.

The decision was pronounced by the single bench of George George K, (Vice President).

The Assessee Kopparam Laxminarayan Kumuda For the Assessment Year 2017-18 had not filed any return of income. It was noticed that the assessee had deposited cash aggregating to Rs.12,17,200/- into her bank account during the demonetization period.

Assessee was issued notice under section 142(1) of the Act. Since assessee had not filed her explanation on the source of cash deposit into her bank account, assessment was completed under section 144 of the Act. The addition was made on account of unexplained cash deposit of Rs.12,17,200/- and estimated the business income of Rs.5,67,265/-

Aggrieved by the assessment completed under section 144 of the Income Tax  Act, assessee filed appeal before the First Appellate Authority (FAA). The CIT(A) passed an ex-parte order dismissing the appeal of the assessee .Thereafter the assessee filed second appeal before the tribunal

M. R. Vanaja,Counsel for assesee submitted that assessee’s husband was running a small provision store in the name of the assessee. Assessee's husband fell sick during the relevant Financial Year and was periodically admitted to hospital and he finally succumbed to his illness on 07.04.2018.Thus assessee is illiterate and was not aware of the business run by her husband in her name.

Ganesh R Ghale, Standing Counsel, supported the orders of the AO and the CIT(A).

The tribunal observed that cash deposit of Rs.12,17,200/- into the assessee's bank account during the demonetization period is out of the business conducted in her name.However assessee was not aware of the business conducted by her assessment in her name .

Accordingly the ITAT bench held that  assessees would be liable to be taxed @ 8% on cash deposited aggregating to Rs.12,17,200/- since the presumptive rate of tax for small business is at 8%.

To Read the full text of the Order CLICK HERE

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