The two member bench of Bangalore Income Tax Appellate Tribunal ( ITAT ) directed re adjudication regarding the cash deposited during the demonetisation period under the business of purchases and sale of biscuits and confectioneries.
The Assessee Chandrappa Nalina is an individual carrying on the proprietorship business of purchase and sale of biscuits and confectioneries in the name and style of M/s Harshitha Enterprises. The two member bench of Bangalore Income Tax Appellate Tribunal ( ITAT ) directed
During the course of assessment proceedings, the AO called for the bank statement from the bank and noted that the assessee has deposited cash on different dates and which was unexplained.
The AO also noted that till the completion of the assessment, the assessee has not filed return of income, for want of proper explanation the entire cash deposit of Rs.19,24,000/- was treated as unexplained investment under Section 69A and taxed under Section 115BBE of the Income Tax Act and completed the assessment under Section 144 of the Income Tax Act.
Aggrieved by the order the assessee filed an appeal before the CIT(A) who dismissed the appeal of the assessee. Hence the assessee filed another appeal before the tribunal. addition
During the adjudication Ravish Rao, the counsel for assessee submitted that during the demonetization period was out of sales made by the assessee but the assessee could not explain and he submitted that the return was filed on 25/09/2019. However, the AO ignored the same and passed the order.
Further argued that the AO didi not examine the VAT return filed by the assessee.
Ganesh R Gale, Counsel for Revenue supported the order of lower authorities.
It was observed by the tribunal that the turnover shown as per VAT return is Rs.1,88,15,594/- and from the statement of facts that the assessee has filed return of income on 25/09/2019.
It is also noted from the statement of facts that from April, 2016 to 08/11/2016, the gross sales is of Rs.1,34,95,325/- against which, Rs.1,12,16,200/- was collected in cash and deposited in bank account in regular course of business. It was disclosed to the VAT authorities. However the assessee failed to respond to any notice issued by the AO.
Accordingly after reviewing the facts the ITAT bench of Beena Pillai, ( Judicial Member ) and Laxmi Prasad Sahu (Accountant Member) directed readjudication regarding the cash deposited during the demonetisation period under the business of purchases and sale of biscuits and confectioneries.
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