Vodafone Distributor Fails to Explain ₹51.80 Lakh Cash Deposits: ITAT Upholds 8% Income Estimation [Read Order]

In a recent ruling, the Income Tax Appellate Tribunal (ITAT) has upheld that the estimation of income at 8% on a large cash deposit made by a Vodafone distributor failed to satisfactorily explain the nature and source of the deposit during the assessment proceedings.

The appeal was filed by the assessee, Vijay Shridhar Wadkar, who engaged in the business as a distributor of Vodafone Idea Ltd under the name Navkar Agency, against the order passed by the Commissioner of Income Tax for the assessment year 2017-18. Assessee had filed his return of income declaring a total income of ₹3.16 lakh.

The assessee, Vijay Shridhar Wadkar, contended that he was operating as a distributor and that the cash deposits were connected with his business activity. Also mentioned that the estimation at 8% was unjustified. None appeared on behalf of the assessee at the time of the hearing

During the assessment proceedings, the AO noted that the assessee had deposited ₹51.80 lakh in cash in a current account maintained with a cooperative bank, noting that the assessee failed to produce books of account or documentary evidence.

Despite this, the issuance of statutory notice under section 143(2) and 142(1) of the Income Tax Act 1961, the assessee failed to appear or furnish details explaining the nature and source of the cash deposit. The assessment was completed under Section 144, and the entire cash deposit was initially treated as unexplained income under Section 68.

The tribunal observed that, after hearing the departmental representative, the assessee had not cooperated at any stage of the proceedings and had failed to substantiate his claims with evidence.

In such circumstances, the tribunal held that the estimation of income at 8% was reasonable and does not call for any interference.

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