PRINCE TYGAI,MOHALI V. INCOME TAX OFFICER, WARD 6(4), CHANDIGARH

ITA 968/CHANDI/2024

AI Insights

The case involves an appeal by Shri Prince Tyagi against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which was based on an assessment made by the Assessing Officer under section 144 of the Income Tax Act. The assessment included a significant addition to the assessee's income due to unexplained cash deposits. The Tribunal considered the evidence presented, including the nature of the assessee's business and the sources of the deposits, and decided to adjust the estimated income based on a 4% profit rate on the turnover, after allowing credit for the income already returned.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714246 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: RAHUL BHANOT; PUNEET
• Keywords: Business income; Unexplained investment
• Section: 144

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.968/CHANDI/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-18) Shri Prince Tyagi # 87 Ward No 1, Near Petrol Pump Mandi Kharar SAS Nagar, Mohali 140301 बनाम/ Vs. ITO Ward-6(4) Chandigarh 160062 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ANGPT-5979-E (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎ की ओर से/ Appellant by : Sh. Rahul Bhanot( Advocate) and Shri Puneet Singla (Advocate) – Ld. ARs ŮȑथŎ की ओर से / Respondent by : Dr. Ranjit Kaur (Addl.CIT) – Ld. Sr.DR सुनवाईकीतारीख/Date of Hearing : 23-07-2025 घोषणाकीतारीख /Date of Pronouncement : 04-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 05-06-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgement basis u/s 144 of the Act on 19-12-2019. The registry has noted delay of 40 days in the appeal Printed from counselvise.com 2 which stand condoned. Having heard rival submissions, the appeal is adjudicated as under. 2. In the assessment order, Ld. AO made addition of cash deposit for Rs.345.13 Lacs to the returned income of Rs.3.86 Lacs for want of any representation from the assessee. The deposits were made in Bank of Baroda Account No.50530400000068 held in the name of M/s Surkum Enterprises. During first appeal, the assessee contended that it was engaged in selling recharge coupons of idea cellular Ltd. and working as an agent for the company on commission basis. During business, the cash is collected from customers which is deposited and transferred to the company. The commission so earned was stated to be reflected in the return of income. In support, the assessee furnished copy of agreement with Idea cellular Ltd. and ledger of Surkum Enterprise with Idea Cellular Ltd. The same were subjected to remand proceedings which could not be furnished by Ld. AO which led Ld. CIT(A) appeal to adjudicate the appeal on the basis of material as available on record. 3. It was noted by Ld. CIT(A) that there was deposit of Rs.213.18 Lacs. The perusal of bank statement would substantiate the stand that the assessee was involved in sale of SIM card and data recharge of idea cellular Ltd. However, the assessee did not furnish any evidence to prove the quantum of income from such business. Further, there were payments made to various entities which aggregated to Rs.5.72 Lacs (tabulated at para 6.8 of the impugned order). Further, the assessee introduced funds on various dates, the source of which could Printed from counselvise.com 3 not be proved by the assessee. These investments aggregated to Rs.15.75 Lacs (tabulated at para 6.9). On these facts, Ld. CIT(A) estimated profit rate of 5% on turnover of Rs.197.43 Lacs. To account for other transactions / unexplained investment, Ld. CIT(A) directed Ld. AO to estimate overall business income of Rs.18 Lacs subject to grant of credit of returned income of Rs.3.86 Lacs. Still aggrieved, the assessee is in further appeal before us. 4. We find that issue to be in a narrow compass. From perusal of adjudication of Ld. CIT(A), it could be seen that the assessee is not fully able to substantiate the quantum of business income. However, Ld. AR has tabulated source of each of the unexplained investment aggregating to Rs.15.75 Lacs in the paper-book. Upon perusal of the same, it could be seen that the entries of Rs.9 Lacs, Rs.2.85 Lacs and Rs.1.50 Lacs represent cash withdrawal from one bank account and deposit thereof in another bank account. The other transactions of Rs.2.40 Lacs represent bank transfer from friends and family of the assessee. Therefore, the source of these investments could not be doubted. On these facts, with a view to settle the dispute, we hold that overall estimated addition of 4% on turnover of Rs.197.43 Lacs would meet the end of justice. The credit of returned income of Rs.3.86 Lacs would be granted to the assessee. The Ld. AO is directed to re- compute the income of the assessee accordingly. No other ground has been urged in the appeal. Printed from counselvise.com 4 5. The appeal stand partly allowed. Order pronounced on 04-08-2025. Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 04-08-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "