SAJAL BANSAL,KAITHAL, HARYANA V. INCOME TAX OFFICE, WARD-2, KAITHAL, INCOME TAX OFFICE, AMBALA ROAD, KAITHAL

ITA 956/CHANDI/2024

AI Insights

The case revolves around an appeal by Shri Sajal Bansal against the order of the Commissioner of Income Tax (Appeals), which confirmed an addition of Rs.35.36 Lacs to his income for the Assessment Year 2017-18. The addition was initially made by the Assessing Officer on the best judgment basis due to alleged incomplete information regarding cash deposits during the demonetization period. The Tribunal examined the regularity and audit of the assessee's books, the consistency of reported turnover and profit rates over the years, and the absence of specific defects pointed out by the Assessing Officer. Ultimately, the Tribunal concluded that the books of accounts were correctly maintained and the income reported by the assessee should be accepted.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712139 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: ASHOK GOYAL; SIFATPREET
• Keywords: Business income
• 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.956/CHANDI/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-18) Shri Sajal Bansal House No. 941 Huda Sector 19 Part 2, S.O. Kaithal Kaithal-136027 Haryana बनाम/ Vs. ITO Ambala Road Kaithal ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.AAXPB-4803-B (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Ashok Goyal (CA) and Shri Sifatpreet Singh (CA) – Ld. ARs ŮȑथŎकीओरसे/Respondent by : Dr Ranjit Kaur (Addl.CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 16-07-2025 घोषणाकीतारीख /Date of Pronouncement : 23-07-2025 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 Central (NFAC), Delhi [CIT(A)] dated 22-07-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s. 144 r.w.s.143(3) Printed from counselvise.com 2 of the Act on 30-12-2019. The sole grievance of the assessee is confirmation of addition of Rs.35.36 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed- off as under. 2. To examine sources of cash deposits in bank account during demonetization period, the assessee’s return of income was subjected to scrutiny. In the absence of complete information forthcoming from the assessee, Ld. AO rejected the books u/s 145(3) and adopted profit rate of 2% on total turnover of Rs.17.68 Crores and made impugned addition of Rs.35.36 Lacs. The Ld. AO also made separate addition of unexplained cash deposit for Rs.28.30 Lacs which stood deleted in first appeal and the same do not form subject matter of present appeal before us. 3. During appellate proceedings, the assessee’s submissions were subjected to remand proceedings. The remand report was confronted to the assessee. The assessee objected to rejection of books on the ground that it maintained regular books of accounts which were duly audited under law. It was also submitted that the assessee was a VAT dealer and it furnished copy of accounts, bills, vouchers, bank statements etc. before Ld. AO to substantiate its business income. However, Ld. CIT(A) confirmed addition of Rs.35.36 Lacs against which the assessee is in further appeal before us. 4. It emerges that the assessee is engaged in wholesale business of Mobile Phones. The assessee has maintained regular books of accounts which are duly audited under law. The assessee has Printed from counselvise.com 3 achieved turnover of Rs.17.68 Crores which are subjected to VAT and all the sales transactions have duly been reported to VAT authorities. The sales and purchase transactions are duly evidenced by relevant invoices and there is no adverse finding by Tax Auditor. There is no doubt on the purchases as made by the assessee. The rate of profit as reflected by the assessee over various AYs is as under: - No. AY Turnover GP Rate NP Rate 1. 2018-19 Rs.21.11 Crores 1.14% 0.35% 2. 2017-18 Rs.17.68 Crores 1.20% 0.36% 3. 2016-17 Rs.11.47 Crores 1.21% 0.59% 4. 2015-16 Rs.15.81 Crores 1.20% 0.41% 5. 2014-15 Rs.15.28 Crores 1.22% 0.32% Upon perusal of profitability chart, it could be seen that the GP rate and NP rate as reflected by the assessee in this year is commensurate with corresponding rates of earlier years as well as subsequent year. Apparently, there is no change in the business model of the assessee. No specific defect has been pointed out by Ld. AO in the books of the assessee. On these facts, rejection of books u/s 145(3) and consequential estimation of profit rate could not be upheld. We order so. The impugned addition of Rs.35.36 Lacs stand deleted. The Ld. AO is directed to accept the business income as reflected by the assessee. No other plea has been urged in the appeal. 5. The appeal stand allowed. Order pronounced on 23-07-2025. Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Printed from counselvise.com 4 Dated: 23-07-2025. 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 "