SATYENDRA KUMAR MISHRA,SONEBHADRA V. INCOME TAX OFFICER, WARD - III (4), SONEBHADRA

ITA 124/VNS/2023

AI Insights

The case involves Satyendra Kumar Mishra, an individual engaged in transport commission and subcontract business, who appealed against the order of the National Faceless Assessment Centre (NFAC), Delhi. The NFAC had passed an assessment order under sections 147 and 143(3) of the Income Tax Act for the Assessment Year 2011-12, which included an addition of Rs. 37,19,000 to the assessee's income, attributed to unexplained cash deposits in his bank account. The Income Tax Officer (ITO) had issued a notice under section 148, leading to the reassessment. The assessee contested the validity of the reopening and the addition of the said amount, arguing that the deposits were from legitimate business activities and previous cash balances. The Tribunal, after considering the submissions and the nature of the business, partly allowed the appeal by estimating a net profit on the disputed cash deposits rather than treating the entire amount as income.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473607 (ITAT-VARANASI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 11-09-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA MEENA
• Assessee Lawyers: ASHISH BANSAL
• Keywords: Depreciation
• Section: 147; 148; 205; 44AD

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.124/VNS/2023 (Assessment Year :2011-12) Satyendra Kumar Mishra Chopan Barrier Chopan Sonebhadra – 231 205 Uttar Pradesh Vs. Income Tax Officer Ward-III(4) Robertsganj Sonebhadra PAN/GIR No.ACXPM8718L (Appellant) .. (Respondent) Assessee by Shri Ashish Bansal Revenue by Smt Kavita Meena Date of Hearing 11/09/2024 Date of Pronouncement 29/11/2024 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 27/10/2023 passed by NFAC Delhi for the quantum of the assessment passed u/s 147 r.w.s.143(3) for the Assessment Year 2011-12. 2. In various grounds of appeal assessee has challenged the validity of reopening and notice u/s.148 and addition of Rs.37,19,000/- on account of cash deposited in the bank account with the ICICI bank. The assessee is an individual who had declared income from transport commission and some ITA No.124/VNS/2023 Satyendra Kumar Mishra 2 contract business u/s.44AD. The assessee had declared gross receipts from parties towards transport commission /sub- contract at Rs.30,49,450/- and after taking account the amount paid to the transporters of Rs.21,36,000/-, had shown net commission of Rs.9,13,450/- and also claimed various expenses. The ld.AO noted that there was an information that assessee had deposited Rs.37,19,000/- in his bank account and no return had been filed by the assessee. Various notices sent by the ld. AO through email, however no compliance was made. Accordingly, notice u/s.148 was issued on 28/03/2018. 3. In response to the notice u/s.148, assessee had submitted copy of return on 06/12/2018, whereby, he had given balance sheet, profit and loss account and also details of Rs. 21,36,000/- paid to the transporters. Further assessee also stated that he was also doing transport business and commission and also owns one old truck. Since assessee could not furnish proper explanation of the cash deposits, ld. AO added entire amount of Rs.37,19,000/-. The ld. CIT (A) in his exparte order has confirmed the validity of notice u/s 148 and also the additions made by the ld. AO. 4. After hearing the ld. Counsel and ld. DR and on going through material placed on record, I find that although there was no original return of income filed, however, in response to notice u/s.148, assessee has declared income of Rs.1,58,790/-, break up of which is as under:- ITA No.124/VNS/2023 Satyendra Kumar Mishra 3 i) Income from business Income under section 44AD Receipts: Rs.9,13,450/- Deemed Profit: Rs. 73,076/- (being 8%) ii) Net Profit Declared: Rs.1,47,745/-(being 16.17%) Particulars Amount Particulars Amount Amount Salary to Staff 72,000 Gross Receipt from parties towards Transportatio n Commission/ Sub Contract 30,49,450 Office Rent 18,000 Less: Amount paid to the transporters 21,36,000 Printing & Stationery 2,352 Net Commission & 9,13,450 ITA No.124/VNS/2023 Satyendra Kumar Mishra 4 Travelling Expenses Telephone Expenses Labour Charges Power & Fuel Office Expenses Misc. Expenses Depreciation Net Profit Total: 9,468 5,220 4,75,770 1,55,652 7,208 9,217 10,818 1,47,745 9,13,450 Sub-Contract Total: 9,13,450 5. It has been stated before us that the deposit in the bank account was out of collection made from transport commission, sub-contract business and out of cash balance available with him from the earlier year and there was cash withdrawal made during the year of Rs.17,28,000/-. Since assessee could not provide explanation before the ld.AO and before the ld. CIT (A) the addition has been confirmed. 6. From the perusal of the records, it cannot be denied that assessee was carrying out some kind of business which has been stated to be transport commission / sub-contract and was also having an old truck. The total gross receipts have been shown at Rs.30,49,450/- out of which it has been stated that amount had been paid to the transporters of Rs.21,36,000/-. The entire assessed income made by the ld. AO is on account of cash ITA No.124/VNS/2023 Satyendra Kumar Mishra 5 deposit. The said cash deposit has been stated to be received from various parties in respect to transport business and it is also evident from the fact that assessee has also withdrawn huge money to be paid to the transporters. Thus, the entire cash deposits cannot be treated as income of the assessee. Under these facts, I find that only source of income to the assessee was transport business therefore, it would be proper to estimate some net profit on the entire cash deposits. Since assessee had already declared net profit it would be proper to estimate 8% of cash deposit of Rs. 37,19,000/- and since assessee had already declared net profit of Rs.1,47,745/-, the balance amount shall be added as income of the assessee. 7. In the result, appeal of the assessee is partly allowed. Order pronounced on 29/11/2024. Sd/- (AMIT SHUKLA) JUDICIAL MEMBER Varanasi; Dated 29/11/2024 KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// ITA No.124/VNS/2023 Satyendra Kumar Mishra 6 BY ORDER, (Asstt. Registrar) ITAT, Varanasi "