SRI KUMARAN MARKETTING,KANGAYAM V. WARD 1(4), TPR, TIRUPUR

ITA 1775/CHNY/2024

AI Insights

The case involves Sri Kumaran Marketing, a wholesale trader of fast-moving consumer goods (FMCG), who appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi. The appeal was directed against the addition of \\u20b921,21,378 to the assessee's income for the assessment year 2017-18, which was 5% of a total credit transaction of \\u20b94,24,27,560. The Assessing Officer had initially estimated the profit at 8% of the gross turnover due to unexplained cash deposits, which was later reduced to 5% by the CIT(A). The Tribunal dismissed the appeal, agreeing with the CIT(A)'s decision and rejecting the assessee's request to further reduce the profit margin to 1.5%.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107442 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 21-06-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI MANIVASAGAM
• Assessee Lawyers: N. HARI NANDAKUMAR; BY VIRTUAL
• Keywords: Business income
• Section: 144

Judgement Text

"आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी एस.आर. रगुनाथॎ, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member आयकर अपील सं./I.T.A. No.1775/Chny/2024 िनधाŊरण वषŊ/Assessment Year: 2017-18 Sri Kumaran Marketing, 10/163,, Bungalapudur Road, Kangayam 638 701, Tamil Nadu. [PAN: ABXFS1089B] Vs. The ACIT/Income Tax Officer, Ward 1(4),TPR, Tirupur. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri N. Hari Nandakumar, CA by virtual ŮȑथŎ की ओर से/Respondent by : Ms. Gouthami Manivasagam, JCIT सुनवाई की तारीख/ Date of hearing : 16.10.2024 घोषणा की तारीख /Date of Pronouncement : 23.10.2024 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 02.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. The only ground raised by the assessee in challenging the action of the ld. CIT(A) in confirming the addition of ₹.21,21,378/- i.e., 5% on the total credit transaction of ₹.4,24,27,560/- without comparing the earlier years GP ratio. I.T.A. No.1775/Chny/24 2 3. At the outset, we note that the assessee has deposited cash of ₹.4,24,27,560/-. As there was no explanation for the same, the Assessing Officer completed the assessment under section 144 of the Income Tax Act, 1961 [“Act” in short] by estimating the profit at 8% of gross turnover of ₹.4,24,27,560/-. Accordingly, the addition of ₹.33,94,365/- was added to the total income of the assessee. The ld. CIT(A) restricted the same at 5% to an extent of ₹.21,21,378/-. 4. The ld. AR Shri N. Hari Nandakumar, CA (by virtual) submits that the assessee is engaged into wholesale trading fast moving consumer goods [FMCG] and the assessee has margin profit between 1 to 1.5%. 5. The ld. DR Ms. Gouthami Manivasagam, JCIT vehemently opposed the same and relied on the order of the Assessing Officer. 6. We note that admittedly, the Assessing Officer applied 8% on gross turnover treating the cash deposit as found in the bank account. There is no dispute with regard to the cash deposit are out of assessee’s business income. The ld. CIT(A) also did not dispute the same and further restricted to 5% of the gross turnover. Vehement contention of the ld. AR that there is no profit of 5% in the trading of FMCG and prayed to restrict the same at 1.5% of the total turnover. We find no past history brought on I.T.A. No.1775/Chny/24 3 record by the ld. AR in this respect. Having no past history or the profit margin of subsequent year, we have no option but to accept to confirm the order of the ld. CIT(A), which is, in our opinion, reasonable and justified. Therefore, cash deposit as found in the bank account to an extent of ₹.4,24,27,560/- are business receipts out of which the addition restricted by the ld. CIT(A) at 5% i.e., 21,21,378/- is sustained. Thus, the ground raised by the assessee is dismissed. 7. In the result, the appeal filed by the assessee is dismissed. Order pronounced on 23rd October, 2024 at Chennai. Sd/- Sd/- (S.R. RAGHUNATHA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 23.10.2024 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "