TAHIDUL ISLAM,MURSHIDABAD V. I.T.O., WARD - 42(3), MURSHIDABAD

ITA 486/KOL/2025

AI Insights

The case involves Tahidul Islam, who appealed against the order of the National Faceless Appeal Centre, Delhi, which confirmed the addition of \\u20b9 61,35,550 to his income for the Assessment Year 2016-17. This addition was based on a discrepancy between the total deposits in his bank accounts and the sales turnover declared under Section 44AD of the Income Tax Act. The Income Tax Officer had treated the difference as undisclosed turnover and added it to the assessee's income. The Tribunal found that the entire turnover cannot be treated as income and estimated the income on the same rate as declared by the assessee, i.e., 8% on the suppressed turnover.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706896 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 07-03-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: S. K. TULSIYAN
• Keywords: Set aside; Business income
• Section: 144; 143(3); 142(1); 44AD

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.486/KOL/2025 (Assessment Year: 2016-17) Tahidul Islam Jadupur, Berhampore, Murshidabad-742405 West Bengal Vs. Income Tax Officer Ward-42(3), 39, R.N. Tagore Road, Berhampore, Murshidabad-742101, West Bengal (Appellant) (Respondent) PAN No. ABIPI3523P Assessee by : Shri S.K. Tulsiyan, AR Revenue by : Shri S.B. Chakraborthy, DR Date of hearing: 19.05.2025 Date of pronouncement: 10.07.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 18.02.2025 for the AY 2016-17. 02. The only issue pressed at the time of hearing is against the confirmation of addition of ₹61,35,550/- by the ld. CIT (A) as made by the ld. AO on account of difference between the total deposits found in the bank account with ICICI bank and Axis Bank vis a vis total sales turnover/ gross sales declared by the assessee as per the scheme of Section 44AD of the Act. Page | 2 ITA No.486/KOL/2025 Tahidul Islam; A.Y. 2016-17 03. The Facts in brief are that the assessee filed the return of income on 15.12.2016, declaring the total income at ₹3,80,950/- by filing the return of income u/s 139(4) of the Act, which was processed u/s 143(1) of the Act accepting the return of income. The case of the assessee was selected for scrutiny on the ground that large cash deposits into the savings bank account. Accordingly, statutory notices u/s 143(3) and 142(1) of the Act were issued. There was no compliance on the part of the assessee, thereafter show cause notice was issued to the assessee to explain as to why the proceeding should not be completed ex parte. The ld. AO found that the assessee has disclosed total sales u/s 44AD of the Act in the return of income at ₹66,03,850/-, whereas the total deposits in the two bank accounts with ICICI bank and Axis Bank were ₹1,27,39,400/- and hence there was a difference of ₹61,35,550/-. Accordingly, the ld. AO treated the said amount as assessee’s undisclosed turnover and consequently added the same to the income of the assessee in the assessment framed u/s 144 of the Act vide order dated 26.12.2018. 04. In the appellate proceedings also the appeal of the assessee was dismissed by the ld. CIT (A) upholding the assessment order by not condoning the delay. 05. After hearing the rival contentions and perusing the materials available on record, we find that the assessee in the return of income has declared total turnover of ₹66,03,850/-, whereas the total deposits in two bank accounts namely ICICI bank and Axis bank were ₹1,27,39,400/- and thus, there was a difference of ₹61,35,550/-. We note that AO treated this as undisclosed turnover at page no. 2 second last para in the assessment order and added the said amount to the total income of the assessee, which in our opinion is incorrect Page | 3 ITA No.486/KOL/2025 Tahidul Islam; A.Y. 2016-17 as the entire turnover cannot be treated as income and added to the income of the assessee. Though the proceedings were ex-parte before the ld. AO but the ld. AO has to assess/estimate the income on the basis of surrounding facts and circumstances which are reasonable and has some basis. Similarly in the case of appellate proceedings before the ld. CIT (A), the delay was not condoned and the appeal was dismissed in limine which is also not correct. Though the proceedings culminated ex-parte before the first appellate authority, we are not restoring the issue to the file of the ld. AO or ld. CIT (A), since, the ld. AO has recorded clear finding that cash deposits into two bank accounts and declared turnover in the return of income filed by the assessee were on account of suppressed sales made by the assessee. Therefore, in our opinion it would be reasonable and fair if the income is estimated on the same rate as declared by the assessee. i.e. at the rate of 8% on the suppressed turnover. Needless to mention that it has been held by higher judicial forums in a series of the cases that even if the case was decided ex-parte below the authorities below, the tribunal is duty bound to decide the issue on merits. Accordingly in view of the above discussion, we set aside the order of ld. CIT (A) and direct the ld. AO to add a sum of ₹4,90,844/- being 8% of the suppressed turnover of ₹61,35,550/-. 06. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 10.07.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 10.07.2025 Sudip Sarkar, Sr.PS Page | 4 ITA No.486/KOL/2025 Tahidul Islam; A.Y. 2016-17 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "