The Income Tax Appellate Tribunal (ITAT), Delhi Bench ruled that cash deposits are not verified with business receipts or cash withdrawals and uphold addition under income tax section 68 of the Act.
The taxpayer M/s. Sneh Developers Pvt. Ltd., does not file an ITR, thus the Assessing Officer gave a notice beneath section 148. In the assessment proceedings, the Assessing Officer added cash deposits of Rs.10,00,000 under section 68 of the Act articulated that the taxpayer is not able to clarify the cash deposits source.
On appeal, the CIT(A) said that the addition and not maintaining the books of accounts, non-cooperation in the assessment proceedings and the remand proceedings, adverse remarks provided in the audit report, and keeping the view the arguments of the presumptive taxation ruled that the same was fair to evaluate the profits at 15%. The aggrieved petitioner approached ITAT.
The tribunal sees that under section 138 of the NI act on 8 accounts and the civil suit on 2 accounts the taxpayer is facing criminal cases. The tribunal sees that the cash deposits are not corroborated with any receipts of the business and any cash withdrawals proving the same.
The Coram of Mr Aakash Deep Jain, Vice President, and Dr B. R. R. Kumar, Accountant Member during upholding the addition ruled that “keeping in view, the entirety of the facts and circumstances, we hold that justice would be well served by directing the revenue to estimate the profits at 8%”. The Tribunal said that “we unequivocally hold that the cash deposits cannot be treated as the integral part of the receipts reflected in Form 26AS“.
