ITO Vs Deepak (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2013-14, upholding the application of a 1% profit rate on the gross value of bank transactions instead of treating the entire bank deposits as taxable income.
The assessee, an individual, had not filed a return of income for the relevant assessment year. Based on information available on the ITBA portal, the Assessing Officer (AO) found cash deposits exceeding Rs. 14.08 crore in the assessee’s bank accounts along with TDS of Rs. 49,040 deducted under Section 194H. As no return was filed and the assessee did not respond to notices issued under Sections 148 and other provisions during reassessment proceedings, the AO completed the reassessment under Sections 147, 144 and 144B and added the entire bank transactions of Rs. 14,08,85,390 as income.
The assessee challenged the reassessment before the CIT(A), contending that identical facts had arisen in the immediately preceding Assessment Year 2012-13. In that year, the AO had accepted that the assessee was engaged in the consignment sale business of “Khal Binola” as a commission agent and had estimated income by applying a 1% commission rate on the total bank deposits instead of treating the entire deposits as income.
