ACIT Vs Tarun Tulsian (ITAT Delhi)
The ITAT Delhi dismissed the Revenue’s appeal against the order of the CIT(A)/NFAC for AY 2018-19, which had deleted an addition of ₹6,68,43,219 made under Section 68 of the Income-tax Act, 1961. The Assessing Officer had treated the difference between the assessee’s disclosed turnover of ₹14,82,43,587 and cash deposits of ₹21,52,03,300 in two bank accounts as unexplained cash credits after giving credit for the returned income.
During the appellate proceedings, the assessee explained that, while computing the alleged unexplained income, the Assessing Officer had ignored the indirect tax component on sales and purchases. The assessee furnished details of month-wise sales, VAT/GST, cash collections, bank deposits and certified copies of GST returns. The CIT(A) examined the profit and loss account, bank statements, GST returns and the reconciliation furnished by the assessee.
The CIT(A) found that the turnover disclosed in the income-tax return and the GST return was ₹14,82,43,586.29. Applying the inclusive method under Section 145A, the total turnover, including indirect taxes, worked out to ₹26,94,03,705. The assessee had disclosed cash collections from sales of ₹23,46,78,587, while the cash deposited in the bank accounts amounted to ₹21,52,03,300. The CIT(A) concluded that the cash deposits formed part of the gross turnover, inclusive of GST, and deleted the addition after considering the documentary evidence.
