Suryakant Jaglal Jaiswal Vs ITO (ITAT Nagpur)
When ₹3.72 Lakh Became ₹3.74 Crore: ITAT Applies the “Hundred-Times Error” Brake &; Restores Additions u/s 56(2)(vii)(b), 144 &; 147
Facts of the Case
The assessee, an individual, had not filed his return of income for AY 2019-20. The Income-tax Department received information relating to the assessee’s purchase of alcoholic liquor, interest income earned from the Life Insurance Corporation of India & investment in immovable property.
Based on this information, the AO reopened the assessment by issuing notice u/s 148. Other statutory notices were also issued & served upon the assessee. As only partial submissions were furnished during the proceedings, the AO completed the reassessment u/s 147 r.w.s. 144 & 144B.
Two major additions were made.
First, relying upon the information appearing in Form 26AS, the AO treated an amount of ₹4,16,82,994 as the assessee’s turnover from the liquor business. Applying an estimated net profit rate of 8%, the AO computed business income at ₹33,34,640.
Secondly, the AO noticed that the assessee had purchased immovable property for a declared consideration of ₹11,75,000, whereas its value for stamp-duty purposes was ₹23,30,000. The difference of ₹11,55,000 was added as income by invoking section 56(2)(vii)(b).
The Tribunal’s order describes the aggregate disputed addition as ₹45,18,532, comprising the estimated profit & the property-related addition.
