Case Law Details
Sukumar Mondal Vs ITO (ITAT Kolkata)
The first contention raised by the ld. Counsel for the assessee is that the case of the assessee having been selected for limited scrutiny on the issue of cash deposits in the Bank accounts being more than the turnover, the scope of the assessment was limited and the Assessing Officer was not justified to make the addition on account of profit allegedly earned by the assessee on undisclosed turnover, which was an altogether different issue. We are unable to accept this contention of the ld. Counsel for the assessee. While examining the issue of cash deposits in the Bank accounts of the assessee being more than the turnover, it was found by the Assessing Officer that two Bank accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank were not reflected in the accounts of the assessee. He also noticed that huge deposits aggregating to Rs.5,42,38,779/- were made in the said Bank accounts and since the said Bank accounts were found to be not reflected in the accounts of the assessee, the same were treated by him as the undisclosed turnover of the assessee’s business and estimated profit thereon was added by him to the total income of the assessee. It is thus clear that the impugned addition made by the Assessing Officer on account of profit allegedly earned by the assessee on undisclosed turnover was directly related to the ground on which the case of the assessee was selected for limited scrutiny and the same being fall-out of the verification made by the Assessing Officer on the issue on which the case of the assessee was selected for limited scrutiny, we do not find merit in the contention raised by the ld. Counsel for the assessee that the impugned addition made by the Assessing officer is beyond the scope of limited scrutiny.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-14, Kolkata dated 21.11.2019 and the solitary issue involved therein relates to the addition of Rs.51,63,531/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of the profit allegedly earned by the assessee on undisclosed turnover.
2. The assessee in the present case is an individual, who is engaged in the business of distribution of food and supply of Ration Goods and dealing in Lafarge and ACC Cement. The return of income for the year under consideration was filed by him on 17.09.2014 declaring total income of Rs.5,54,330/-. The said return was selected for limited scrutiny on the ground that the cash deposits found to be made in the Savings Bank Accounts of the assessee were more than the turnover. During the course of assessment proceedings, the Assessing Officer found that the assessee has maintained three Bank accounts namely Account No. 10380100001206 with Paschim Banga Gramin Bank, Account No. 08160510000298 with UCO Bank, Shyampur and Account No. 11245243909 with State Bank of India. He also found that out of the said three Bank accounts, the balance of only one Bank account with State Bank of India was reflected in the audited balance-sheet filed by the assessee, whereas the balances of the remaining two Bank accounts maintained with Paschim Banga Gramin Bank and UCO Bank were not reflected in the balance-sheet. He also noticed that interest charged in one account and interest credited in the other accounts had also not been reflected in the accounts of the assessee. Keeping in view these serious discrepancies in the accounts of the assessee, the Assessing Officer treated the total deposits found to be made in the two Bank accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank aggregating to Rs.5,42,38,779/- as the undisclosed turnover of the assessee’s business and applying a gross profit rate of 9.52% as reflected in the audited accounts of the assessee, he made an addition of Rs.51,63,531/- to the total income of the assessee in the assessment completed under section 143(3) of the Act vide an order dated 23.11.2016.
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