Polepalli Srinivasulu Gupta Vs DCIT (ITAT Visakhapatnam)
Assessee consistently deposited sale proceeds realized by way of cash, such deposit is in accordance with law, addition deleted
Facts-
AO considered the seized material during the search operation and also deposition of the assessee u/s 131(1A) wherein the assessee has admitted unaccounted sales of Rs. 31,64,40,122/-. AO didn’t considered either the net profit as adopted by the assessee in the deposition u/s 131(1A) or as per ROI filed by the assessee for the previous years. However, while framing the assessment, AO adopted the gross margin of the assessee as per P&L account.
Additions were also made u/s 69A on account of cash deposits made during the demonetization period.
Appeal filed before CIT(A) was confirmed ex-parte as the assessee did not appeared. Being aggrieved, the assessee preferred the present appeal.
Conclusion-
The net profit ratio of 8% as declared by the assessee in various AYs while filing the return of income for the respective AYs should have been adopted by the AO while making additions to the total income of the assessee.
We note that the cash sales made by the assessee deposited in the bank account are in accordance with law and hence the addition made by the AO is deleted. From the submissions made by Ld AR, we find that the assessee is consistently depositing the sale proceeds realized by way of cash.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
All the captioned appeals are filed by the assessee against the orders of the Ld. CIT(A)-12, Hyderabad in appeal No.10108, 10111, 10114, 10119, 10124, 10126 & 10141/2018-19, dated 28/10/2021 arising out of the order passed U/s. 143(3) r.w.s 153A and U/s. 250(6) of the Act for the AYs 2011-12 to 2017-18 respectively.
2. Brief facts of the case are that the assessee is a distributor of soaps and detergents for M/s. Bharathi Soap Works and M/s. Bharathi Consumer Care Products Pvt Ltd. A search and seizure operation U/s. 132 was conducted in the premises of Managing Director of M/s. Bharathi Consumer Care Products Pvt Ltd and consequently the distributers and suppliers were also covered in the search operations on 30/08/2016. Notice was issued U/s. 153A on 20/03/2017 served on the assessee on 27/03/2017. In response, the assessee filed return of income on 11/4/2017 admitting a total income of Rs. 2,06,110/- as admitted in the original return of income U/s. 139(1) of the Act. Notices U/s. 143(2) and 142(1) were issued and served on the assessee. In response, the assessee’s AR filed information and explanations called for by the AO. The Ld. AO considered the seized material during the search operation and also the deposition of the assessee U/s. 131(1A) wherein the assessee has admitted unaccounted sales of Rs. 3 1,64,40,122/- as per the details given below:
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