Subbiah Rajendran Vs ITO (ITAT Chennai)
ITAT Chennai restricts addition on cash deposits – Treats assessee as commission agent, estimates income at 4% instead of taxing entire deposits
Assessee, an individual engaged in onion commission business, did not file return of income for AY 2012-13. Based on information of cash deposits of ₹1,00,31,039/- in ICICI Bank, AO issued notices u/s 148 & 142(1). As there was no compliance, AO reopened the assessment u/s 147 & completed it ex-parte u/s 144 r.w.s.147, treating the entire cash deposits as unexplained money u/s 69A & made full addition.
Before CIT(A), Assessee explained that he was only a commission agent in onion trading & the cash deposits represented gross business receipts, not his income. It was also submitted that in earlier years, the Department had accepted this nature of business & had taxed only estimated commission. Reliance was placed on assessment order u/s 143(3) for AY 2009-10 wherein only ₹2 lakh was added as estimated commission income. However, CIT(A) rejected the explanation & confirmed the entire addition.
Before Tribunal, Assessee reiterated that as a commission agent with low margins, the entire cash deposit cannot be treated as income. It was also submitted that no books were maintained, which is typical in this line of business, & past assessments support the estimation approach. Revenue argued that Assessee failed to comply with notices & no satisfactory explanation was given.
