B.V. Yogish Vs ITO (ITAT Bangalore)
ITAT Bangalore Restores Assessment—Petrol Pump Owner’s Cash Deposits & Low Profit Need Fresh Verification
Assessee, proprietor of KVG Petroleums, filed return declaring ₹5.71 lakh income on turnover of ₹13.49 crore (0.42% profit). AO noticed the low profit margin compared to 1.2% in earlier years &, in absence of details of expenses, estimated business income at ₹13.48 lakh. He further observed cash deposits of ₹31.52 lakh during demonetisation, allowed credit for ₹11.02 lakh, & added the balance ₹20.15 lakh as unexplained, completing ex-parte assessment u/s 144.
CIT(A) issued multiple notices but none were complied with, & the order of AO was upheld. Before ITAT, the Assessee explained that he suffered the death of his son in September 2018, leading to serious health issues & non-compliance. He filed an affidavit & death certificate, stating that the books were audited, profits were low due to market conditions, & cash deposits represented sale proceeds from the petrol pump business.
Tribunal accepted the explanation as genuine. It observed that mere low profit does not justify an addition unless books are found defective, & cash sales recorded in audited books cannot be treated as unexplained. Considering the adverse personal circumstances & lack of proper hearing, the Tribunal found it appropriate to restore the matter.
