Manglam Sales Corporation Vs ITO (ITAT Delhi)
ITAT Delhi held that addition under section 69A of the Income Tax Act towards cash deposited during demonetization period deleted to the extent of cash sales which is accepted. Accordingly, appeal partly allowed.
Facts- The assessee’s case was selected for scrutiny assessment in CASS in the category of complete scrutiny including the issue of cash deposit made by assessee during demonetization period.
AO concluded that the cash deposit during demonetization period in the bank account from undisclosed sources is unexplained and also rejected the books of accounts u/s 145(3) of the Act for the reason that the assessee could not furnish relevant details or produced evidences in support of its claim of sales. Accordingly, AO framed assessment u/s 144(1) of the Act. The AO estimated the profit applying GP at 10% of total turnover of Rs.64,72,750/- i.e. Rs. 1,24,50,750/–Rs. 59,78,000/- and thereby, estimated the profit at Rs. 6,47,275/-. Apart from this, the AO made addition of unexplained money being cash deposit made during demonetization period of Rs.59.78,000/-u/s 69A of the Act.
CIT(A) uphold the action of the AO for rejection of books of accounts and estimated the net profit @ 5% as against the estimation made by AO @10% on the total turnover accepted by AO at Rs.6,47,275/-. Aggrieved, assessee is in appeal before Tribunal.
