Dinesh Saha Vs ITO (ITAT Kolkata)
Assessment was completed by making additions of Rs. 5,47,443/- by estimating enhancement in profit (which is the difference between Gross profit @1.37% of turnover and net profit declared by assessee), Rs. 30,01,129/- u/s 68 on account of unverified sundry creditors and Rs. 56,45,000/- u/s 69A on account of cash deposited during the demonetization. CIT (A) confirmed the additions made by the AO.
It was argued on behalf of the assessee that once the gross profit/net profit has been enhanced through an estimation without rejecting the books of accounts, then no other addition would be possible. Reliance was placed on decision of the Hon’ble Delhi High Court in the case of CIT vs. Ritu Anurag Agarwal reported in ITA No. 325/2008 and it was argued that no addition u/s 68 could be made on account of trade creditors when the books of accounts have not been rejected. Once regular books of accounts have maintained then on mere suspicion, cash deposited during the demonetization period could not be subject to the rigors of section 68. On the other hand, revenue argued that assessee did not produce any books of accounts or vouchers before AO and CIT(A) and therefore, any effort to prove the genuineness of the transactions at the stage of hearings before the Hon’ble ITAT would not be proper since the primary responsibility of producing the books of accounts etc. before the ld. AO were not fulfilled by the assessee.
