Deepanshu Srivastava Vs DCIT (ITAT Delhi)
Core Issue:- The core issue involved (i) validity of rejection of books of account under section 145(3), (ii) estimation of income by applying higher gross profit rate in absence of supporting evidence and alleged bogus purchases, and (iii) addition under section 69A on account of unexplained cash deposits during the demonetisation period.
Detailed Facts:– The assessee, engaged in the business of trading in scrap through proprietorship concerns namely Nishi Paper & Print Pack and Baba Industries, filed return declaring income of ₹23.54 lakh. The case was selected for scrutiny under CASS on the ground that substantial purchases were made from parties who were either non-filers or had reported low turnover.
During assessment proceedings, the Assessing Officer repeatedly called upon the assessee to furnish details of purchases, including bills, vouchers, confirmations from suppliers, and supporting evidence of payments. However, the assessee failed to furnish such details. Notices issued under section 133(6) to various suppliers also remained uncomplied with, leading to doubt regarding their existence and genuineness.
Further, significant discrepancies were noted between the figures reported in the ITR and audited financial statements, including differences in capital, fixed assets, sundry creditors and loans. The assessee explained these as clerical errors, which was not accepted. The assessee also failed to maintain stock register or quantitative details of inventory, and even the tax auditor reported inability to verify stock valuation.
