Mintu Mallick Vs ITO (ITAT Kolkata)
Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has remanded a case back to the Assessing Officer (AO) for fresh adjudication, directing the officer to re-calculate the assessee’s income based on the correct turnover figure available in the Profit & Loss (P&L) account rather than treating a discrepancy as unexplained money.
The case involves Mintu Mallick, a building materials trader, who faced reassessment proceedings under Section 147 of the Income Tax Act, 1961, after depositing significant cash in his bank account during the demonetisation period. In his return, Mallick declared income under the presumptive taxation scheme (Section 44AD) based on a turnover of ₹53,89,300. However, the AO noted that the assessee’s P&L account showed a higher turnover of ₹79,86,622.
Consequently, the AO added the differential amount of ₹25,97,322 to Mallick’s income. The order was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)] after the assessee failed to make any written submissions.
Appealing before the ITAT, the assessee’s counsel argued that the discrepancy was a bona fide error by the tax consultant and the correct turnover figure was already on record with the AO. The tribunal found merit in this argument. It observed that since the correct turnover was available to the AO, the differential amount should not have been treated as undisclosed income. The ITAT ruled that the AO could have assessed the income on a presumptive basis using the enhanced turnover figure.
