Lakshmi Durga Distributors Vs ITO (ITAT Visakhapatnam)
ITAT Visakhapatnam reviewed an appeal filed by Sri Lakshmi Durga Distributors, challenging the order of the CIT(A) on the assessment for the AY 2017-18. The Assessing Officer (AO) had estimated the income of the assessee at 8% of the total turnover of Rs. 1,38,10,152 based on VAT returns and added Rs. 9,47,000 as unexplained income due to cash deposits. The CIT(A) upheld these additions despite the assessee’s failure to respond to notices. The ITAT found that the AO had mistakenly included cash deposits in the turnover while estimating income, which led to an overstatement of income. The tribunal also noted the absence of any concrete basis for applying the 8% estimation rate and reduced it to 4%, aligning it with industry standards. Consequently, the ITAT directed the AO to delete the extra sum and apply a 4% income estimation, partially allowing the appeal.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
Aggrieved by the order dated 28/08/2023 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (“learned CIT(A)”), in the case of Sri Lakshmi Durga Distributors (“the assessee”) for the assessment year 2017-18, the assessee preferred this appeal.
