ITO Vs Shri Hemantha Raju (ITAT Bangalore)
In the case of ITO vs. Shri Hemantha Raju, the appeal was filed by the revenue and a Cross Objection was filed by the assessee against the order dated 05.10.2023 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC] for the Assessment Year (AY) 2017-18.
The assessee explained a delay of 88 days in filing the Cross Objection, attributing it to being unaware of notices issued through electronic mode until the First Appellate Authority (FAA) passed its order. The explanation was accepted, and the delay was condoned.
The case pertained to the assessment of the assessee, who had filed a revised return declaring total income. The Assessing Officer (AO) initiated scrutiny regarding high-value cash receipts from third parties and cash deposits during the demonetization period. The AO noted significant cash deposits in the assessee’s bank accounts and, as the assessee failed to respond to notices, completed the assessment under section 144, making substantial additions to the income.
The assessee appealed to the CIT(Appeals), which was later migrated to NFAC. However, the assessee did not respond to the notices issued during the appeal proceedings, resulting in an ex parte decision by the CIT(Appeals). The CIT(Appeals) partly allowed the appeal, estimating the net profit at 10% of total cash deposits, considering them as turnover of the assessee’s business.
