Parvati Steel Re Rolling Mills Pvt. Ltd. Vs ACIT (ITAT Pune)
ITAT Pune held that entire cash deposits into the bank account cannot be treated as income, only profit element embedded in the same should be brought to tax. Thus, addition adopting 8% profit rate confirmed. Appeal of assessee is partly allowed.
Facts- Based on the information available, re-assessment proceedings was initiated against the assessee. However, there was no compliance to the said statutory notices. Thus AO proceeded to complete the assessment on the basis of information available on record. AO treated the cash deposited to the extent of Rs.2,23,20,800/- as unexplained money u/s 69A and brought to tax the same. Similarly, AO also made addition of Rs.3,86,810/- being the interest income received on which TDS of Rs.38,681/- was made. Similarly, on the basis of TCS statement uploaded, AO brought to tax an amount of Rs.60,01,813/-.
CIT(A) upheld the same in absence of any submission before him. Being aggrieved, the present appeal is field.
Conclusion- Held that the entire deposits into the bank account in our opinion, cannot be treated as income of the assessee and only the profit element embedded in the same should be brought to tax. It was the submission of the Ld. Counsel for the assessee before the Ld. CIT(A) that a profit range of 3% to 7% should be adopted. However, no justification for adoption of such profit range has been brought on record by filing any comparables cases. Under these circumstances and considering the totality of the facts of the case and to bring the litigation to an end, we are of the considered opinion that the adoption of profit rate of 8% on the amount so deposited into the bank account totaling to Rs.2,83,22,613/- which comes to Rs.22,65,810/- will meet the ends of justice. We hold and direct accordingly. In the result, the appeal filed by the assessee is partly allowed.
