Tribunal directs deletion of addition in appeal, rules cash deposits legitimate, and orders 8% tax on profit.

The Tribunal partially allowed the appeal, directing the deletion of the addition of Rs. 8,75,500. It found the cash deposits were legitimate and ordered the profit embedded in the disputed amount to be taxed at 8% in accordance with Section 44AD of the Income Tax Act.

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Issues:
- Delay in filing the appeal due to Covid-19 pandemic
- Addition of Rs. 8,75,500 made by the Assessing Officer
- Interpretation of Section 44AD of the Income Tax Act
- Treatment of cash deposits during demonetization period
- Assessment of turnover and business income

Analysis:
1. Delay in filing the appeal: The appellant cited a delay of 34 days in filing the appeal due to the Covid-19 pandemic. The Tribunal acknowledged the reasonable cause for the delay and condoned it, admitting the appeal for consideration.

2. Addition of Rs. 8,75,500: The main grievance of the appellant was against the addition made by the Assessing Officer. The AO added Rs. 8,75,500 as unexplained money due to cash deposits during the demonetization period. The Tribunal examined the details of the deposits and the nature of the business to determine the legitimacy of the added amount.

3. Interpretation of Section 44AD: The Tribunal analyzed the provisions of Section 44AD of the Income Tax Act, which apply to businesses with turnover below Rs. 60 lakhs. The appellant's turnover was found to be around Rs. 60 lakhs, and the Tribunal considered the applicability of this section in relation to the maintenance of books of accounts.

4. Treatment of cash deposits during demonetization: The Tribunal scrutinized the cash deposits made by the appellant during the demonetization period. It considered the source of the cash, the nature of deposits, and the explanations provided by the appellant to ascertain the legitimacy of the deposited amounts.

5. Assessment of turnover and business income: The Tribunal reviewed the turnover of the appellant and the business income calculations made by the Assessing Officer. It examined the bank statements, daily transactions, and the nature of the business to determine the accuracy of the AO's additions and whether they were justified based on the evidence presented.

In conclusion, after a thorough analysis of the issues raised, the Tribunal partially allowed the appeal, directing the deletion of the addition of Rs. 8,75,500. The Tribunal found that the cash deposits were in line with the appellant's business activities and profit embedded in the disputed amount was ordered to be taxed at 8% in accordance with Section 44AD.

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