Assessee's Appeal Dismissed for Lack of Evidence on Cash Deposits & MCX Income Addition

The appeal filed by the assessee was dismissed by the court. The objections raised regarding the validity of reopening of assessment and addition on account of cash deposits in the bank account were deemed lacking in merit due to the assessee's failure to provide substantial evidence or dispute the findings. The CIT(A)'s decision to restrict the addition on income from transactions on MCX to 1% was upheld, resulting in the dismissal of the appeal.

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Issues:
Validity of reopening of assessment
Addition made on account of cash deposit in bank account
Estimation of income from transactions on 'Multi Commodity Exchange' (MCX)

Validity of Reopening of Assessment:
The assessee raised objections against the reopening of assessment under section 147, citing lack of validity in the initiation and conduct of proceedings. However, the Assessing Officer stated that the notice issued under section 148 of the Income Tax Act was duly received by the assessee. The assessee did not dispute the receipt of the notice. The objection raised by the assessee lacked substance as it did not specify any invalidity in the reopening process. Therefore, the objection was dismissed for lacking merit.

Addition on Account of Cash Deposit in Bank Account:
The Assessing Officer made an addition of Rs. 42,29,985 on account of unexplained cash deposits in the bank account of the assessee. The assessee did not participate in the assessment proceedings, and the assessment was completed ex parte. The Assessing Officer issued multiple notices under section 142(1) for information, which the assessee did not comply with. Subsequently, information was obtained from M/s. Karvy Commtrade Ltd. regarding the transactions on MCX. The bank account statement from HDFC Bank revealed the cash deposits made by the assessee. The assessee did not provide any explanation for the source of these deposits. As a result, the addition made by the Assessing Officer was deemed appropriate, and the objection was dismissed for lack of explanation or dispute from the assessee.

Estimation of Income from Transactions on MCX:
The CIT(A) restricted the addition on account of income from transactions on MCX by applying a profit rate of 1%, contrary to the 8% applied by the Assessing Officer. The addition was sustained to the extent of Rs. 19,667 as opposed to the Rs. 1,57,335 estimated by the Assessing Officer. The assessee failed to provide any details or records to challenge the transactions on MCX. The CIT(A)'s estimation of income at 1% was considered fair and appropriate. Consequently, there was no reason found to interfere with the CIT(A)'s order on this issue.

In conclusion, the appeal filed by the assessee was dismissed, and the judgment was pronounced on 15/07/2021 at Allahabad through Video Conferencing.

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