Turnover-based estimation for demonetization cash deposits applied uniformly, rejecting separate unexplained-money addition and section 115BBE treatment.
Cash deposits made during demonetization in the same business bank account were treated consistently with other credits already accepted as turnover, so a separate unexplained-money addition for one tranche of deposits was not justified. The tribunal applied the same turnover-based estimation method to the disputed deposits, directing that only 8% profit be estimated and taxed at the normal rate; the separate addition under section 69A and use of section 115BBE were not sustained in the manner adopted by the Assessing Officer.
Issues: Whether cash deposits of Rs. 21,00,000 made during demonetization, and found in the same bank account treated as business receipts, were required to be included in the assessee's turnover and subjected only to estimated profit at 8% instead of separate addition and tax under section 115BBE.
Analysis: The deposits in question were in the same bank account from which the Assessing Officer had already treated other credit entries as business turnover and estimated profit at 8%. The differential treatment given only because the amount was deposited in different months during demonetization was not found justified. Once the deposits were accepted as part of the business account and turnover, the same method of estimation had to apply to the additional cash deposits as well.
Conclusion: The cash deposit of Rs. 21,00,000 was directed to be treated as part of business turnover, with only 8% profit to be estimated thereon and taxed at the normal rate; the addition under section 69A and the application of section 115BBE were not sustained in the manner adopted by the Assessing Officer.
Final Conclusion: The assessee obtained partial relief, as the disputed cash deposit was brought within the turnover-based estimation method and the assessment was directed to be modified accordingly.
Ratio Decidendi: Where cash deposits in the same business bank account are treated as turnover, a separate unexplained-money addition for one tranche of such deposits is unwarranted and the same profit-estimation method must apply uniformly.
TaxTMI 
AI Drafter ✕
TaxTMI 
