TaxTMI 
TaxTMI 
2023 (7) TMI 1009
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....passed U/s. 143(3) vide Order No. ITBA/AST/S/143(3)2019-201022913442(1), dated 23/12/2019 of the Income Tax Act, 1961 [the Act] for the AY 2017-18. 2. Briefly stated the facts are that the assessee filed its return of income for the AY 2017-18 on13/11/2017 declaring an income of Rs. 5,97,530/-. Subsequently, the case was selected for scrutiny under CASS and notices U/s. 143(2) and 142(1) of the Act were issued and served on the assessee from time to time. The assessee is a wholesale and retail seller of crackers. The assessee filed return of income adopting the presumptive taxation provisions as per section 44AD of the Act. During the scrutiny assessment, the Ld. AO noticed that the assessee has deposited demonetized cash in the bank accou....
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....nt of Rs. 44,50,000/- [Rs. 64,50,000 - Rs. 20,00,000] as unexplained money as per the provisions of section 115BBE of the Act. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A)- NFAC. 4. Before the Ld. CIT(A)-NFAC, the assessee's representative submitted that the Ld. AO has erred in taking an amount of Rs. 64,50,000/- as cash deposits whereas the actual cash deposits is Rs. 53,50,000/- only. The Ld. CIT(A)-NFAC considering the various submissions made by the Ld. AR based on the declared turnover by the assessee while filing the return of income, partly allowed the appeal of the assessee and directed the Ld. AO to make an addition of Rs. 19,35,996/- as unexplained. Aggrieved by the order of the Ld. CIT....
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....unt and hence the entire sales are deposited into the single bank account which is with Andhra Bank. The Ld. AR further submitted that all these submissions were placed before the Ld. Revenue Authorities but it was not considered. The Ld. AR further submitted that the sale of crackers being a seasonal business the assessee earned more profits but has decided to avail the benefit of presumptive taxation U/s. 44AD of the Act. The Ld. AR therefore pleaded for considering the additional profit earned by the assessee. There is sufficient cash balance with the assessee and hence the addition made U/s. 115BBE by the Ld. Revenue Authorities should be deleted. Per contra, the Ld. DR fully supported the orders of the Ld. Revenue Authorities. 7. We ....
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....e the cash balance as per the turnover declared by the assessee while filing ITR, and hence arrived at the cash balance at Rs. 34,14,004/-. The Ld CIT(A)-NFAC has also estimated cash expenses at Rs 4,00,000/- net of cash withdrawals and has computed unexplained cash of Rs 19,35,996/-.Meanwhile the assessee claims that he has made purchases for Rs 1,06,95,659/- and has a closing stock on hand is Rs.26,01,000/- as at 31st March 2017. This fact was never disputed by the Revenue. From the written submissions made before Revenue, which is also placed before us, we find that the assessee has computed the cost of goods sold at Rs. 80,94,659/- (Rs.1,06,95,659 - Rs.26,01,000). If the estimated profit is included to the above cost of goods sold the g....