2026 (7) TMI 960

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....and retail trading of live chickens. The assessee's case was selected for scrutiny under CASS to examine the issue of large cash deposits during demonetization period and abnormal increase in sales with a decrease in profitability as compared to preceding years. Notice u/s. 143(2) and 142(1) were issued. The assessee filed his response to the notice issued u/s. 142(1) and also filed copy of the bank statements and other documents to show that the deposits are from the sale of livestock. The AO considered the said submissions as well as the documents and accepted that the assessee had sufficient cash balance to deposit the same during the demonetization period. Thereafter the AO had considered the gross profit and net profit earned by the as....

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....onetization period and also satisfied himself about the books of accounts maintained by the assessee. Later on, the AO had taken the gross profit as an yardstick and estimated the income based on the comparison of the gross profit earned during the first year of business, which is not correct. The Ld.AR also submitted that the AO had compared the gross profit of earlier A.Y. 2016-17 and not considered the higher gross profit earned during the A.Y. 2018-19. Further, the Ld.AR submitted that when there is no defects in the maintenance of books of accounts and the books were also audited, without any other material defects, the addition made by the AO is an arbitrary one and liable to be set aside. The Ld.AR also filed a written submissions an....