TaxTMI 
TaxTMI 
2026 (7) TMI 947
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted 26.12.2019 passed u/s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] by the Income Tax Officer, Ward 1, Thanjavur [hereinafter referred to as "the AO"] pertaining to the Assessment Year 2017-18. 2. At the outset, it is observed that the present appeal has been filed with a delay of 322 days. The assessee has moved a petition seeking condonation of the delay, duly supported by an affidavit explaining the reasons for the belated filing of the appeal. Upon perusal of the condonation petition and the affidavit filed in support thereof, and having regard to the facts and circumstances of the case, we are satisfied that the assessee was prevented by sufficient cause from presenting the appeal within the prescrib....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs, the AO noticed that the assessee had deposited cash aggregating to Rs. 27,07,500/- in its bank account maintained with Indian Bank, Pattukkottai. In order to verify the nature and source of such deposits, the AO issued a notice u/s. 133(6) of the Act to the concerned bank. On the basis of the information received, it was found that out of the total cash deposits of Rs. 27,07,500/-, a sum of Rs. 22,51,000/-represented deposits made in specified bank notes during the demonetization period. 5. The AO, therefore, called upon the assessee to explain the source of the aforesaid cash deposits. However, according to the AO, the assessee failed to furnish any documentary evidence in support of the source of the cash deposited in the bank acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment was completed u/s. 143(3) of the Act vide order dated 26.12.2019 determining the total income of the assessee at Rs. 18,55,890/-, after making the following additions: (i) Rs. 13,13,000/- u/s. 69A of the Act on account of cash deposits made during the demonetization period, treated as unexplained money; and (ii) Rs. 5,42,890/- being the estimated business income. 10. Aggrieved by the assessment order and the additions so made, the assessee preferred an appeal before the Ld.CIT(A). 11. The Ld.CIT(A), vide the impugned appellate order dated 30.01.2025, sustained the addition of Rs. 13,13,000/- made by the AO by treating the cash deposits made during the demonetisation period as unexplained money u/s. 69A of the Act. Further, ins....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t once a particular sum has been disclosed and assessed as business revenue, the same amount cannot simultaneously be subjected to tax as unexplained money under the provisions of section 69A of the Act, as such an approach would result in impermissible double taxation of the very same income. 15. The Ld. AR further submitted that both the lower authorities failed to grant due credit for the income of Rs. 97,940/- already returned by the assessee in the return of income. According to the Ld.AR, while making and sustaining the impugned addition, the authorities below had overlooked the fact that the returned income had already been offered to tax, thereby resulting in an inflated assessment of the taxable income. 16. In view of the afo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ness income on an estimated basis. It is a settled proposition of law that where the correctness and completeness of accounts cannot be verified due to non-production of books and records, the AO is empowered to estimate the profits of the business on a reasonable basis having regard to the facts and circumstances of the case. 20. In the present case, the AO adopted a net profit rate of 2% on the turnover disclosed by the assessee at Rs. 2,71,44,530/-, resulting in an estimated business income of Rs. 5,42,890/-. On careful consideration of the nature of business carried on by the assessee, namely trading in hardware goods, and keeping in view the fact that no reliable books of account were produced either before the AO or before the firs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n period represented deposits of specified bank notes which, according to him, could not have been accepted by the assessee in the ordinary course of business after 08.11.2016. However, a careful reading of the findings recorded by the Ld.CIT(A) reveals that the impugned amount of Rs. 13,13,000/- was considered by the first appellate authority as forming part of the turnover disclosed by the assessee. In fact, while sustaining the addition u/s. 69A of the Act, the Ld.CIT(A) simultaneously excluded the very same amount from the disclosed turnover for the purpose of estimating business income, thereby implicitly acknowledging that the deposits were linked with the business receipts of the assessee. 23. Once it is accepted that the impugned....