TaxTMI 
TaxTMI 
2026 (8) TMI 1256
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....dings. 4. The brief facts of the case on hand are that the assessee, a partnership firm, is engaged in the business of trading in old newspapers and magazines, which failed to file its ROI for the captioned AY. The case was reopened u/s 147 of the Act on the basis of information that the assessee had deposited cash of Rs. 12,74,500 in its bank account. 4.1 During the reassessment proceedings, the assessee did not respond to the notices issued by the AO. The AO, therefore, issued a notice u/s 133(6) of the Act to ICICI Bank and obtained the bank statement of the assessee. On examination of the bank statement, the AO observed that total credits of Rs. 19,93,60,572 and total withdrawals of Rs. 19,92,75,902 were recorded in the account. 4.2 The AO further observed from the Insight Portal that the assessee had reported sales of Rs. 11,43,00,879 in its GST returns. The AO estimated net profit from such sales at 10%, amounting to Rs. 1,14,30,088/- and treated the same as business income. 4.3 Further, the difference of Rs. 8,50,59,693 between the total bank deposits of Rs. 19,93,60,572 and the GST sales of Rs. 11,43,00,879 was treated as unexplained money u/s 69A of the Act and....
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....ness receipts from sales. It was explained that GST came into force only from 01.07.2017 and, therefore, the sales reflected in the GST data related only to nine months of the relevant financial year. The actual turnover of the assessee, including both VAT sales and GST sales, was stated to be approximately Rs. 15.81 crores. 8.3 The assessee further submitted that the assessee maintained three bank accounts with SBI, ICICI Bank and Andhra Bank. The details relating to the ICICI Bank account and the other bank accounts were stated to have been furnished before the Ld. CIT(A). Before the Tribunal, the assessee has also filed detailed summaries of the bank transactions at pages 344 to 402 of Paper Book-II to establish the nature and source of the deposits. The same is reproduced below for the sake of reference: Total of ICICI Bank Withdrawals Sl. No. Particulars Withdrawals (Rs.) 1 Archana - Capital Account 3,18,86,500.00 2 Cash 7,21,02,992.00 3 Inter Bank 20,35,199.00 4 Loan Received and repaid 8,44,550.00 5 N V Ashok - Capital 2,20,79,500.00 6 Payment towards expense 1,04,59,319.43 7 Payment towards Ven....
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....ion "sufficient cause" has to be construed liberally so as to advance substantial justice. Accordingly, the delay of 402 days in filing the appeal before the Ld. CIT(A) is condoned. 10.2 We further find that the assessment was completed without effective participation by the assessee. Before us, the assessee has filed additional evidences including details of the bank accounts, summaries of bank transactions, VAT and GST sales and the profit and loss account prepared by the assessee. These documents are relevant for deciding the issues in dispute and were not examined by the AO. We, therefore, admit the additional evidence in the interest of justice. 10.3 On merits, the AO compared the total deposits of Rs. 19,93,60,572 in the ICICI Bank account with the GST sales of Rs. 11,43,00,879 and treated the difference of Rs. 8,50,59,693 as unexplained money u/s 69A of the Act. The assessee, however, contends that GST was introduced only from 01.07.2017 and the GST turnover represented sales for only nine months. According to the assessee, its total turnover, including VAT and GST sales, was approximately Rs. 15.81 crore. It is also contended that the assessee-maintained accounts with....
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....siness income on the basis of the books, profit and loss account and supporting evidence produced by the assessee. In case estimation is necessary, the AO shall adopt a reasonable profit rate having regard to the nature of the business, past or subsequent year results, comparable cases and other relevant materials, instead of applying an arbitrary rate of 10%. 10.7 The assessee is also directed to cooperate with proceedings & furnish all the required details. The AO shall thereafter pass a reasoned order in accordance with law. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 11. In the result, the appeal of assessee is allowed for statistical purposes. Coming to ITA No. 2602/Bang/2025 and ITA No. 2603/Bang/2025 both relevant for AY 2018-19 12. At the outset, we note that since the quantum assessment for the same AY has been restored to the file of the AO for fresh adjudication, the basis for levy of penalty does not survive at this stage. Accordingly, the penalty orders are also set aside and the matters are restored to the file of the AO, who shall consider the question of levy of penalty, if warranted, after completion of the fres....