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2018 (2) TMI 1577 - AT - Income TaxAddition towards unexplained cash deposit in bank - estimation of net profit rate - Held that:- Perusal of the credit entries in the bank account of Shri Kailalsh Singh reveals that regular account payee cheques have been credited in the bank account of Shri Kailalsh Singh which are on account of contract /business receipts for road construction. This proves that the cash withdrawal by the assessee is out of the business receipts of Shri Kailalsh Singh. These business receipts of Shri Kailalsh Singh shown in the bank statement are 4 taxable only to the extent of profit earned from the road construction business - we assume that the alleged cash deposits made by the assessee are also the part of business/ contract receipts. Certainly when the business receipts are towards road construction business only the profit element can be subject to tax. Thus when both the parties are unable to prove their stand in full, deem it proper to estimate net profit rate @8% on the alleged cash deposit/business receipt of ₹ 89,35,000/- in order to meet the ends of justice. We accordingly do so and confirm the addition at ₹ 7,14,800/- as against the addition of ₹ 89,35,000/- made by the Assessing Officer. - Decided partly in favour of assessee.
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