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2022 (4) TMI 1382 - AT - Income TaxUnexplained cash credit u/s 68 - Addition by CIT- A in view of the provisions of section 251(2) - cash and cheque deposit in the bank account of the assessee on the ground that the assessee could not substantiate the source of such deposit - CIT-A sustained addition - - HELD THAT:- CIT(A) shall not enhance the assessment without giving a reasonable opportunity to the assessee to show-cause against such enhancement, which is a mandatory requirement. However, the Ld. CIT(A) in the instant case has not followed the mandatory requirement of law. Therefore, we find merit in the argument of the ld. counsel for the assessee that the addition as deposited through various cheques, which was accepted by the AO as no addition has been made on this issue has to be deleted. We accordingly direct the AO to delete the addition sustained by the ld. CIT(A). Unexplained cash deposit in the bank account - We do not find merit in the arguments of the ld. Counsel for the assessee that no addition should be made on this account. However, at the same time, the entire addition of the cash deposit in the bank account cannot be made in the instant case especially when the purchases have been made through banking channel and sales have been made in cash and at the end of the year all the shares purchased have been sold leaving no balance. The assessee in the instant case in our opinion has typically acted as broker/mediator/commission agent. The various Coordinate Benches of the Tribunal under such type of bogus purchases/sales are estimating the profit ranging from 0.25% to 3% of the purchases/sales as the case may be. Considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion that adoption of profit @ 2.5% of the total cash deposit of ₹ 1,84,45,000/- in the instant case as against entire addition of ₹ 1,84,45,000/- will meet the ends of justice. We hold and direct accordingly. The order of the Ld. CIT(A) is accordingly modified and the grounds raised by the assessee are partly allowed.
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