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2020 (1) TMI 963 - AT - Income TaxUnexplained cash deposits - CIT-A estimated the income @4% on total turnover - Estimation of income - turnover of the assessee in purchase and sale of digital dollars - HELD THAT:- There is no provision in the Income Tax Act to tax the unutilized balance received from the customers. If the assessee fails to provide the digital dollars, it would remain as liability and the assessee is obliged to return the money to the depositor. Therefore, the same cannot be treated as income of the assessee. AO also did not invoke any provision of the Act to tax the difference amount. During the course of survey conducted in the case of 133A also, no evidence was found by the AO to hold that the assessee has acquired the assets equivalent to the difference amount taxed by the AO as observed by the Ld.CIT(A). Therefore, we hold that the amount of ₹ 1,87,45,260/- is turnover of the assessee for purchase and sale of digital dollars and income is to be estimated on the turnover. Accordingly, we hold that ₹ 1,87,45,360/- represent the turnover of the assessee in purchase and sale of digital dollars. Addition relating to the deposits made in various accounts - we observe that there were sufficient amount of cash withdrawals from the bank accounts for making deposits in different persons. Therefore, we do not see any reason to suspect the source of deposit when there were sufficient withdrawals in the bank account. Accordingly, we hold that having accepted by the AO that the assessee had purchased the dollars from different persons to the extent of ₹ 46,37,000/- out of total deposits of ₹ 1,87,45,260/-, there is no reason to suspect the source of deposits made in the different persons of the bank accounts. Hence, we uphold the order of the Ld.CIT(A). CIT(A) has estimated the turnover at ₹ 2,50,00,000/- and estimated the income @4%. The assessee in his statement recorded u/s 133A as well as in the return of income admitted the income @2%. The Ld.CIT(A) has not given any basis for estimating the turnover at ₹ 2,50,00,000/- when the turnover works out to sum of ₹ 2,32,82,260/-. Out of 2,33,82,260/-, A sum of ₹ 15,00,000/- was given as loan to Sri Andhavarapu Srinivasa Rao as discussed in page No.17 of the assessment order. Total turnover of the assessee works out to ₹ 2,33,82,260/- but not ₹ 2,50,00,000/- as held by the Ld.CIT(A). Accordingly, we set aside the order of the Ld.CIT(A) and direct the AO to estimate the income at 2% on total turnover of ₹ 2,33,82,260/- and dismiss the appeal of the revenue.
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