Assessment was completed without examination of books of account but also without rejection of books: ITAT remands back the matter




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Assessment was completed without examination of books of account but also without rejection of books: ITAT remands back the matter

Dinesh Saha Vs ITO (ITAT Kolkata) Appeal Number : ITA No. 1142/Kol/2024

Observation of AO during assessment proceedings:

1.  The assessee failed to produce complete books of accounts and relevant vouchers during the assessment proceedings.

2.  The assessee’s non-compliance in producing necessary documents left the AO with no choice but to make additions, without rejecting the books of accounts.

The AO made the following additions to income:

1.  Addition due to Enhancement of Profit:

Rs. 5,47,443 added on an estimated basis.

2.  Addition due to Unverified Sundry Creditors:

Rs. 30,01,129 added under Section 68 of the Income Tax Act, treating them as unexplained cash credits.

3.  Addition due to Cash Deposits During Demonetization:

Rs. 56,45,000 added under Section 69A, considering the cash deposits during the demonetization period as unexplained.

ITAT Kolkata held as below:

1.  Once the turnover of business has not been disturbed and some addition has been made by adopting a higher figure of net profit on estimate then there may not be any occasion to make any further addition on account of trade creditors or even cash deposited during the demonetization period.

2.  AO should examine the books of accounts to see if the trade creditors have been duly accounted for in the turnover of business and also the cash deposited during the demonetization period could be correlated with the cash book maintained by the assessee.

3.  For these reasons, this matter is remanded back to the file of AO for affording a fresh opportunity to the assessee, who would do well to present the books of accounts etc.

The Copy of the order is as under:

1732009127-6ZwAh8-1-TO




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