Amount Declared As Turnover Can’t Be Concealed Income: ITAT

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) has held that once the amount is declared as turn-over, it cannot be called concealed income and be taxed twice on the same amount.

The bench of Anikesh Banerjee (a judicial member) has observed that the AO has no right to calculate sales on a hypothetical basis, ignoring the evidence submitted during the course of assessment proceedings in the form of VAT returns, purchase bills, and quantitative details.

The appellant/assessee deposited cash in a bank account amounting to Rs. 4,09,50,000 during demonetization. The assessee is the proprietor of M/s Radhika Sales Corporation, Dhab Wasti Ram, Amritsar, and is engaged in the business of wholesale and retail sales of sugar, refined oil, ghee, and other allied karyana items.

The AO completed the assessment under Section 143(3), making an addition of Rs 2,74,000,00 out of the total cash deposited during the demonetization period of Rs 4,09,50,000. The addition was made by the AO, alleging that the appellant had inflated the sales to cover unaccounted money and assessed the total income at Rs. 2,82,17,200. As per the assessee, the amount deposited in the bank on account of his turnover was declared in the P&L account during the filing of the return. So, it will amount to double taxation.

The addition was made by the AO, alleging that the appellant had inflated the sales to cover unaccounted money.

The assessee contended that the assessee has duly submitted books of accounts, a sale and purchase register, confirmations, bank statements, expenses, and lists of parties from whom purchases were made and to whom sales were made.

The tribunal held that once adequate evidence or material has been provided, which prima facie discharges the burden of the assessee in that case, the burden shifts to the department, and the department has not discharged its onus in these circumstances.

Case Title: Raj Kumar Versus ITO

Case No.: I.T.A. No.195/Asr/2022

Date: 11.04.2023

Counsel For Appellant: Rohit Kapoor

Counsel For Respondent: S. R. Kaushik

Click Here To Read The Order