2018 (5) TMI 1484 - AT - Income Tax

Deposits in the bank accounts by both cheques and cash - unexplained cash income U/s 68 - cheque deposits were accepted as business turnover u/s 44AD - none appeared on behalf of assessee - appeal by the CIT(A) was also determined ex-parte - Held that - there is no reason why the cash deposits should be assessed u/s 68 when cheque deposits were accepted as business turnover - assessee has not co-operated in the proceedings - order of CIT(A) is confirmed - appeal of revenue is dismissed - decided against the assessee.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Treatment of bank deposits as business turnover or unexplained income.
3. Assessment of income based on bank deposits.
4. Non-appearance of the assessee during proceedings.
5. Confirmation of the CIT(A) order by the ITAT.

Condonation of Delay:
The appeal by Revenue was filed with a delay of four days, attributed to the charge being held as additional charge and a delay in obtaining authorization from the CIT. The delay was condoned based on the affidavit filed by the AO, and the appeal memo was admitted.

Treatment of Bank Deposits:
The AO initially treated the cash deposits in the bank accounts as unexplained income under Section 68 of the Income Tax Act, while accepting cheque deposits as business turnover. However, the CIT(A) considered all deposits, including cash, as turnover, leading to a revised income calculation.

Assessment of Income:
The appellant, deriving income from transport contracts, declared total income of &8377; 3,32,420. During scrutiny assessments, it was found that there were significant deposits in the bank accounts, leading to different treatments by the AO and the CIT(A) regarding the nature of these deposits and their impact on income estimation.

Non-Appearance of Assessee:
Despite several opportunities, the appellant did not appear during the proceedings, resulting in decisions being made based on available facts and merits. The appellant's claim that all receipts were business-related and constituted income was considered in the absence of cooperation.

Confirmation of CIT(A) Order:
The ITAT upheld the CIT(A) order, reasoning that cash deposits should be treated similarly to cheque deposits as turnover. The ITAT found the CIT(A)'s decision reasonable given the circumstances and the appellant's lack of cooperation. The income was estimated at 10% due to the appellant's transport business involvement, leading to the dismissal of the Revenue's appeal.

In conclusion, the ITAT dismissed the Revenue's appeal, emphasizing that the order should not hinder the determination of total turnover and income rate if the appellant preferred any undisclosed appeal. The decision was pronounced on May 18, 2018.