IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA ‘B’ BENCH, KOLKATA [Virtual Court Hearing]

Before Shri P.M. Jagtap, Vice-President & Shri A.T. Varkey, Judicial Member I.T.A. No. 2605/KOL/2019 Assessment Year: 2014-2015 Sukumar Mondal,........................................................................Appellant Gobindapur, Vill. & P.O. Gobindapur, Howrah-711314 [PAN: AEUPM4095D]

-Vs.-

Income Tax Officer,.....................................................................Respondent Ward-47(4), Kolkata, 3, Government Place (West), Kolkata-700001 Appearances by:

Shri S.M. Surana, Advocate, for the Appellant Shri Supriya Pal, Addl. CIT, Sr. D.R., for the Respondent Date of concluding the hearing : July 14, 2020 Date of pronouncing the order : July 22, 2020

O R D E R

Per Shri P.M. Jagtap, Vice-President:-

This appeal filed by the assessee is directed against the order of ld.

Commissioner of Income Tax (Appeals)-14, Kolkata dated 21.11.2019 and the solitary issue involved therein relates to the addition of Rs.51,63,531/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of the profit allegedly earned by the assessee on undisclosed turnover.

2. The assessee in the present case is an individual, who is engaged in the business of distribution of food and supply of Ration Goods and dealing in Lafarge and ACC Cement. The return of income for the year under consideration was filed by him on 17.09.2014 declaring total income of Rs.5,54,330/-. The said return was selected for limited scrutiny on the ground that the cash deposits found to be made in the Savings Bank Accounts of the assessee were more than the turnover. During the course of assessment proceedings, the Assessing Officer found that the assessee has maintained three Bank accounts namely Account No. 10380100001206 with Paschim Banga Gramin Bank, Account No. 08160510000298 with UCO Bank, Shyampur and Account No. 11245243909 with State Bank of India. He also found that out of the said three Bank accounts, the balance of only one Bank account with State Bank of India was reflected in the audited balance-sheet filed by the assessee, whereas the balances of the remaining two Bank accounts maintained with Paschim Banga Gramin Bank and UCO Bank were not reflected in the balance-sheet. He also noticed that interest charged in one account and interest credited in the other accounts had also not been reflected in the accounts of the assessee. Keeping in view these serious discrepancies in the accounts of the assessee, the Assessing Officer treated the total deposits found to be made in the two Bank accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank aggregating to Rs.5,42,38,779/- as the undisclosed turnover of the assessee’s business and applying a gross profit rate of 9.52% as reflected in the audited accounts of the assessee, he made an addition of Rs.51,63,531/- to the total income of the assessee in the assessment completed under section 143(3) of the Act vide an order dated

23.11.2016.

3. Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) and the following submissions were made on behalf of the assessee before the ld. CIT(Appeals) in support of his case that the addition of Rs.51,63,531/- made by the Assessing Officer on account of profit allegedly earned on undisclosed turnover was not sustainable:-

“The assessee hhas three bank accounts viz. (i) Paschimbanga Gramin Bank, (ii) CC Account with UCO Bank, Shyampur and (iii) State Bank of India, Uluberia. All the cash received from the ration shop is deposited in Paschimbanga Gramin Bank account and from the same, the demand drafts are prepared for payment to FCI. It is submitted that the total sales on account of this business as disclosed in my books of accounts is Rs.3,29,61,654/- whereas the total deposits in the Paschimbanga Gramin Bank account is Rs.2,91,40,029/-. Therefore, the total amount dep