2014 (3) TMI 645

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....007-08 vide order dated 24.12.2009. 2. The appeal raises two issues. It would be relevant to recount the background facts of the case. The assessee, an individual, runs a communication centre in the name of M/s. Sonal Communication, i.e., is in the retail business of mobile phones, and also a partner in M/s. Connection and More. He returned his income for the year, disclosing a gross receipt of Rs.36.01 lacs, with a gross profit of 16%. The statement of the assessee's bank account with Bank of Baroda ('BOB' for short), however, reflected deposits to the tune of Rs.89.20 lacs, all of which, except a loan of Rs.72,000/-, were apparently receipts of his business. The assessee, when confronted therewith, filed a revised operating statement, ....

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....ore, stood rightly considered as unexplained and brought to tax u/s.69A. Aggrieved, the assessee is in second appeal. 3. The assessee before us disputes both the additions, i.e., qua the gross profit on the additional sales of Rs.53.19 lacs, estimated at 16%, as also that in respect of cash deposits in the saving bank account with OBC at Rs.16.67 lacs. The assessee's case as made out before us was primarily in terms of the telescoping effect of the two additions. 4. We have heard the parties, perused the material on record, and given our careful consideration to the matter. 4.1 The assessee in our view has no case qua its first ground, i.e., in respect of the addition to its income toward profit on the undisclosed turnover. The sam....

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....tted as cash sales, shall, subject to the confirmation as to the aggregate amount thereof, form part of the assessee's income to the extent of the profit element therein, estimated at 16%. We direct accordingly. This would, however, leave us with one addition, i.e., qua the unexplained cash deposit in the said bank account. We say so as though a part thereof represents profit, which stands separately assessed, the balance does the cost (of the goods sold), so that to the extent of the capital invested therein, the same would warrant being confirmed for addition u/s.69A, i.e., as against the total amount deposited in the account, as considered by the Revenue. Toward this, in our view, taking the operating cycle as one month, 1/12 of 84% o....