TaxTMI 
TaxTMI 
2014 (11) TMI 406
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....n available on record, AO noticed that assessee has made cash deposits into his bank accounts amounting to Rs. 33,72,365. In absence of any explanation furnished by assessee, AO treated such cash deposits as unexplained cash credits and added it to income of assessee for the impugned assessment year. As a result, total income was determined at Rs. 35,52,365. Being aggrieved of such addition, assessee challenged the same in appeal before the CIT(A). 3. In course of hearing of appeal before the CIT(A), assessee submitted that assessee could not represent before AO as he did not receive any such notices issued by AO due to change of address. While explaining the source of cash deposits into the bank account assessee brought it to the notice of CIT(A) that though AO has examined one bank account, but, actually assessee is having three bank accounts. In this connection, assessee submitted that apart from the ICICI bank account considered by AO in the assessment order passed, assessee is also having savings bank account bearing No. 30174833939 with SBI, Old Malakpet Branch, wherein cash deposits made during the year is to the tune of Rs. 1,06,61,370. So far as the third account in ICI....
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....how that his margin of profit is less than 1% or assessee only received commission of Rs. 500 to Rs. 1000 per truck as a facilitator, assessee's submissions for estimating profit at 1% also cannot be accepted. CIT(A) observed that in this line of business profit generally is not less than 10% and considering the lack of information furnished by assessee and incorrect information furnished by assessee, he concluded that net profit rate of 15% on the gross receipts of Rs. 1,40,33,735 would be reasonable. Accordingly, he worked out the profit at Rs. 21,05,060 and directed AO to confine addition to that extent. The findings of the learned CIT(A) are extracted below for the sake of clarity: 6.5 As per the information brought on record, the appellant prays that his margin of profit is less than 1 % on such turnover based on the calculation that he receives a commission of Rs. 500/- to 1000/- per truck with the turnover of 75 to 200 trucks carried during a year. This argument is neither supported by a document nor the practices in the similar trade or activities. Further, the bank accounts of the appellant reveal that the peak credits itself is more than the amounts what is claimed as ....
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....allowances made by the AO u/s 80C of the IT Act. 4. The learned CIT(A) erred in confirming the addition of Rs. 21,05,060 as against the addition of Rs. 33,72,365." 7. Mostly reiterating the submissions made before the first appellate authority, learned AR submitted that assessee only acts as facilitator on behalf of buyers and sellers in fruit market and earns commission. Therefore, estimation of profit at 15% is on a very high side as actual profit earned by assessee would be 1%. Though, learned AR made an attempt to justify his claim that cash deposits in the bank accounts are actually not his income, but, money given by purchasers of fruits, but, ultimately, he confined his argument to the adoption of net profit rate at 15% by learned CIT(A). 8. The learned DR, on the other hand, submitted that assessee neither at the stage of assessment nor before the CIT(A) has explained the source of cash deposits made into the bank accounts. He submitted that at the assessment stage, assessee even did not bring to the notice of AO or filed any information that apart from the cash deposits made in to ICICI bank account, he has also made cash deposits in the accounts maintained with S....
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....rnished certain informations with regard to deposits in the bank accounts and also has brought to the notice of CIT(A) that apart from the bank account considered by AO, assessee also maintains few more bank accounts. On examination of the said accounts, it was found that total cash deposits made by assessee in his bank accounts during the year amounted to Rs. 1,40,33,735. Admittedly, assessee has not maintained any books of account, bills and vouchers, etc. in respect of the business carried on by him. It is further evident from the statement of income submitted by assessee along with the return of income and a copy of which is at page 2 of the paper book, assessee himself has stated that he is engaged in wholesale fruit business. Therefore, assessee's claim that he is only acting as a facilitator between purchasers and sellers of fruits in fruit markets is not acceptable in absence of any supporting evidence. Further, assessee's claim that cash deposits made in the bank accounts represent monies given by buyers and does not belong to him and further fact that he is only earning commission is also not acceptable in absence of any corroborative evidence. In the aforesaid view of th....