TaxTMI 
TaxTMI 
2014 (12) TMI 557
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....of page 5 of the return of income. 3. That the Ld. CIT (A)-1, Agra has erred in Law and on facts by accepting another source of income in form of commission from transport because in the return of income assessee offers only source of income i.e. from transportation." 2. We have heard the ld. representatives of both the parties and perused the findings of authorities below and the material on record. 3. The facts noted in the impugned order are that in this case , the assessment order under appeal has been passed u/s.144 vide order dated 20.12.2010, determining the assessed income at Rs. 12,96,457/- as against the returned income of Rs. 1,20,000/-. During the course of assessment proceeding, the AO found that there was a cash deposit of Rs. 11,76,457/- in the bank account of the assessee maintained with ICICI Bank. The AO has mentioned in the assessment order that the assessee has shown a transportation code no.0712, but no income has been shown by him from running of trucks and any other vehicles in the return of income. With regard to the cash deposit in the bank account, the AO has tried to collect information from the assessee by sending various notices but no reply ha....
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....vidence on record to show any other source of income other than running of trucks/vehicles. Therefore, the cash deposit in the bank account is out of transport business and according to section 44AE, no books of account is required to be maintained for such business. The ld. CIT(A) considering the explanation of the assessee and going through the entries in the bank account, accepted the contention of the assessee that bank deposits are from transportation business. Therefore, substantial addition was deleted. However, its gross receipts were estimated and by applying higher profit rate, part addition was maintained. The findings of the ld. CIT(A) in para 5.5 and 5.6 of the appellate order are reproduced as under : "5.5 I have considered the argument taken by the Id. AR in this regard. The AO in the assessment order, has mentioned that the assessee (appellant) has transportation code no.0712 but in the return of income, no details were given by the assessee (appellant) about running of trucks or any other vehicle. In the appeal proceeding, the ld. AR has claimed about income of Rs. 1,20,000/- shown by the assessee as being on account of running of two tankers which was purchased....
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.....6 Considering the facts and circumstances of the case as discussed above, the correct amount of the profit of the assessee (appellant) cannot be worked out on the basis of the profit and loss account filed during the appeal proceeding. However, looking to the nature of entries of cash deposits and withdrawals, found in the bank account of the assessee (appellant) maintained with ICICI Bank, it cannot be said that the entire amount of the deposits made in this bank account is unexplained because after deposit of cash amounts, there are withdrawals and since the assessee (appellant) is in the business of transport, source of such deposits being from his transport business can also be not brushed aside. The total amount of deposit of cash in this bank account has been computed by the AO at Rs. 11,76,457/-. As against this total amount of cash deposits in the bank account, the Id. AR has shown the gross receipts of Rs. 18,40,000/- in the profit & loss account furnished during the appeal proceeding. He has also pleaded during the appeal proceeding that despite the rejection of cash book of the assessee (appellant) as not being admitted in view of rule 46A, that was produced during appe....
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..... However, since the gross receipts declared in this P & L account has been found to be a reasonable amount with which, the cash deposits made in the bank account can be explained, I have taken gross receipts of the assessee at Rs. 18,40,000/- for the purpose of estimation of his income. The average rate of earning of commission is taken at 14.28% as declared in the return of income. Therefore, I hold that the income of the assessee (appellant) should be computed @ 14.28% of Rs. 18,40,000/- which comes to Rs. 2,62,752/- and hence, income of the assessee (appellant) should be assessed at Rs. 2,62,752/- instead of Rs. 1,20,000/- shown by him and accordingly, an amount of Rs. 1,42,752/- shall be added in his income instead of Rs. 11,76,457/- added by the AO in the assessment order, therefore, the assessee (appellant) gets a relief of Rs. 10,33,705/- and accordingly ground No. 3 & 4 are partly allowed. 5. On consideration of the rival submissions, we do not find any merit in the departmental appeal. The ld. counsel for the assessee admitted that the assessee did not challenge part addition maintained by the ld. CIT(A) on account of estimation of income by applying higher profit r....