TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 786
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.... and on facts in confirming an addition of Rs. 5,26,869/- estimating the investment as peak deposit. The appellant having the only source of income as retail trade, addition of Rs. 5,26,869/- is patently wrong and unjustified. The addition of Rs. 5,26,869/- be deleted. 3. In the Revenue's appeal, the Revenue has raised the following grounds of appeal:- The ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 33,72,883/- on account of payment made of credit card expenses u/s 69C of the I.T. Act. 4. The Assessing Officer made the addition by observing as under:- "4. As per the AIR information, the assessee has made payment of Rs. 41,99,552/- for credit card expenses during the year. The assessee was requested to explain the source of payment vide this office letter dtd. 1/11/2010 and 04/11/2010. In response to this, the assessee filed unsigned reply dtd. 03/11/2010 through post and submitted that he has made payment of Rs. 41,99,552/- by way of credit card for himself and on behalf of his wife for purchase of provisional goods for doing retail trading business. Out of the above, purchases of Rs. 28,78,800/- is for himself and Rs. 13,20,752/- for his wife. He a....
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.... this statement also the appellant has unambiguously stated that he is doing retail trading. In fact in response to question no.2 of this statement, the appellant has stated that he is engaged in retail trading. In response to question No.3 the appellant had stated that he is doing retail trading in pulses, rice, kariana etc. The appellant has also furnished copies of sales account and purchase account. The A.O. has failed to controvert these evidences. In view of these evidences I am of the considered view that the appellant was engaged in retail trading. 2.4 The appellant during the assessment proceedings submitted that he had made purchase of Rs. 28,78,800/- for his retail business and purchase of Rs. 13,20,752/- was made for the retail business of his wife. The income earned on these purchases has been declared at the rate of 5% in the hands of the appellant as well as in the hands of his wife. These purchases were made on the credit card (issued by ICICI Bank) of the appellant. It is also seen that during the remand report proceedings the A.O. made necessary enquiries and detected another five credit cards. The total payments against all the six credit cards during the year u....
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....ve facts clearly indicate that the appellant has made peak investment of Rs. 5,26,869/- in his bank accounts. The appellant has failed to file any cogent evidence to prove the source of these/ deposits. Accordingly, addition to the extent of Rs. 5,26,869/- is also confirmed. 2.7 As a result, addition to the extent of Rs. 8,26,669/- (Rs.2,99,800 + Rs. 5,26,869) is confirmed. The appellant will get a relief of Rs. 33,72,883/- (Rs.41,99,552 - Rs. 8,26,669)." 6. The Authorized Representative of the assessee contended before us that the assessee's credit card was used by his wife for making purchases of goods which were sold by her. The profits were computed u/s 44AF of the Act and accordingly return of income was filed. Copy of the same is placed at page No.7 of the paper-book. He submitted that he also filed return of income u/s 44AF of the Act showing the profit from the purchases made through credit card both in his case and his wife and filed the return of income accordingly. It was his submission that, as the assessee had trading business for which payments were made through credit card, therefore, no disallowance u/s 69C could be made. 7. On the other hand, the Departmental Re....
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....ash Book produced before him that the peak deposit was Rs. 5,26,869/- on 19.11.2007. In absence of any cogent explanation about the source of investment of Rs. 5,26,869/- he confirmed addition to the extent of Rs. 5,26,869/- also. Thus, the CIT(A) confirmed addition to the extent of Rs. 8,26,669/- out of Rs. 41,99,552/- and deleted the balance addition of Rs. 33,72,883/-. 11. Being aggrieved by the above order of the CIT(A), both the parties are in appeal before us. 12. The Authorized Representative of the assessee contended before us that the CIT(A) was not justified in estimating assessee's turnover at Rs. 90,00,000/- when the total payment made was found at Rs. 84,18,580/-. We find that it is not in dispute that payment of Rs. 84,18,580/- was made for purchase of trading goods. The Authorized Representative of the assessee could not bring any material before us to show that any trading goods so purchased remained unsold at the end of the relevant year. The assessee's turnover also includes the business expenditure and profit of the assessee, besides the purchases. The assessee was not able to bring any material before us to show the amount of its other business expenses and th....