2016 (1) TMI 72

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 29.10.2013 in Appeal No.57/12-13 passed under section 271(1)(c) r.w.s. 250 of the Income Tax Act,1961 for the assessment year 2009- 10. Since the quantum appeal and the penalty appeal are interlinked, they are disposed of by this common order for the sake of convenience. 2. The Revenue has raised eight elaborate grounds in its quantum appeal and four grounds it its penalty appeal, however the cruxes of the issues are concised herein below for adjudication:- Quantum appeal:- i) The Ld. CIT(A) has erred in directing the Ld. Assessing Officer to treat the income of Rs. 20 lakhs resulting from cash deposits as assessee's business turnover and balance Rs. 25,57,709/- as income from other sources. ii) The Ld. CIT(A) has e....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... perusing the statement of account for the assessment year 2008-09, it was revealed that the profit from waste cotton business was Rs. 1,69,000/- and the assessee's case was covered U/s.44AF of the Act since the annual turnover of the assessee was less than Rs. 40/- lakhs. It was further noticed that for the assessment years 2007-08 & 2009-10, the income from the same business was Rs. 50,000/- & Rs. 1,25,380/- respectively. Since there was a huge deposit during the period 01.04.2008 to 31.03.2009 amounting to Rs. 45,57,709/-, the Ld. Assessing Officer opined that the entire cash deposits could not have resulted from the waste cotton business because the assessee had declared far lesser turnover during the other assessment years and therefor....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....000) which is totally illogical because such profit cannot be derived from cotton waste business. Therefore, we hereby confirm the order of the Ld. CIT (A) on this issue. 5.1. Ground No.(ii) - granting 80% depricition on WDV method instead of 7.69% on straight line method in accordance with Section- 32(1) Explanation-2 read with Rules 5 (1A). The assessee had invested in windmill during the relevant previous year amount to Rs. 1.08 crores. Since the assessee had not exercised its option before the Ld. Assessing Officer for granting deprecation @80% the Ld. Assessing Officer allowed the depreciation at 7.69% on straight line method as stipulated in Explanation-2 of Section-32(1) of the Act. On appeal, the Ld. CIT (A) directed the Ld. Asse....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... worthiness of the assessee's father for having advanced Rs. 10/- lakhs loan to the assessee because he was a retired employee of a Cement factory during the year 2000 and did not have any source of income. Further the cash deposit of Rs. 35,57,709/- could not be convincingly explained by the assessee as sale proceeds from the waste cotton business of the assessee. On appeal, the Ld. CIT (A) confirmed the order levying penalty for the addition of Rs. 10 lakhs, however deleted the penalty with respect to cash deposits from waste cotton business by observing as under:- "The next issue is regarding cash deposits made in the Bank account of the Appellant. The appellant submitted that these cash deposits were made out of the waste cotto....