TaxTMI 
TaxTMI 
2016 (4) TMI 340
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....vidual and is a retail dealer of IMFL. Assessee filed return of income on 31-08-2009 declaring an income of Rs. 2,06,130/-. The case was selected for scrutiny under Computer Aided Scrutiny Selection [CASS] method for verifying the sources of cash deposits above the threshold limit in saving bank account. In the scrutiny assessment, since assessee has produced the savings bank A/c copies and explained that deposits are made from sale proceeds of IMFL and the corresponding withdrawals were utilized for business purposes, AO accepted them. Since assessee did not furnish the evidence in support of expenditure claimed, Assessing Officer (AO) disallowed round-sum amount of Rs. 3 Lakhs to the returned income. However, while making the addition in ....
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....approached an advocate to submit the information before the CIT. Since there is no representation, no order was also received by assessee. Subsequently, it was noticed that the order issued by the CIT was stated to have been served on 23-12-2014 and that case was not properly represented before the CIT. Consequently, assessee's uncle approached another advocate/tax consultant, who prepared the appeal papers, obtained the signature and paid the fee also of Rs. 10,000/- on 19-02-2005. However, the appeal could not be filed in time and consequently filed only on 05-10-2015 with the delay of 281 days. It was explained that the fee payable was only Rs. 500/- but paid more, the consultant was requesting the bank authorities to rectify the same an....
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....e Balance Sheet and P&L A/c filed along with return of income. He further submitted that AO in the consequential order also did not make any addition which indicates that these two issues raised by the CIT do not pertain to assessee. 7. Now, coming to the issues at item No. 2 & 3 are concerned, the opinion of the CIT is not correct as assessee has maintained Books of Accounts which were not rejected by the AO. What AO has done after verifying the deposits which were required to be verified under CASS, has disallowed the expenditure claimed in the Books of Accounts. Since AO accepted the Books of Accounts, estimation of income on the purchases does not arise. Consequently, the opinion of the CIT for directing to estimating the income to 5....
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....counts to estimate the income. Therefore, in our view, CIT is not correct in exercising jurisdiction on this issue. Like-wise, the examination of license fee of Rs. 38,20,875/- which was claimed in P & L Account. AO examined various deposits in the bank account and corresponding withdrawals. His finding in the assessment order is as under: 'When asked, assessee's AR says that the cash deposits are met from the sale proceeds of IMFL and the corresponding withdrawals were also utilized for business purposes'. This indicates that the expenditure claim towards IMFL is either from the sale proceeds of the IMFL or withdrawals from the bank account. It may be true that AO did not leave any notes about the examination of various items. But ha....