TaxTMI 
TaxTMI 
2017 (3) TMI 800
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....he "Act") for AYs 2006-07 and 2007-08 vide his separate orders dated 31.12.2008 and 25.11.2009 respectively. Since some of the issues are common and facts are identical, we dispose of both these appeals by this consolidated order for the sake of convenience. 2. The first interconnected issue to be decided in these appeals is as to whether the ld CITA was justified in upholding the addition in the sums of Rs. 10,89,507/-17,84,000/- towards cash deposits in bank account for Asst Years 2006-07 and 2007-08 respectively in the facts and circumstances of the case. 2.1. The brief facts of this issue is that the assessee is deriving income from trading and export of leather goods and raw leather under the name and style of "Arjun Associates".....
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....ssee as on 31.3.2007. The ld AO however, not convinced the explanation proceeded to hold that the cash deposits in bank account were not properly explained and hence brought the same to tax as unexplained cash credit u/s 68 of the Act to the tune of Rs. 17,84,000/- . 2.2. Before the ld CITA, the assessee stated that the cash deposits are explained by cash withdrawals from the bank and out of cash flow statement of the assessee . Moreover, the copies of bank book, bank statements together with cash analysis statement were filed before the ld AO which had not been properly appreciated by the ld AO. It was also explained that the assessee in order to reflect huge banking turnover for the purpose of availing higher credit limits for the purp....
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....ted cash book furnished by the assessee, he stated that the said cash book has no relevance and as this cash book is part of business activities of the assessee or the books of accounts of the proprietorship concern and therefore appears to have been prepared only to bolster the arguments of business purpose of these transaction. Accordingly he concluded that the cash flow statement is not supported by any document or evidence in support of the requirement for cash withdrawals and subsequently the deposits. He observed that these are not transactions related to the business of the assessee but cash deposits in his personal savings bank account. Based on these observations, he upheld the action of the ld AO. 2.3. For the Asst Year 2007-08....
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....cordingly he concluded that the assessee cannot claim that the entries were not there in his books of accounts and upheld the addition made by the ld AO. 2.4. Aggrieved, the assessee is in appeal before us on the following ground :- "2. That on facts and circumstances and legal position of the case the CIT(A) has erred in confirming addition made by Id AO wherein he had erred in making addition of Rs. 1 0,89,507/- by erroneously holding that the cash deposit in bank is undisclosed income of the appellant on tire following grounds That the above addition is erroneous since the source of each cash deposit was duly explained. * That the cash deposit in bank is out of withdrawals either from same bank account or other bank acc....
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....ssessee had made huge cash withdrawals on a frequent basis and had made cash deposits on a frequent basis. We also find that sometimes the assessee had withdrawn the cash on the previous day and had deposited the same in the next day. Sometimes cash is withdrawn from one bank account and the same is deposited in another bank account of the assessee maintained with Standard Chartered Bank. Hence it could be safely concluded that the assessee had merely resorted to circulation of cash transactions in various bank accounts of the assessee which are disclosed in the balance sheet. It is not in dispute that the entire bank accounts are duly disclosed by the assessee in his balance sheet comprising of both personal and business transactions. We h....
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.... also made by him in our file. Accordingly, the Ground No. 3 for Asst Year 2006-07 is dismissed as not pressed. 4. The Ground Nos. 1 and 4 raised for the Asst Year 2006-07 and Ground Nos. 1, 4 and 5 for Asst Year 2007-08 are general in nature and does not require any specific adjudication. 5. The next issue to be decided in this appeal for Asst Year 2007-08 is as to whether the ld CITA was justified in upholding the action of the ld AO in disallowing accounting charges of Rs. 60,000/- u/s 40(a)(ia) of the Act in the facts and circumstances of the case. 5.1. The brief facts of this issue is that the ld AO observed that the assessee had debited Rs. 60,000/- as accounting charges in the profit and loss account. The ld AO observed that....