2017 (4) TMI 294

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....case, the learned CIT(A) has erred in law in holding that the deposits of Rs. 55,59,989/- were not unexplained credits but represented trading receipt. ii. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 3. The facts in brief are that the assessee filed return of income on 11/02/2009, declaring total income of Rs. 3,46,100/-, which consist of salary income of Rs. 3,00,000/-, capital gain of Rs. 19,811/- and interest income of Rs. 1,26,287/-. The return of income was processed under section 143(1) of the Act on 17/12/2009. During the course of assessment proceeding for AY 2009-10, the Assessing Officer called a copy of bank statement from the ICICI Bank and on perusal of the same, he found deposits of Rs. 55,60,287/- for the financial year corresponding to the assessment year under consideration. The deposits included cash deposits of Rs. 19,41,239/-. Since the returned income could not justify the deposits of Rs. 55,60,287/-, the case was reopened under section 147 of the Act, by way of issuing notice under section 148 of the Act. In response to the notic....

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....Ld. DR submitted further that bank account in the year under consideration is different from the bank account considered in AY 2009- 10. He submitted that assessee has filed return of income under presumptive Scheme of computation of income under section 44AF of the Act, which is available for retail trade. The Ld. DR further submitted that money was deposited in bank account it outstations like Jaipur, Bareilly, Amritsar, Ludhiana etc., and which is not possible in case of retail trade. According to the Ld. Authorized Representative, the onus was on assessee to satisfy that it was covered under section 44AF of the Act. He further submitted that the assessee has not enclosed the documents alongwith the return which were required in terms of explanation (f) to section 139(9) of the Act. 6. The Ld. Authorized Representative, on the other hand, prayed that neither by the Assessing Officer, nor by the Ld. CIT-A or even the Revenue in its ground has alleged that fact for assessment year 2009-10 were not identical to facts of the year under consideration. It was stated that bank account in respect of which addition has been made in the instant year, was also under consideration in ass....

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....osits in the bank account of the appellant which is as under: Month Total Deposits (Rs.)   Total Deposits No . of Deposits Maximum Deposits Minimum Deposits Average April,2008 15,04,590.00 49 1,50,000.00 4,000.00 77,000.00 May,2008 9,13,520.00 45 49,000.00 4,700.00 26,850.00 June,2008 11,71,705.00 37 2,00,000.00 2,800.00 1,01,400.00 July,2008 8,41,178.00 22 1,00,000.00 9,000.00 54,500.00 August,2008 5,96,925.00 16 50,050.00 18,000.00 34,025.00 September,2008 4,85,975.00 16 47,650.00 6,000.00 26,825.00 October,2008 3,65,625.00 12 40,850.00 10,000.00 25,425.00 November,2008 3,28,310.00 10 53,250.00 5,200.00 29,225.00 December,2008 6,59,515.00 19 90,000.00 5,800.00 47,900.00 January,2009 9,88,270.00 29 50,000.00 11,570.00 30,785.00 February,2009 7,49,480.00 25 84,640.00 8,000.00 46,320.00 March,2009 11,02,500.00 31 1,00,000.00 1,360.00 50,680.00 Total 97,07,593.00 311 10,15,440.00 86,430.00 5,50,935.00   6.3 From th....

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....00.00 8 40,000.00 20,000.00 30,000.00 November, 2008 2,75,060.00 9 49,000.00 5,200.00 27,100.00 December, 2008 2,01,900.00 7 46,000.00 5,800.00 25,900.00 January, 2009 5,48,650.00 16 49,000.00 18,000.00 33,500.00 February, 2009 3,44,400.00 12 46,100.00 8,000.00 27,050.00 March, 2009 4,29,000.00 13 46,500.00 11,600.00 29,050.00 Total 4,12,1685.00 129 5,56,350.00 1,43.300.00 3,49,825.00   6.4 Having regard to the above quantum of deposits and frequency of deposits, it can be reasonably concluded itself that there is merit in the claim of the appellant that such deposits are not pure cash credits being loans or advances raised by the appellant. There is no dispute that appellant has adequate expertise in the business of chemicals since he is deriving salary from his father who is engaged in the business of chemicals. The statement of the appellant dated 28.6.2011 and 7.12.2011 support the claim of the appellant that deposits are in the course of business carried out by the appellant. The Assessing Officer has regarded the deposits as unexplained cash credi....

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.... that the assessee has stonewalled enquiries by not producing any evidence and therefore, no relief is warranted on the facts of the case of the appellant more particularly when the assessee is not maintaining any books of accounts. We find that the aforesaid argument of the revenue does not deserves any merit for the reason that here admittedly even as per the Assessing Officer, there is no stonewalling of the enquiry. On the contrary, it is not a case where either of the authorities below have even alleged that the assessee has not cooperated during the course of assessment proceedings. It is a matter of record that two statements of the assessee have been recorded, affidavit was filed and replies have been furnished during the course of assessment proceedings. Thus, it is a case where assessee has tendered an explanation and such an explanation has not been found acceptable and therefore, the matter is before us and it is not a case where the assessee has evaded assessment proceedings. So far as the argument that assessee has not been able to produce evidence in the shape of bills or for that matter, books of accounts to support nature of the deposits, that fact cannot be a grou....

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....ect and true tax liability of the assessee and not to determine any notional or hypothetical income of the assessee. In view of that matter, we direct the Assessing Officer to compute the income of the assessee @ 5% of the total receipts of Rs. 97,07,593/- at Rs. 4,85,379/- and the balance addition of Rs. 92,22,214/- is therefore, directed to be deleted. The ground raised are thus partly allowed." 8. The Ld. CIT-A following the order of the Tribunal (supra) decided the issue in favour of the assessee and directed the Assessing Officer to delete the impugned addition. The finding recorded by the Ld. CIT-A in para-4.1 from page 22-27 of the impugned order has not been controverted by the Department by bringing any positive material on record. 9. The Ld. DR has contended before us that facts for assessment year 2009-10 and facts of the instant year are not identical. However after having examined the assessment order, we are unable to accept the above contention. The AO had initiated the proceeding under section 147 of the Act on the basis of the assessment proceeding for assessment year 2009-10. Further while making the addition in the year under consideration, the AO has not r....