2018 (3) TMI 522

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....n of income declaring total income of Rs. 5,57,390/- on 28.09.2011. The case was selected for scrutiny and the assessment was completed on total income of Rs. 58,14,450/-. During the assessment proceedings, the Assessing Officer(AO) made the following additions to the returned income which were disputed by the assessee : (i) Unexplained cash credits - Rs.43,42,300/- (ii) Bonus and accounting charges Rs. 2,16,000/- (iii) Staff Salaries Rs. 6,48,000/-   3. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) restricted the disallowance of staff bonus to10% and accounting charges to15% of the expenses incurred. With regard to unexplained cash credits u/s 68, the Ld.CIT(A....

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...., Mumbai, in the case of M.H Raney vs. 110(145 lTD 573(MUM), in which the Hon'ble ITAT held that unless the assessee explains the nature of cash deposits in the bank and their utilization satisfactorily, the peak credit method is not applicable. 6. Any other ground that may be urged at the time of hearing. 5. Ground No. 1 and 5 are general in nature, which do not require specific adjudication. 6. Ground No.2 is agitated against disallowance of staff salaries to 10% against the disallowance made by the AO at 30%. 7. Ground No.3 is related to the restriction of disallowance of staff bonus to 10% as against complete disallowance made by the A.O. 8. Ground No.4 is related to the restriction of disallowance to 15% on acc....

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....or AY 2010-11 & 2.69% for AY 2009-10. The net profit declared for AY 2009-10 was 1.12%, for AY 2010-11 it was 0.36% and for the subject year it was 0.37%. Taking into consideration these details, I consider it reasonable and fair to estimate the disallowance towards salaries & staff bonus at 10% of the expenditure claimed and expenditure towards accounting charges at 15% of expenditure claimed. Accordingly the AO may recompute the total income." 11. During the appeal hearing, the Ld. DR did not bring any tangaible material to substantiate the disallowance of salaries at 30% and disallowance of entire expenditure in respect of staff bonus and accounting charges. No other material was placed on record before us to controvert the finding of....

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....er of the Ld.CIT, the revenue has filed appeal before this Tribunal. During the appeal hearing, the Ld.DR argued that the Ld.CIT(A) has erred in directing the AO to tax the peak credits instead of the entire cash deposits. The Ld. DR argued that the assessee required to explain the source of each deposit made in the bank account failing which the entire cash deposits required to be brought to tax. Ld. DR relied on the orders of the ITAT Mumbai Bench in the case of Late Mr. M.H. Raney vs. ITO [145 ITD 573]. 15. On the other hand, the Ld.AR relied on the orders of the CIT(A). 16. We have heard both the parties and perused the material placed on record. The assessee is having a bank account in Dhanalakshmi Bank and made cash deposits to ....