AI Drafter 
TaxTMI 
TaxTMI 
2018 (9) TMI 965
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.... as the "Act"). 3. Briefly stated facts are that the assessee is an individual carrying on business under the trade name and style of M/s. Hemraj Distributors. The assessee's case was selected for scrutiny on the basis of AIR information that he received cash deposit of Rs. 3,38,60,700/- in his savings bank account with ICICI Bank Ltd. and further CIB information that the assessee had made an investment of Rs. 47,89,000/- in the name of his proprietorship concern M/s. Hemraj Distributors. The assessee was asked to explain the source of investment of the money deposited in banks either in the name of himself or in the capacity of being the proprietor of M/s. Hemraj Distributors. The assessee filed an affidavit dated 03.10.2012 wherein he ....
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....the AO after taking note that Rs. 3,86,49,700/- has been deposited in his accounts, the AO issued notice to 11 persons. However, we note that the assessee for the questions asked by the AO which has been recorded by him on oath u/s. 131 of the Act, has categorically stated that he was an employee of a proprietorship concern of Mr. Manish Agarwal and was drawing a meagre salary of Rs. 5000/- per month and on his (Manish Agarwal) instruction has opened a bank accounts in the name of M/s. Hemraj Distributors and another in the name of M/s. R. P. Traders and has deposited cash and withdrawn/ transferred the same simultaneously. So when the amount was deposited in the bank it was immediately thereafter transferred to other accounts. To corrobora....
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....truction only they deposited and withdrawn/transferred the amount has not been mentioned anywhere in the AO's order, which action/omission does not behoves well with a quasi judicial authority like the AO while discharging his duty as an assessment officer to assess the true income of the assessee. The AO ought to be fair and just in his approach and conduct. In this case the AO though has recorded the statement of assessee and his colleague and even though was aware of the fact that assessee was an employee who draws only Rs. 5000/- has saddled the entire cash deposit in his bank account as his income which action of AO cannot be countenanced in the light of the facts discussed above. The AO has not enquired into the veracity of the statem....
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....accounts who may be the beneficiary or it may go in circulation and ultimately it will go into the hands of ultimate beneficiary who should be taxed and not the assessee, whose account was used as pass on platform to facilitate deposit and transfer of money. In any case, if the AO has reason to believe that cash deposited in his account is his undisclosed income then he ought to have made some field enquiry to at least expose any falsity in his statement that he was only employed for Rs. 5000/- for that purpose if the AO gets information that assessee's life style is not in conformity with that of a person who is having an income of Rs. 5000/- per month and that he owns immovable property etc, which action AO did not carry out. No effort to....
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....s 'Nil' as on 18.05.2010 or meagre amount of Rs. 781/- as on 30.03.2010. The status of the assessee as an employee of Shri Manish Agarwl has been corroborated by his colleague Shri Rakesh Kumar Gupta and that the assessee was an employee drawing a salary of Rs. 5000/- per month and, therefore, has acted as per the instruction of his employer and since we note that there is no balance in his bank accounts worth mentioning only points to one direction that is the cash deposited in his account cannot be the income of the assessee from his undisclosed source. The assessee has been mis-utilized by his employer to route the cash through his bank account. In such a scenario, rather than finding out the real beneficiary in the whole modus operandi,....