2019 (11) TMI 97

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....pened by issuance of notice u/s 148 of the Act duly served upon the assessee on 15.04.2015. In response thereto, the return of income was filed on 15.05.2015 declaring income of Rs. 1,79,130/-. Notice u/s 143(2) of the Act duly served upon the assessee. The assessee was asked to explain the source of cash deposit of Rs. 49,48,9900/- in the same bank account hold with IDBI bank. The assessee submitted that the alleged amount was collected from the "Feriwalas" against cloth supplied to them and commission @ 1% was earned on purchased clothes. Income from commission has been duly offered to tax. The total turnover of the assessee including the commission income was below the limit of tax audit provided u/s 44AB of the Act. 4. Ld. Assessing Officer, however, brushed aside the submissions of the assessee and computed net profit of the wholesale business @9.1% on the undisclosed turnover of Rs. 49,48,900/- and made addition of Rs. 4,50,350/-. 5. Ld. AO also initiated the penalty proceedings u/s 271B of the Act for not getting account u/s 44AB of the Act since the declared turnover of the assessee was increased by the alleged turnover of cash deposit in the bank account. The instant....

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....ed the income of commission of Rs. 50,000/- being 1% of the alleged deposits of Rs. 49,48,9000/- to tax. Reliance was placed on following decisions: 1. Brij Lal Goyal vs. ACIT (I.T.A.T., Del) 88 ITD 413 (2004) 2. Shri Satya Prakash Mundra vs. ITO Kishangarh ITA No. 754/JP/2016 (I.T.A.T. Jaipur) 3. Shri Nirmal Kumar Joshi vs. ITO Kishangarh ITA No.73/JP/2018 (I.T.A.T. Jaipur) 4. Surajmal Parsuram Todi vs. CIT ITR No.27 of 1993(Gauhati High Court) 5. ACIT vs. Ashok Kumar Mohallal Kothari and others in ITANo.166 and 167/Nag/1997(I.T.A.T. Nagpur) 9. Per Contra Ld. Departmental Representative (DR) supported the orders of the lower authorities. 10. We have heard rival contentions and perused the record placed before us. The sole grievance of the assessee relates to levy of penalty u/s 271B of the Act at Rs. 35,830/-. The undisputed facts remains that in the return of income, assessee has disclosed turnover of Rs. 21,66,292/-. The assessee also disclosed commission income @1% of the turnover of Rs. 49,48,900/- being a transactions of cash deposited and withdrawal relating to purchase of clothes for hawkars/Feriwalas. The assessee claim wa....

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....3A of the Act conducted in the case of one Shri P.C. Vijayvargiya and others on 06/11/2011 found that Shri P.C. Vijayvargiya was having bank deposits which according to him was sale consideration of marble traders of Kishangarh. The A.O.proposed to make the addition of 10% of the unaccounted sale of Rs. 38,40,000/- found to be belonging to the assessee. The assessee agreed to the addition of 10% of the said unaccounted sale in the assessment proceedings. Based on the said addition, the Assessing Officer was of the view that the assessee's turnover has exceeded the limit of Rs. 60.00 lacs as provided U/s 44AB of the Act and consequently the assessee has violated the mandatory condition of his books of account to be audited. The penalty U/s 271B of the Act has been levied by the Assessing Officer due to the reason that there was an addition on account of unaccounted sale. Thus, it is clear that at the time of preparing the books of account, the turnover of the assessee was only Rs. 24,80,995/- and consequently it was not necessary to get the books of account audited as required U/s 44AB of the Act. The A.O. has made the addition based on the survey conducted in the case ....

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....ofit of 8.09% on total reported turnover of Rs. 48,98,269. In such a situation, having not disturbed the said position under section 44AD, it cannot be said that the assessee has failed to get his books of accounted where undisclosed business receipts of Rs. 43,34,064/- are brought to tax during the course of assessment proceedings and whereby the prescribed turnover threshold has been breached. Had the Revenue rejected the assessee's claim under section 44AD of the Act and thereafter, taking into consideration the declared turnover of Rs. 48,98,269 and undisclosed business receipts of Rs. 43,34,064, had come to a position that the assessee has failed to get offered his books of accounted, that in a such a scenario, the contention of the Revenue could have been accepted. Further, what has been referred in section 44AB is the books of accounts maintained in the regular course of business and where an admission is made by the assessee based on third party statement during the course of survey that the amount found deposited in the bank account belongs to the assessee, it cannot be said that regular books of accounts are maintained even in respect of unaccounted sales or business ....