TaxTMI 
TaxTMI 
2019 (4) TMI 1815
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....ss agriculture income; (iv) deleting the addition of Rs. 94,53,800/- made u/s 68 on account of unexplained cash deposits;" CO No. 35/JP/2017 (Assessee's Grounds of appeal): "1. The impugned order u/s 143(3) dated 31.03.2015 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same may kindly be quashed. 2. Rs. 13,55,000/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in sustain the addition of Rs. 13,55,000/- on account of cash deposit in Axis Bank, Kota. Hence the addition so made by the AO and partly confirmed by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full. 3. The ld. AO erred in law as well as on the facts of the case in charging of interest u/s 234B, 234C & 234D as consequential in nature. The appellant totally denies it liability of charging of any such interest. Hence the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full." 2. Briefly the facts of the case are that the assessee is a sole proprietor of M/s Raj Shree Goods Transport ....
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....expenses, Telephone & mobile expenses, interest and audit fees etc,. the assessee was asked to produce complete bills, vouchers along with complete justification of above expenses, whether expenses incurred by you wholly and exclusively for the business purpoes as per Section 37 however, the assessee has failed to produce the vouchers against various expenditure claimed in the Profit and loss account. The Assessing Officer accordingly held that the books of accounts maintained by the assessee are not open for verification and therefore the real profit cannot be ascertained and therefore invoked the provisions of Section 145(3) of the IT Act and thereafter has estimated the net profit @ 5% as against 2.39% declared by the assessee which has resulted in trading addition of Rs. 848,795/- to the returned income. 5. Being aggrieved the assessee carried the matter in appeal before the ld. CIT(A) who has held that the AO's reasons for rejection of books of accounts are not justifiable for various reasons. As per the ld. CIT(A), the AO has not doubted the nature of receipt as such in the bank account and enhancing only the GP rate while passing the order, it is clear that he was only dis....
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....ars which come to 1.71%. It was submitted that the Hon'ble Rajasthan High Court has also held that for estimation of NP rate, past history of the assessee of last 5 years may be taken as a reasonable basis for estimation and in this regard our reference was drawn to the decision of Hon'ble Rajasthan High Court in case of Shri Kishan Kumar Saraiwala vs. CIT (DBIT No. 325 and 338/2011 dated 29.08.2017). It was further submitted that even where the books of accounts are rejected, mere rejection of books of accounts need not necessarily lead to additions to the returned income and in support reliance was placed on the Hon'ble Rajasthan High Court in case of CIT vs. Gotan Lime Khaniz Udyog 256 ITR 243. It was submitted that in such cases, in view of better results declared by the assessee based on assessee's past history, no trading addition can be made in the hands of the assessee. 8. We have heard the rival contentions and perused the material available on record. We are of the view that the books of accounts have been rightly rejected by the Assessing officer as the assessee failed to produce the books of accounts for verification and in absence thereof, it is difficult for the Ass....
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....s to Rs. 7074/- per bigha. When the assessee's cost on hired land is much less than the estimation resorted by the A.O., then in order to establish how the cost of agricultural proceeds on self owned land could be double, the Assessing officer should have brought some scientific or practical findings on record, which he failed to do. By resorting to this entire hypothetical averaging, he has aimed to reduce the agricultural receipts by an amount of Rs. 1, 76,330/ -, which constitutes around 7% of the total agricultural receipts shown by the assessee. In the entirely of facts, the whole working of the A.O. is found to be neither backed by any enquiries, nor any basis which is sustainable. The addition by way of reduction in the claim of agricultural income without holding any expenses as false is held to be unjustified and directed to be deleted. This ground of appeal is allowed." In the result, ground no. 3 of the Revenue's appeal is dismissed. 10. In ground no. 4 the Revenue has challenged the deletion of addition of Rs. 94,53,800/- made U/s 68 on account of unexplained cash deposits and the assessee in his cross objection has raised the sustenance of Rs. 13,55,00....
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.... the other banks listed in A.O.'s order, are also appearing. Thus, substantial information is on record with the A.O. & all he needed to do was to carry out independent enquiries on the bank accounts, which though he initiated, but apparently he did not take to logical conclusion. 4) The ledgers filed with the submissions shows that there are substantial cash entries. On a perusal of the assessee's letter dated 30/03/2015 also he has clarified deposit to an extent of Rs. 62,43,800/- while not knowing the details of two other bank accounts because these account numbers were wrongly mentioned by the A.O. Thus while an amount of Rs. 55,78,970/- out of agricultural operations was received in cash which remains uncontroverted by the A.O. as well, the balance amount of Rs. 55,05,530/- which constitutes 1/6th of the receipts of transportation needed to be linked to the cash deposited in Bank Accounts. 5) further, out of the transportation receipts, the A.O. has not made out a case that there was cash income outside the books of accounts so the source of the remaining cash remained unexplained. There are numerous deposit and withdrawal entries for cash in different accounts on dif....
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....13,55,000/- made in Axis Bank, Kota. This amount is thus treated as unexplained cash deposit u/s 68 and addition to this extent only is liable to be confirmed out of the total addition of Rs. 1,08,08,800/-. The balance addition of Rs. 94,53,800/- is directed to be deleted. This ground of appeal is partly allowed." 13. Both the parties were heard and material available on record gone through and we find that similar issue was involved in the earlier assessment year 2011-12 wherein the Coordinate Bench (vide its order in ITA No. 470/JP/2015 dated 8.11.2017) has similarly deleted the addition made U/s 68 of the Act where the receipt from the transportation business and agriculture produce far exceeds the quantum of deposits in the bank accounts. Following the same and in view of the detail findings of the ld CIT(A), as we have noted above, wherein he has given a specific finding that cash deposit receipts are matching from the bank book & ledger accounts, we find that the source of cash deposit in his bank accounts has been reasonably explained to be out of assessee's transportation business and agriculture produce. Therefore, we affirm the order of the ld CIT(A) to the extent wh....