TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 220
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....eveals that the assessee had maintained another two bank accounts in Allahabad Bank, Rishra Branch, Hooghly where she had deposited Rs. 10,16,600/- and in Axis Bank Ltd., Serampore Branch, Hooghly where she had deposited Rs. 11,75,500/- during the relevant assessment year. According to AO, during the course of e-proceeding the assessee had filed the trading and P&L Account where she had disclosed net profit of Rs. 6,25,670/- and had also filed computation of total income and she disclosed commission earned of Rs. 15,813.44 and interest earned from the savings bank account of Rs. 127/-. According to AO, the assessee had not mentioned about these two bank accounts in Allahabad Bank and Axis Bank whereas she has deposited Rs. 10,16,500/- and Rs. 11,75,500 respectively totaling Rs. 21,92,000/-. According to AO, despite giving several opportunities assessee failed to explain the cash transaction in the undisclosed bank accounts and did not file any supporting evidence for cash deposit of Rs. 21,92,000/-. Therefore, the AO made the addition of Rs. 21,92,100/- as unexplained cash credit u/s. 68 of the Act. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) who was pleased to c....
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....ything contrary about utilization of such withdrawals. In our considered opinion, therefore, the AO.was not justified in adding back the entire receipts of Rs. 23,28,60l/- as unexplained investment u/s. 69A of the Act. We further observe that the entire deposit made in the undisclosed bank account was received by cheques from the clients and the expenditure claimed to have been incurred by the assessee for its business purposes has been described on page-8 of Id. C.I.T.(A)'s order. As rightly pointed out by Id. C.I.T.(A), if the action of AO. in treating the entire receipts in undisclosed bank account as income of the assessee is considered to be correct, the rate of net profit of the disclosed and undisclosed portion taken together would be more than 50% of the gross receipts, which is unlikely in the line of business the assessee is carrying on, more so when the AO. himself for AY. 2007-08 has taken the net profit of the assessee at 6%. Therefore, considering the totality of the facts and circumstances of the case, we find no infirmity in the order of Id. C.I.T.(A) in estimating the net profit @ 10% on the aggregate receipts of both the disclosed and undisclosed portion. We, ....
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....om the deposits in the bank account. Such facts are not present in the case of the assessee and therefore the decision of the Hon'ble Calcutta High Court should not be deleted. 13. I have given a very careful consideration to the rival submissions. The plea put forth by the ld. Counsel for the assessee has to be accepted. As rightly contended by the ld. Counsel for the assessee the entire contract receipts cannot be added as income. The assessee derives income from executing the contract job work and in doing so is bound to incur expenses. It is not the case of the revenue that all expenses including the expenses relatable to the undisclosed receipts from execution of contract job work has already been taken into consideration while arriving at the total income of the assessee declared in the return of income by the assessee. In such circumstances I am of the view that the belief of taxing 31.75% which is the disclosed gross profit of the assessee on the undisclosed contract receipts is just and fair and the plea of the Assessee in this regard is directed to be accepted. Ground nos. 2, 3 and 5 of the assessee are partly allowed." 7. As well as the Ld. AR drew my attention to the....
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....74758203 ) (31/03/2016) 5,740 10. Allahabad Bank (50174758203 ) Peak Credit 1,76,281 11. Axis Bank (443010100043500) 31/03/2015) 3,264 12 Axis Bank (443010100043500) 31/03/2016) 1,154 13 Axis Bank (443010100043500) Peak 2,06,690 14 Combined Peak of both Accounts 2,06,690 15 Total Deposits in both Accounts 2,192,100 16 GP% applied to Total Deposits (15*2) 1,93,124 17 Undisclosed Turnover Stock Rotation (15/7) 83,730.13 18 GP% applied to Total Deposits (15*2) 193,124 19 Seed Capital Undisclosed Turnover Stock Roration (15/7) 83,730 20 Total (18+9) 276,854 21 Combined Peak of both Accounts 206,690 10. From perusal of the above data, it can be discerned that the assessee had two undisclosed bank accounts i.e i) Allhabad Bank A/c (5017758203) opening balance as on 31-03-2015 is of Rs. 9,599/- and closing balance as on 31-03-2016 is Rs. 5,740/- and (ii) Axis Bank A/c ( 443010004350) opening balance as on 31-03-2015 is of Rs. 3,264/- and closing balance as on 31-03-2016 is Rs. 1,154/- . There has been regular deposits and withdrawal of the amounts in both bank accounts. The peak credit in the Allahabad Bank is Rs. 1,76,281/- and Axis Bank is Rs. 2,06,....