TaxTMI 
TaxTMI 
2020 (11) TMI 765
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....Officer and confirmed by the ld. CIT(Appeals) on account of the profit allegedly earned by the assessee on undisclosed turnover. 2. The assessee in the present case is an individual, who is engaged in the business of distribution of food and supply of Ration Goods and dealing in Lafarge and ACC Cement. The return of income for the year under consideration was filed by him on 17.09.2014 declaring total income of Rs. 5,54,330/-. The said return was selected for limited scrutiny on the ground that the cash deposits found to be made in the Savings Bank Accounts of the assessee were more than the turnover. During the course of assessment proceedings, the Assessing Officer found that the assessee has maintained three Bank accounts namely Accou....
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.... case that the addition of Rs. 51,63,531/- made by the Assessing Officer on account of profit allegedly earned on undisclosed turnover was not sustainable: - "The assessee hhas three bank accounts viz. (i) Paschimbanga Gramin Bank, (ii) CC Account with UCO Bank, Shyampur and (iii) State Bank of India, Uluberia. All the cash received from the ration shop is deposited in Paschimbanga Gramin Bank account and from the same, the demand drafts are prepared for payment to FCI. It is submitted that the total sales on account of this business as disclosed in my books of accounts is Rs. 3,29,61,654/- whereas the total deposits in the Paschimbanga Gramin Bank account is Rs. 2,91,40,029/-. Therefore, the total amount deposited in Paschimbanga ....
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.... contained and payment made for the same is part of the profit and loss account and books of accounts. The non-mention of the account in the balance sheet is a sheer bonafide mistake which is further proved from the fact that the genuine interest paid on the overdraft CC account was also not debited to the profit and loss account. Therefore, in such circumstances the AO could have added the closing balance in the bank account as income. However, on the facts this addition was not called for since in UCO Bank there was OD of Rs. 17,38,565/- as on 31.03.2014 and in Paschimbanga Gramin Bank, there was balance of Rs. 77,158/- only. The bank balance on the opening day i.e. 1.4.2013 was Rs. 1,37,752/-. Hence, the balance was not more than the ope....
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....(A/c. no. 08160510000298) & (iii) State Bank of India, Uluberia (A/c. No. 11245243909). The appellant had reflected only account with State Bank of India, Uluberia, A/c. No. 11245243909 in its audited balance sheet. The remaining two bank accounts were not reflected in the audited balance sheet of the appellant. The AO had estimated undisclosed income earned from these two undisclosed bank accounts @ GP rate of 9.52% on total deposits amounting to Rs. 5,42,38,779/-. The A/R of the appellant in his submission had stated that the omission to include these two bank accounts in the audited balance sheet is due to oversight and that all the purchases and sales made from these two bank accounts have been reflected in the audited....
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....ntion of the ld. Counsel for the assessee. While examining the issue of cash deposits in the Bank accounts of the assessee being more than the turnover, it was found by the Assessing Officer that two Bank accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank were not reflected in the accounts of the assessee. He also noticed that huge deposits aggregating to Rs. 5,42,38,779/- were made in the said Bank accounts and since the said Bank accounts were found to be not reflected in the accounts of the assessee, the same were treated by him as the undisclosed turnover of the assessee's business and estimated profit thereon was added by him to the total income of the assessee. It is thus clear that the impugned addition m....
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....he assessee could not co-relate between the cash deposits found to be made in his two Bank accounts and the sales reflected in the books. As already noted by us, serious discrepancies were found in the books of account of the assessee, inasmuch as, the substantial balances in the two accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank were not reflected in the audited balance-sheet of the assessee. Similarly the interest earned by the assessee in one Bank account as well as interest charged in the other Bank account was also not reflected in the accounts of the assessee. Keeping in view these serious discrepancies seriously doubting the reliability of the audited accounts of the assessee, the onus, in our opinion....