TaxTMI 
TaxTMI 
2020 (12) TMI 665
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.... Commissioner of Income Tax (Appeals) having accepted that the appellant is engaged in civil works contract and the income derived from the said business is taxable @ 8% u/s 44AD of the Incometax Act, 1961, erred in directing the Assessing Officer to include peak credit on the total deposits in the appellant's bank account amounting to Rs. 20,56,013/-in computing the assessed income." 3. Brief facts of the case are that the assesse is an individual deriving income from salary, income from house property and income from other sources filed her return of income for the assessment year 2010-11 on 11.10.2010 declaring total income of Rs. 14,03,558/-. The assessment has been, subsequently reopened u/s.147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the reasons recorded, as per which income chargeable to tax had been escaped assessment on account of non-disclosure of certain savings bank account maintained with Bank of India, West Mambalam branch, and accordingly, notice u/s.148 dated 30.03.2015 was served on the assessee. In response to the notice, the assessee vide her letter dated 26.08.2015 stated that return originally filed on 11.10.2010 may be treated a....
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....nd argued that cash deposits found in her savings bank account maintained with the Bank of India, West Mambalam branch has been explained with known source of income . However, the Assessing Officer has rejected the explanation offered by the assessee and has made addition towards peak credit on the ground that assessee has failed to explain source of income for cash deposits. The Assessing Officer also made further addition towards 8% profit on balance cash deposits found in her bank account under the provisions of Section 44AD of the Act, even though the assessee explained source for cash deposits. He further argued that once the Assessing Officer himself had admitted the fact that assessee has received cash from her civil contract business and has estimated profit from said business by applying presumptive taxation rate applicable u/s.44AD of the Act, he ought to have considered total cash deposits found in her bank account as receipts from business and has estimated the profit of 8%. During the course of appellate proceedings, the learned CIT(A) has forwarded additional evidences to the Assessing Officer for his comments . In response, the Assessing Officer filed a remand repor....
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....bank credit is accepted as turnover from her business and profit has been estimated on presumptive basis u/s.44AD of the Act, then there is no reason to accept part cash deposits as business receipts and part as unexplained investments. In this regard, he relied upon certain judicial precedents including the decision of Bangalore Bench of this Tribunal in the case of Mr. Girish V.Yalakkishettar vs. ITO, Hubli in ITA No.354 & 355/Bang/2019. 8. The learned DR, on the other hand, submitted that the Assessing Officer as well as learned CIT(A) have brought out facts clearly that the assessee has failed to explain source of income for cash deposits found in her bank account and accordingly has arrived at unexplained investments by estimating peak credit method for part of the cash deposits and the remaining cash deposits has been accepted as contract receipts and estimated 8% profit by applying the provisions of section 44AD of the Act. Therefore, there is no error in the findings recorded by the authorities below to estimate income out of unexplained cash deposits found in the assessee's bank account, hence their orders should be upheld. 9. We have heard both the parties, perused the....
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....not maintained regular books of account for the said activity. The Assessing Officer having accepted the explanation furnished by the assessee regarding her business activity and source of income for cash deposits found in her bank account, he ought to have accepted the explanation furnished by the assessee towards total cash deposits found in her savings bank account. 10. In this case, the Assessing Officer has accepted part of cash deposits as out of her business receipts and part of cash deposits as her unexplained investments, without brought on record any cogent reasons to justify different view taken on cash deposits found in her bank account during the same financial year. The learned CIT(A) has also simply upheld the findings of the Assessing Officer without assigning any reason why explanation furnished by the assessee regarding source of income for cash deposits found in her bank account was accepted in part, cannot be accepted for remaining cash deposits found in the same bank account. Therefore, we are of the considered view that Assessing Officer as well as learned CIT(A) were erred in assessing part of cash deposits as unexplained investments to be taxed u/s.69 of t....