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2020 (1) TMI 1354
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.... work. For AY 2015-16, the Assessee filed return of income declaring total income of Rs. 16,55,650. The AO completed the Assessment u/s.144 of the Income Tax Act, 1961 (the Act) i.e., Best Judgment Assessment because the Assessee did not respond to the various notices issued by the AO calling for various details. In the assessment so completed, the AO noticed that the contract receipts of the Assessee as per Form 26AS i.e., the details of Tax deduction at source (TDS) the receipts of the Assessee from contracts was Rs. 3,28,21,904 as against the contract receipts of Rs. 2,78,98,724 declared by the Assessee in the return of income. The AO added 10% of the difference of Rs. 49,23,180 viz., a sum of Rs. 4,92,318 as profit on contract receipts ....
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....ks of accounts of the Assessee viz., a sum of Rs. 4,92,318 being 10% of Rs. 49,23,180/-, the plea of the Assessee before CIT(A) was that the addition should have been @ 5.39% which was the net profit declared by the Assessee in the return of income on the contract receipts as per the books of accounts. The CIT(A) called for a remand report from the AO. The AO in his remand report pointed out several defects/discrepancies in the books of accounts of the Assessee. The CIT(A) was of the view that the books of accounts of the Assessee have to be rejected and he accordingly rejected the books of accounts of the Assessee by invoking provisions of Sec.145(3) of the Act and estimated the income of the Assessee @ 8% of the contract receipts as pe....
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....puterised Books of Accounts like Day Book, Cash Book, Ledgers and Bank Account Statements. On verification of said Books of Accounts and Bank Statements (including the Statement of Bank Account No. 21170100006945, Federal Bank Limited Koppal), it is observed that: a) All Cash Deposits made in Bank Account No. 21170100006945, Federal Bank Limited, Koppal are properly reflected in the Cash Book maintained by the assessee. b) The Closing Balance in said Account Rs. 48,111/- has been shown under the head Cash at Bank (Rs,25,45,279/-) in the Balance Sheet filed along with ROI. 7. In view of the above, the Sources for Cash Deposits made by the assessee stands explained. However, I would like to bring it on record that t....
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....of scrutiny. This renders the cash balance as per books of accounts doubtful for the reason that the genuineness of trade payable were not cross verified and confirmed. 8. In view of the above discrepancies, I have my own doubt about the genuineness of Cash Balance as per Books which the assessee explained as Source for Cash Deposited into Bank Account. In view of this, I am unable to vouch the veracity of books of accounts produced before me for verification. Accordingly. I request the CIT(A) to dispose off the case on its merits." 5. The CIT(A) accepted the remand report and held that the source of funds to the extent of Rs. 25,67,000/- being cash deposits in the bank account remained unexplained. The CIT(A) however gave benefit ....
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.... that the Assessee could have discharged sundry creditors instead of having cash in hand cannot also be the basis to doubt the genuineness of the cash availability as per cash book. He therefore submitted that the addition of Rs. 26,57,000/- deserves to be deleted as the source of funds for cash deposit in the bank account stands duly explained and therefore the addition sustained by the CIT(A) should be deleted. The learned DR relied on the order of the CIT(A). 7. I have considered the rival submission and am of the view that the addition of Rs. 26,57,000/- sustained by the CIT(A) deserves to be deleted and therefore the question of allowing telescoping benefit does not arise for consideration at all. As rightly submitted by the learned....