TaxTMI 
TaxTMI 
2021 (1) TMI 122
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....m business of the appellant by rejecting the financial statements despite there being audited financial statements and in estimating income from business at Rs. 60,00000/- as against the declared business income of Rs. 31,14,651/-. 2.2 The action of the Assessing Officer rejecting the financial statements is not in accordance with law and such an action has to be rejected in toto. 2.3 In any case no basis of estimation has been given by the Assessing Officer and therefore such an estimation without supporting is to be totally rejected and the addition made on this count as confirmed by Commissioner of Income-tax (Appeals) is to be deleted in entirety. 2.4 In any case and without prejudice, it is submitted that the estimation as made is very excessive. 3.1 The learned Assessment order had erred in making an addition of Rs. 1,07.27,000,- to the income of the appellant as unexplained cash deposits in bank and the learned Commissioner of Income-tax (Appeals) has erred in confirming the same. 3.2 The learned Assessing Officer had made the addition without furnishing the nature of information received by him and without informing the basis of ....
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....iness income of Rs. 31,14,651/- supported by the audited accounts of the assessee. He also submitted that in ground Nos.3.1 to 3.3, this is the grievance of the assessee that the AO is not justified in making an addition of Rs. 107.27 lakhs by holding that the cash deposits of this amount in the Bank in the present year is unexplained cash deposit. 6. Regarding the first issue in respect of estimation of income from business, learned AR of the assessee submitted that on page 2 of the Assessment Order, the AO has observed that as per the P & L Account filed by the assessee along with return of income, the assessee had shown receipt of hire charges of Rs. 7,89,40,086/- and claimed expenses of Rs. 6,68,92,563/- under the head "Hire Charges" and there are some other expenses and in this manner, the assessee has shown the net profit of Rs. 31,14,651/-. He pointed out that this is further observed by AO that in course of assessment proceedings, assessee was asked to produce the books of accounts, proof for the expenses claimed but in spite of giving several opportunities, the assessee did not produce the books of accounts and other details and on the basis of these observations, the A....
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....be relied upon for making this addition of Rs. 107.27 lakhs by alleging that the cash deposit in the Bank account of the assessee of this much amount is unexplained cash deposit. 9. Regarding merit of this addition also, it was submitted by learned AR of the assessee that on page 3 of the Assessment Order, the AO has observed that as per the information available in the office of the AO, the assessee has made cash deposits to the extent of Rs. 107.27 lakhs in the bank accounts held by the assessee and the assessee could not explain the source of such cash deposit and the AO came to the conclusion that this cash deposit in banks is unexplained cash deposits and made addition. In the course of hearing, it was submitted by learned AR of the assessee that on pages 17 to 85 of the Paper Book is the copy of bank statements for the period from 01.04.2011 to 31.03.2012 of the account maintained with Dhanalakshmi Bank Ltd., and similarly on pages 86 to 95 of the Paper Book is the bank account statement for the same period with the account maintained with HDFC Bank Ltd. He also submitted that on page 4 of the Paper Book is the audited balance sheet of the assessee as on 31.03.2012 as per ....
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....als of Rs. 78,57,380/- from the same two bank accounts and therefore, no part of cash deposit is unexplained. Regarding this issue also, learned DR of the Revenue supported the orders of authorities below. 11. We have considered the rival submissions and first we decide the additional Ground No. 2. We find that the books are rejected by the AO and income was estimated by him at Rs. 60 Lacs as against the income declared by the assessee at Rs. 31,14,651/- and the grounds raised by the assessee being Ground Nos. 2.1 to 2.4 are already rejected by us as per para No. 7 above. It means, rejection of books of accounts is confirmed by us. Now under these facts, we examine the applicability of this judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Bahubali Neminath Muttin (Supra). We first reproduce paras 23 & 24 of this judgment from page No. 7 of the Case law compilation. These paras read as under:- "23. The principle that if a finding of fact is not challenged as being perverse, the High Court is bound to accept such finding. Therefore, as no such substantial question of law has been framed and the questions pertain to findings of fact, which cannot be....