TaxTMI 
TaxTMI 
2021 (7) TMI 9
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....38,91,055/- in the bank account during the financial year 2010-11. Since, the assessee had not filed his return of income and also no assessment u/s 143(3) of the Act has taken in the case of the assessee for the relevant assessment year, therefore, the AO reopened the assessment of the case of the assessee u/s 147 of the Act by recording reasons and after obtaining necessary approval from the competent authorities. Notice u/s 148 of the Act dated 31.03.2018 was issued and served on the assessee. In response to the notice, no reply was filed by the assessee. The AO, thereafter, issued notice u/s 142(1) of the Act. However, the same also remained uncompiled with. The AO, thereafter issued show cause notice to the assessee asking him to expla....
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....wal is the payment to the vendors and to the shopkeepers. It was argued that the AO during the course of assessment proceedings did not accept the contention of the assessee that the cash deposits in the saving bank account represent the cash sales and collection from the customers. It was accordingly requested for deletion of the addition. 7. However, the learned CIT(A) was not satisfied with the arguments advanced by the assessee. He held that the assessee could not substantiate before him that the cash deposits and withdrawals are on account of ongoing business activity, since, the assessee could not substantiate by any corroborating documents or evidence in the nature of sale bills, purchase bills and the ledger account of purchase o....
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....ct to assume jurisdiction u/s 147 of the Act and frame the impugned order u/s 147/143(3) of the Act. 1.4 That in absence of any valid approval obtained under section 151 of the Act, initiation of proceedings u/s 147 of the Act and assessment framed u/s 147/143(3) of the Act are invalid and deserve to be quashed as such. 2 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in confirming an addition of Rs. 38,93,368/- representing alleged unexplained cash deposits in the bank account of the appellant and brought to tax under section 69A of the Act. 2.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that assessee was engaged in the business....
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.... submitted that copy of purchase bills were submitted before the learned CIT(A). Referring to pages 106 to 109 of the paper book, the learned counsel for the assessee drew the attention of the Bench to the order passed u/s 143(3) of the Act dated 28th June, 2019 for AY 2012-13 by the same AO i.e Mr. D.S. Negi, ITO, Ward-46(4), wherein he has accepted the income based on section 44AD as per return of income filed at Rs. 1,70,800/-, which is 10.5% of the cash deposits of Rs. 16,12,224/-. He submitted that in the succeeding year also the case was reopened for cash deposit in the saving bank account. He submitted that the Department cannot have two different views and should be consistent in its approach and adopt the same criteria of assess....
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....t the assessee is engaged in the small business of sale and purchase of old dhoti used in polishing of furniture and paint. The assessee is not liable for any registration under VAT as the goods in which the assessee deals with fall under the exempted goods under the Act. Since, the income of the assessee is below the taxable limit, the assessee did not file return of income. It is also the submission of the learned counsel for the assessee that he has produced the necessary purchase and sale bills before the AO and the CIT(A) and in the subsequent year, the AO had passed the order u/s 147/143(3) of the Act determining the total income of the assessee at Rs. 1,70,800/- on the total cash deposits of Rs. 16,12,224/- which comes to 10.57%. ....
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.... in view of various documents filed in the paper book containing scanned copies of purchase and sale bills, I am of the considered opinion that the learned CIT(A) was not justified in sustaining the addition of Rs. 38,91,055/- made by the AO on account of cash deposits in the bank account. Since, the same AO in the subsequent assessment year has accepted the profit rate of 10.59% u/s 44AD of the Act, therefore, considering the totality of the facts of the case, I am of the considered opinion that adoption of net profit @ 11% on the total bank deposits of Rs. 38,91,055/- will meet the ends of the justice. I hold and direct accordingly. Grounds raised by the assessee are accordingly partly allowed. 14. In the result, the appeal filed by th....