TaxTMI 
TaxTMI 
2022 (5) TMI 667
X X X X Extracts X X X X
X X X X Extracts X X X X
....red as not maintainable and was thus dismissed. The wife of the deceased assessee filed a Miscellaneous Application (MA) No. 07/JP/2021 dated 25.02.2021 stating that she had no information about the case and being the house wife she was not acquainted with the legal obligations for bringing on record the authorized representative, therefore in absence of any authorized representative, the appeal was dismissed on 12.10.2020. The said MA was considered vide order dated 19.04.2021 giving the assessee to chance to file the corrected Form 36 within 30 days. The registry informed that the assessee has complied the direction and thus the appeal is heard on merits. 4. In this appeal the assessee has raised following grounds; "1. That the learned Appellate Authority was wrongly confirmed the amount of addition of Rs. 466563/- towards cash deposit in Bank A/c of Assessee, out of normal transaction of business trade. All of Amounts of Rs. 466563/ relates to old debtors realizations of opening debtors as on date 01/04/2008, Cash Deposits by own cash and advances received by debtors. 2. That while filling return claimed rebate u/s 80C of Rs. 55,000/- out of which receipts o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red. Thus, the assessee was issued by the final show cause notice by the AO which is extracted here in below : "3.1 Cash deposits in Rs.11,79,315/ During the year under consideration, the assessee had deposited cash of Rs. 11,79,315/- in his Savings Bank account No. 61043846380 maintained with SBBJ, Durgapura Jaipur. The assessee, vide note sheet entry dated 23-09-2016, was asked to explain/furnish the following information on 30-09-2016: "(i) Nature of business of assessee and sources of income. (ii) Please furnish details of purchase/sale. From where the assesee purchases and where does he sell the same. (iii) Please explain the sources of cash deposits amounting to Rs.1179315/-in SBBJ Durgapura account and also in SBI account, Bajaj Nagar. Does the assessee deposits its sale proceeds in bank account, if yes where does he deposits. (iv) It is noticed that total turnover of assesee is Rs.6.85 lacs while the cash deposit is more than Rs. 12 lacs both accounts. (v) Please explain. Evidences of deduction under chapter VIA." 8. The assessing officer observed that on the hearing date (i.e. 30-09-2016) neither anyone attended nor ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Durgapura and SBI Bajaj Nagar only. However, on going through the bank account statement of SBBJ, Durgapura, it is seen that cash has been deposited from out of Jaipur such as Aspur, Sagwana, Alwar, Bharatpur, Phulera, and many other places. It leads to the conclusion that such cash deposit is not sale proceeds and excess cash at hand. You are therefore, requested to explain as to why such cash deposits should not be treated as undisclosed/unexplained income of the previous year 2008-09." 10. Against the above final show cause notice the ld. A/R of the assessee Sh. Anand Agarwal filed his written submission which is reproduced as under: "the assessee sales dyes and chemicals shop at Sanganer, the goods handed to the buyer at shop, than the buyers carry the goods by himself to their destinations wherever, and it is not in control of the assessee. Sometimes regular and known buyers have shortage of funds, so they deposit the required payment from there place of destination. As the payments deposited by the buyers from out f Jaipur not by the assessee, it is self proved that all the bank transactions are only of trading business Shree Veer Dye Chem, as stated earlier that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ra is unexplained income of the assessee and the assessee has failed to explain the sources of the same by submitting factually incorrect submissions. Therefore, entire cash deposits of Rs. 11,79,315/- is held as unexplained income of the assessee for the period under consideration and is added in the total income of the assessee. 14. Aggrieved from the said order of the assessing officer, the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) has partly allowed the appeal of the assessee and his finding is as appearing in para 4,3 which reads as under; "4.3 I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen that in this case, return of income was filed by the appellant u/s 44AD declaring income of Rs. 1,63,490/- u/s 44AD. After claiming deduction under Chapter VI-A, total income was shown at Rs. 1,32,150/-. There were total cash deposits of Rs. 11,79,315/- in the bank account maintained with SBBJ, Durgapura, Jaipur. The total turnover declared by the appellant was Rs. 6,85,340/- on which VAT @4% (Rs. 27,412) was also claimed to have been collected. Thus, the total amount claimed t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....45 (Raj. HC) was held that Section 263 read with section 69 of the Income tax Act, 1961- Revision - Of orders prejudicial to interest of revenue - Assessment year 1993-94 - Subsequent to completion of assessment under section 143(3)/148 by Assessing Officer, Commissioner invoked section 263 and held that opening balance in assessee's capital account as on 1-4-1992 represented assessee's income from undisclosed sources and was liable to tax in assessment year 1993-94 in absence of any proof regarding its accommodation in earlier years - Tribunal that genuineness of said amount had already been adjudicated upon by assessing authority for appropriate financial year relevant to assessment year 1992-93 Tribunal quashed order of Commissioner passed under section 263 Whether there was any illegality in Tribunal's order - Held, no. The authorities below also rightly did not disbelieve the availability of the opening balance of trade debtors of Rs. 8,34,211/-. Therefore, the very fact of making recovery/realization there from of a lessor amount of Rs. 3,68,563/- could and should not have been doubted, particularly when the authorities below did not make any inquiry and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Y 2008-09, Rs. 1,63,490/ in AY 2009-10 and has been consistently earning good amount of profit in past years which has certainly resulted into a savings in hand even after incurring all his household expenses. Hence, he must have saved much more then this meagre amount of Rs. 73,200/- in as much as even assuming net saving per year of Rs.50,000/-, for 5 years it will come to Rs. 2.50 Lakh. The assesse is in the habit of keeping majority of the cash in bank and withdraw the same as per his requirements. The same practise he continued in AY 2009-10 also where he deposited in bank the excess cash left over after incurring all the required expenses. Hence keeping in mind the aspect of human probability and surrounding circumstances, no addition was unwarranted on this account. 1.5 Supporting case law: 1.5.1 In case of RacmannSprings (P.) Ltd. Vs. DCIT [1995] 55 ITD 159 (Delhi ITAT) were it was held that: "Section 68 of the Income-tax Act, 1961- Cash credits Assessment year 1981-82 - Assessee filed return showing loss for current year as well as brought-forward losses - Original assessment was made on 8-10-1984, but on remand, fresh assessment was made on 13-1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... - Whether once under special provision of section 44AD, exemption from maintenance of books of account has been provided and presumptive tax at rate of 8 per cent of gross receipt itself is basis for determining taxable income, assessee is not under any obligation to explain individual entry of cash deposit in bank unless such entry has no nexus with gross receipts - Held, yes* 2.2. Nandlal Popli Vs DCIT (2016) 71 Taxman.com 246 (Chandigarh Trib.) where it was held that: "Where profit declared by assessee under presumptive taxation as provided under section 44AD was accepted, Assessing Officer could not make separate addition by invoking provisions of section 69C" 2.3. ITO Ward 6(2) vs. Devi Singh Solanki [2006] 154 Taxman 155 (JP)(DPB_) where it was held that "Section 44AD, read with section 69, of the Income-tax Act, 1961 Civil construction business Assessment year 1995-96 Assessing Officer though assessed business income of assessee, a civil contractor, by applying section 44AD, yet at same time made addition under section 69 alleging that source of investments made in acquisition of assets/shown in balance sheet was not explained - Commissioner (Appeals) held....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tries, Hyderabad vs. ITO, Ward 5(1), Hyderabad in ITA No. 264/Hyd/2011 dated 13.11.2013 (Hyderabad) * ITO, Ward-25(1), New Delhi vs. Shri Varun Kumar Saboo, Delhi in ITA No. 5588/Del/2011 dated 10.05.2013 (Delhi) * Kapil Dey, Kolkata vs. ITO, Ward-49(2), Kolkata in ITA No. 854,855 & 856/Kol/2010 dated 25.11.2011 (Kolk.) * Commissioner of Income-tax-II vs. Surinder Pal Anand in ITA No. 156 of 2010 dated 29.06.2010 (Chand.) * Nand La Popli vs. DCIT, Central Circle-II, Chandigarh in ITA Nos. 1161 & 1162 (CHD.) of 2013 dated 14.06.2016(Chand.) 19. Per contra the ld. DR heavily relied on the findings of the AO and stated that the assessee has not filed the return originally and has filed only on issue of notice u/s. 148 of the Act. He does the business in Jaipur and cash is deposited from various other branches or stations so the action of the AO is correct. There is no proof of cash received for old debtor realisation on submitted the entries in chart and thus relied upon the finding of the CIT(A). 20. Now, to meet the end of justice, we confine ourselves to core of the controversy for the following amount not considered by the ld. CIT(A) and o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t." We considered the contentions of the both the parties, considered the decision cited and relied upon and based on information and analyses of facts supported by evidence and argument we feel that the ld. CIT(A) has erred in not granting the relief to the assessee fully. Thus, based on the above discussion the ground no. 1 raised by the assessee is allowed. 21. The ground no. 2 raised by the assessee is that while filling the return of income he has claimed rebate under section 80C for an amount of Rs. 55,000/- out of which receipts of Rs. 32,653 submitted but while finalizing the assessment the same was not allowed. Even the ld. CIT(A) has dismissed this ground on technical issued and not decided on merits. The relevant observation of observed ld. CIT(A) is as under : "I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen that disallowance was made by the AO as no documentary evidences in support of the claim made by the appellant under Chapter VI-A was filed. During the course of appellate proceedings, the appellant has not filed any application for admission of additional evidences under Rul....