TaxTMI 
TaxTMI 
2022 (6) TMI 239
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....- may kindly be deleted. 2. The ld.CIT(A) erred on fact as well as on law to enhance assessment by Rs.5,75,250/- contrary to the provisions of section 44AD hence the same may kindly be deleted. 3. The ld.CIT(A) erred in law as well as on fact to initiate proceedings u/s.271(1)(c) hence the same may be directed to drop." 3. Brief facts of the case is that the assessee is an individual deriving income from small contract work as well as income from agriculture activities. The assessee has not filed regular return of income for the Asst.Year 2009-10. However, in response to the assessment proceedings under section 147 of Income Tax Act, 1961 ("the Act" for short) and in response to the notice under section 142(1) and 143(2) of the Act, assessee filed return of income on 27.7.2016 disclosing income of Rs.1,26,020/- from labour job work under section 44AD of the Act and bank interest of Rs.10,7065/- and agricultural income of Rs.1,18,707/-. 4. In the course of assessment proceedings, the ld.AO noticed that the assessee had shown opening capital balance of Rs.34,56,281/- during the year under consideration. The ld.AO also noticed that the assessee has made cash de....
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.... iii) Since under the above income earned by the assessee was below the taxable limit of Rs.1,60,000/- stipulated at the relevant point of time, the assessee was not liable and mandatory to file return, therefore, no return was filed for the earlier years. iv) So far as cash deposits of Rs.10.00 lakhs is concerned, it was submitted that the assessee has intended to make investment. Therefore, he withdrew an amount of Rs.2.50 lakhs and Rs.9.00 lakhs from the bank on 2.1.2008 and 4.1.2008 respectively and kept with the assessee. However, due to change of decision, the above cash was re-deposited in the bank. Therefore, the same was shown as cash deposits in the bank account, and to prove the same, assessee has filed bank statements during the assessment proceedings. v) So far as opening balance of capital account of Rs.34,56,281/- is concerned, it was explained that the same represented the investments made in earlier years, and not invested during the year under consideration, and therefore, the same could not be treated as income or investment made in the current year. The assessee has shown in a tabular form the break-up of the impugned amount of capital account....
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....5,72,250/- and expenditure towards labour charges and other expenses net profit was of Rs.1,26,020/-, which was offered under section 44AD of the Act and the same was accepted by the AO. When the assessee undertook the contract work, the labour payment and material purchases were to be met by the assessee, and this was being done from the opening balance available with the assessee. After completion of the contract work, the assessee received payment in instalments viz. Rs.3,00,000/-, Rs.2,50,000/- and Rs.2,50,000/- from contractee and the same was deposited in the Commercial Cooperative Bank on 19.1.2009, 30.1.2009 and 2.2.2009, and therefore, the same stand explained. The assessee also deposited an amount of Rs.2,00,000/- in Bank of Baroda on 11.7.2008 out of available cash balance of Rs.10,66,633/- as on 1.4.2008. Therefore, to that extent also, deposits made in the bank stand explained. ix) It was submitted that the AO has not disputed the investment made during earlier year or has proved that all such investments made during earlier is unexplained, therefore, addition of Rs.34,56,281/- of opening balance and Rs.10,10,000/- deposited with the bank should be deleted. ....
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.... of Rs.5,75,250/-, this amount was treated as unexplained cash credit under section 68 of the Act and directed the AO to enhance the assessment/income of the assessee for the Asst.Year 2009-10 by Rs.5,75,250/-. In sum, out of total addition of Rs.44,56,281/-, the ld.CIT(A) has deleted Rs.34,56,281/- representing opening capital balance and confirmed an addition of Rs.6,50,000/- under section 68 of the Act. He further directed the AO to enhance income/assessment of the assessee for the Asst.Year 2009-10 by Rs.5,75,250/- on account unexplained contract receipts. Against this order of the ld.CIT(A), the assessee is now before the Tribunal. 9. Before us, the ld.counsel for assessee's submissions are more or less on similar line as were made before the lower authorities, and copy of the submissions made before the CIT(A) is also placed on record in paper book from page no.1 to 6. Accordingly, based on these submissions, the ld.counsel for the assessee sought deletion of entire impugned additions. On the other hand, the ld.DR relied on the order of the ld.CIT(A) and submitted that the assessee has been given substantial relief by the appellate authority, and a part of the impugned add....