AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 742
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....t prejudice, CIT(A) has erred in not granting benefit of telescoping or peak credit theory. 4. The learned CIT(A) has erred both in law and on the facts of the case in dismissing ground relating to initiation of penalty u/s. 271B of the Act as infructuous. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. The learned C1T(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s.234A/B/C of the Act. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld. AO in initiating penalty u/s.271(l)(c) of the Act. 8. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. Total tax effect Rs.14,20,521/- ....
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....ssee that he received loan of Rs. 12,50,700/- from various depositors (65 in number and all the deposits were less than Rs. 20,000/-) and for which he has filed confirmation letters and copies of identity proof, the Ld. Assessing Officer rejected the assessee's submission on the ground that the assessee has not submitted bank account, copy of return of the said depositors and held that these loans are bogus loans and creditworthiness of depositors along the genuineness of the transactions are not proved. The AO also rejected the claim of the assessee regarding use of cash withdrawal for subsequent cash deposit and made total addition under section 68 of the Act amounting to Rs. 63,58,700/- being the total amount of cash deposits made in the bank account held by the assessee. 5. In appeal, Ld. CIT(Appeals) give partial relief to the assessee and restricted addition under section 44AD of the Act to Rs. 37,07,260/- (Rs. 40,40,890/- less Rs. 3, 33,630/- offered as income under section 44AD in the return of income) and also accepted the assessee's contention that cash withdrawals from bank for Rs. 12,90,000/- were used for making cash deposit. Accordingly, the Ld. CIT(Appeals) restrict....
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....he assessee has declared job work receipts of Rs. 49,54,738/- and offered taxable income of Rs. 3,33,630/- on presumptive basis under section 44AD of the Act. The assessee has been consistently following the above practice in the previous two assessment years as well. During the course of assessment, we note that the Ld. Assessing Officer has not challenged the veracity of the above figures declared in the return of income and has not disturbed the above figure of total receipts declared by the assessee from job work activity while concluding the assessment. However, for the purpose of making addition under section 68 of the Act, the Ld. Assessing Officer has held that the assessee has not been able to prove that he is actually carrying out job work activity since details of persons to whom services are provided and other details etc. have not been satisfactorily explained. 7.1 In the case of Dinesh kumar Verma v. ITO (ITA NO. 1183/MUM/2019 A.Y.2014-15), the Mumbai ITAT has held that the provisions of section 68 cannot be invoked where the assessee has filed return of income under the provisions of section 44AD of the Act without maintaining books of account. The ITAT made the fol....
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.... Court held that the pass book supplied by the bank to the assessee cannot be regarded as the books of the assessee. [Para 16] 7.3 In the case of Mehul V. Vyas v. ITO [2017] 80 taxmann.com 311 (Mumbai - Trib.), ITAT held that where assessee was not maintaining any account books, bank statement could not be construed to be a books of account maintained by her; merely on basis of information that assessee made a 'cash deposit' in her saving bank account, no addition could be made as unexplained cash credit. 7.4 The Co-ordinate Bench of the Tribunal in the case of Shri Kokarre Prabhakara vs. ITO ITA 1239/Bang/2019, held that where the returns are filed on the basis of income declared under section 44AD of the Act, there cannot be any application of section 68 of the Act. 7.5 The Cochin ITAT in the case of Thomas Eapen v ITO [2020] 113 taxmann.com 268 (Cochin - Trib.) held that where assessee, a small trader in medicine falling under section 44AD, offered income on presumptive taxation basis, provision of section 69A could not be applied to make addition in respect of undisclosed cash credits found in assessee's bank account. 7.6 The Chandigarh Tribunal in the case of N....
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.... year, does not fall within the ambit of section 68 of the Act. 8. In view of the above rulings as applied to the assessee's set of facts, we are of the considered view that once the Ld. Assessing Officer has accepted the assessee's figure of receipts from job work declared in the return of income on the basis of which return has been filed by the assessee on presumptive basis under section 44AD of the Act, then the Ld. Assessing Officer is precluded from making separate additions u/s 68 of the Act to the returned income on the basis that the assessee has not been able to prove the fact of carrying out job work activity in absence of adequate supporting documents etc. without disturbing the figure declared by the assessee offered as job work receipts. Further, as regards cash deposits of Rs. 12,57,700/- the assessee has filed confirmations along with identity proofs of lenders and the same has not been disputed by the assessing officer (refer page 4 of the assessment order). Accordingly, considering the fact that deposits by each of the individual lenders were less than Rs. 20,000 coupled with the fact that the assessee has been able to establish their identity, we are of the view....