TaxTMI 
TaxTMI 
2022 (6) TMI 895
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...."1. The learned CIT(A) has erred in law and on facts of the case in making disallowance of Rs.5,98,100/- u/s 68 of the Act in the total income of the Appellant. 2. The learned CIT(A) has erred in law and on facts in not properly appreciating and considering various submissions, evidences and supporting documents placed on record during the course of the proceedings and not properly appreciating various facts and law in its proper perspective. 3. Your appellant craves leave to add, alter, amend, and/or delete any grounds as mentioned above during the course of appeal hearing." 3. The brief facts of the case are that the assessee is engaged in the business of diamond trading during the AY 2009-10 and he is working with ma....
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....e appellant. The grounds no. 4 to 6 are relating to dition made by AO of Rs.23,92,400/- u/s. 68 of the Act. The appellant has submitted as under: "5.During the year appellant had ' withdrawn cash amounting to Rs 23,69,098/- but ITO has erred in making disallowance of the same as Appellant has also deposited the cash amounting to Rs 24,32,4007- as per attached ledger of contra entries in appellant's books of account for your reference. Whereas appellant operates in such market in which appellant has to pay to suppliers in cash and received amount from customer in cash because the laborers who polishes diamond, they are very unorganized and they don't have their sales tax number and even pan number. Due to which appellant....
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....the appellant, being individual unorganized jeweller, has to be kept in mind as the same would determine the allowability of any expenditure or otherwise. Thereof is no question raised on the sales of the appellant which have been considered while computing taxable income. Therefore, it is fairly presumed that appellant's sales are not under question. As a corollary to it, it is concluded that whole of the sales are accounted in the books of accounts whereas commensurate part purchases to the extent of Rs.19,12,402/- are not above board. I find that a similar case has been handled by jurisdictional ITAT and the undersigned like to take guidance from its ratio. In the case of M/s. Vijay Proteins Ltd. Vs. ACIT 58 ITD 428, Hon'ble ITAT....
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....total Rs.23,92,400/-. The ground no. 4 to 6 are partly allowed. 5. Before us, none appeared on behalf of the assessee. We note from the above facts that the assessee is working in the unorganized sector where most of trading is carried out in cash. During the year under consideration, we note from the assessment order, that while the assessee has deposited a sum of Rs. 23,93,400/- in cash in his bank accounts held with ICICI Banks (two accounts), but the assessee has also during the year under consideration withdrawn a sum of Rs. 23, 69,098/- from his bank account. It has been held in a number of ITAT decisions that unless the Assessing Officer brings any material on record to show that the cash withdrawn was utilized / used for other pu....
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....g to show that the said amount was utilized by the assessee for some other purpose. In the case of ITO v. Deepali Sehgal I.T.A .No.- 5660/Del/2012 it was held that merely because there was a time gap between withdrawal of cash and its further deposit to the bank account, the amount can not be treated as income from undisclosed sources u/s 69 of the Act in the hands of the assessee. In the case of ITO v. Shri Rajeev Kumar Gupta ITA No. 273/Agra/2013, the ITAT held that held that the entire amount of deposit made in the bank account cannot be said to be unexplained because after deposit of the cash amounts, there are withdrawals. In the case of Smt. Satya Bhama Bindal v. ITO ITA No.713/Chd/2012, ITAT held that that the concept of peak theory ....
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..... (supra), the AO disallowed 25% of the bogus purchase, which has been reduced to 5% at the level of ITAT. This decision of the ITAT was challenged before the Hon'ble Gujarat High Court, the Hon'ble Court did not interfere in the finding of the Tribunal. Similarly, in the case of Mayank Diamonds (P.) Ltd. (supra), GP rate of 5% was taken by the Tribunal, which has been upheld by the Hon'ble High Court. In the case of Kulubi Steel (supra), the Tribunal has again restricted the addition at 12.5%. In all these cases, Vijay Proteins Ltd. (supra) has been considered. A perusal of the decisions would reveal that major factor which weighed with the ITAT as well as Hon'ble High Court was estimation of profit in a particular transact....