AI Drafter 
TaxTMI 
TaxTMI 
2025 (2) TMI 539
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....ing addition of Rs. 78,00,000/-under section 68 of the Act which completely arbitrary, unjustified, uncalled for and bad in law. 2. That the Ld/-CIT(A) has erred in law and facts of the case in disregarding the submission furnished by the appellant during the course of appellate proceedings which is unjustified and bad in law. 3. That the Ld/-CIT(A) has erred in law and facts of the case by making adhoc addition of Rs. 2,25,174/-being 8% of Rs. 28, 14,676/-which is highly arbitrary, unjustified and bad in law. 4. That the Ld/-CIT(A) has erred in facts of the case by treating the amount of Rs. 78,00,000/- as cash credit under section 68 of the Act, however the same was trade advance given by the appellant in ordina....
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....suppressed sale. 6. Now the further aggrieved assessee is in appeal before us. 7. Before us the ld counsel of the assessee submitted that the assessee is engaged in the business of vegetables and does not maintain any books of accounts. The ld AR of the assessee further submitted that the case is of limited scrutiny and provisions of section 144 of the Act are not applicable in his case. The ld AR reiterated that funds advanced to TAHA Traders of Rs 78,00,000/- was on account of purchases from T.A.H.A. Traders for past and future years. The ld AR argued that as per law under 44AD, the assessee is not required to maintain books of account and therefore the AO/CIT(A) reliance on balance sheet and profit and loss account of the assessee ....
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.... the assessee's bank account maintained with Punjab National Bank, Ghaziabad. The assessee claimed before the AO/CIT(A) that out of Rs 1.58 crore, the cash deposit amounting to Rs 52,80,325/- represents sales. Other cash deposit is daily cash in hand, business deposit which is a requirement of liquidity at shop and sale proceeds of its agricultural produce from his own farm. The assessee has further claimed that part of the cash deposit belonged to the assessee's late father Satanand Gupta who himself had a turnover of over Rs 62 lakh during AY 2014-15 and was operating the assessee bank account for making payments to his creditors/party before he expired in 2016. With regard to advance of Rs 78,00,000/- made to T.A.H.A. Traders, the assess....
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....dit in the books. Since the mandatory requirement of section 68 remains uncomplied with, therefore the addition u/s 68 is bad in law. 15. We find that the legal argument on non-applicability of section 68 as the cash credits are not credited in the "books" of the assessee is fallacious for the reason that the assessee himself acknowledged the existence of the 'cash book' when he produced the 'cash book' before the AO to explain the source of cash deposits in bank as discussed above in para 12. The assessee also had prepared 'balance sheet and profit and loss account', as recorded in para 5 of the assessment order to show gross purchase and current assets, loan and advances. We are of the considered view that though the provision of secti....
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....e his capital cash savings can at best be considered at Rs 6,22,725/. The assessee has stated that his father late Satanand Gupta had a sale of Rs 62.37 lakh and a profit of Rs 4,98,960/- in the AY 2014-15 and that his father sometimes used the bank account of the assessee. We find that the assessee has given an explanation, but to consider the same as source of cash deposit in assessee's bank account can not be held as satisfactory explanation as the same is without any support of any cogent documents/evidence. The assessee has claimed that sufficient time was not provided by the AO. We however, find that the CIT(A) gave adequate opportunity to the assessee to offer evidence regarding cash deposit of Rs 78,00,000/- just before transferring....
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....,00,000/- as unexplained credit under 68. The AO further treated the balance cash deposit of Rs 28,14,676/- [Rs 1,58,95,000/- - (Rs 78,00,000/- + Rs 52,80,325/-)] as part of turnover and levied a presumptive tax @ 8% of Rs 2,25,676/-. 19. We find from the balance sheet of the assessee that the assessee had a capital of Rs 6,22,725/-, liability of Rs 1,76,226/- and current assets of Rs 7,98,951/- with him as on 31.03.2014. We may, taking a considerate view, accept that the assessee's father had used the assessee bank account. We also note that the assessee's father had a turnover ranging from Rs 51 lakh in FY 2011-12 to Rs 62 lakh in FY 2013- 14, therefore it may be plausible that some portion of cash belonging to the father may have been....