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2025 (7) TMI 1660
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....terconnected having the same assessment year and of the same assessee. 2.1 The grounds of appeal taken by the assessee in ITA No. 957/JP/2024 for A.Y 2013-14 are as under; "1. The Ld. CIT(A), NFAC, has erred on facts and in law in ignoring the business activities of the assessee. The assessee is engaged in business activities in brokering and artiya of fruits, particularly fresh graphs on sale on approval, and keeping a fixed margin of 1% on the purchase of said transactions. Considering trading activities, the Ld CIT(A), NFAC, quantified a profit of Rs. 15,40,450/- at 8% on Rs. 1,92,55,660/- under Section 44AD of the Income Tax Act of 1961, in contrast to brokerage receipts of Rs. 1,91,000/-. 2.2 Whereas the grounds appeal raised by the revenue in appeal No. 929/JP/2024 for assessment year 2013-14 reads as follows: "(1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of cash deposits of Rs. 1,65,71,200/- and other deposits of Rs. 26,84,360/- (out of total addition of Rs. 3,29,51,200/-) made by the AO on account of unexplained money u/s 69A of the Act as the assessee could not explain nature and source of such am....
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....se to notice u/s 148 of the IT Act, 1961 issued. The case was transferred to Faceless Assessment Unit through NeFAC on 08.12.2021. Again notices u/s 142(1) of the IT Act, 1961 were issued on 16.11.2021 and 01.02.2022 asking assessee to submit details/documentary evidence for sources of such cash deposit. The assessee has not filed any submissions in response to notice u/s. 148 and notices u/s 142(1) of the Act, so issued. The assessee was given ample opportunities during the scrutiny proceedings but failed to furnish any explanation along with documentary evidence regarding the sources of deposits to the bank account. Therefore, the Assessing Officer was constrained to pass the assessment order u/s 144 of the Act based on the information available on records. Record reveals that the assessee has deposited cash in bank account maintained with HDFC Bank Ltd., to the tune of Rs. 3,29,51,200/- during FY 2012-13 relevant to AY 2013-14. The assessee was asked to furnish explanation and documentary evidence in respect of sources of such cash deposit. The assessee has not filed any reply. In the absence of a reply, the deposit amount of Rs. 3.29,51,200/- was treated as unexplained money u....
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....awkers. The sale consideration so received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers. 2. During the relevant assessment year, the assessee's income was below the basic taxable income. The assessee has not reviewed the other provision of the Income Tax Act and has his own limited verse that he has not an income above the basic limit. Therefore, he has not filed a return of income for the year. 3. The LD assessing officer, based on the information available through Actionable Information Monitoring Systems (AIMS), that during the year under consideration, the assessee has deposited cash of Rs 32,951,200/- in his bank accounts maintained in HDFC Bank. which remained unexplained. besides, the assessee neither filing his return of income nor making compliance to the letter issued by the JAO, as per the assessment order... Page .. 01 4. Therefore, the LD Assessing Officer issued notice U/s 148 of the Income Tax Act 1961 on dated 30/03/2021 and after that issued notices U/s 142(1) of the Income Tax Act 1961. The issued notices were not served/recei....
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....d not Rs 32951200/- as alleged by the AO and even aggregate deposits, i.e., cash and others, are only Rs 19255560/-, which is also far below the alleged amount of Rs 32951200/- Bank Account No. Cash Deposits Other Deposits Total HDFC 9872320000399 11,471,200.00 2,173,360.00 13,644,560.00 HDFC 9872000001902 5,100,000.00 511,000.00 5,611,000.00 16,571,200.00 2,684,360.00 19,255,560.00 9.3 Thus, it is very clear that before recording the reason for reopening the assessment, the OA did not gather bank statements and merely proceeded on the basis of information available through AIMS. The very basis for reopening of assessment, i.e., cash deposit of Rs 32951200/-, is wrong; therefore, the reopening based on this cannot stand at all. (PB ... Order Pg 4) 9.4 The AO simply based on the information through AIMS passed an order, and the AO did not carry out the proper procedure. There is no independent application of mind on the part of the assessing officer while recording the reasons for reopening; merely placing a figure provided by AIMS for recording reasons is impermissible. (PB ... Order Pg 5) 9.5 The Assessee in view of none of the notices being....
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....cordance with section 44AD of the IT Act. For the purpose of quantifying the total turnover, the AO is directed to verify the Bank Accounts referred by the appellant in his return submissions. Ground No.: 1 (Department) On the facts and in the circumstances of the case and in law, the ld CIT(A) has erred in deleting the addition of cash deposit of Rs 1,65,71,200/- and other deposits of Rs 26,84,360/-( out of total addition of Rs 3,29,51,200/-) made by the AO on account of unexplained money u/s 69A of the Act as the assessee could not explain nature and source of such amount in absence of return of income for the year under consideration. AO Page 2 of 3 CIT(A) Page 11-13, Findings at para 7.1 and 7.2 of the order Facts:- 1. The Assessee is an individual. The Assessee was engaged in the business of trading fruits, more particularly fresh grapes. The grapes are highly perishable in nature and weather sensitive; the transportation causes deterioration in quality. Therefore, in normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank a....
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....ble Information Monitoring Systems (AIMS) only, and he did not make any independent inquiries from the bank that the information has been received in a correct manner or not. Besides the fact, the assessee had not deposited such amount as the AO order in the bank account. On the facts, the A O has not followed the procedure required to be followed to make the assessment and merely to create demand made huge amounts added in the pass order . This is shown with the facts of the case that the addition made by the AO is bad in law. In view of the above, the CIT(A) has rightly deleted the addition made by the AO, and thus the ground of the department be dismissed. Ground No.: 2 (Department) On the facts and in the circumstances of the case and in law, the Ld CIT(A) has not justified in restricting the profit at the rate 8% of the total amount of cash deposits and credit entries in his bank account amounting to Rs 1,92,55,560/- as the business of the assessee has not been established. CIT(A) Page 12-13, Findings at para 8.1 of the order Facts:- 1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes ar....
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....arisen. This is because the assessors, after the lapse of 10 years of the relevant year, had done their best effort and had collected their business transaction records and submitted that he was engaged in the business activities as stated. In view of the above, the CIT(A) has rightly accepted that the assessee was engaged in the business activities, and thus the ground of the department be dismissed. Ground No.: 3 (Department) On the facts and in the circumstances of the case and in law, the Ld CIT(A) has not justified in treating the eligible business u/s 44AD of the Act at the rate of 8% of the quantified turnover of Rs 1,92,55,560/- which exceeded prescribed limit u/s 44AB of the Act and the assessee failed to get his accounts audited and no return of income has been filed for the year under consideration. Facts 1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality. 2. In the normal business practices, grapes were received from farmers on an approval basis, and the goods they received were ....
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....e circumstances of the case and in law, the Ld CIT(A) has erred in ignoring the facts that the assessee produced agreements of farmers which were notarised 10 years later and did not produce any bills and vouchers to prove sale or purchase. Hence, the receipts of Rs 19255560/- constitute undisclosed income form undisclosed sources u/s 69A of the Act,1961 Facts:- 1. The assessee was engaged in the business of trading fruits, more particularly fresh grapes in the year relevant, and the grapes are highly perishable in nature and weather sensitive; transportation causes deterioration in quality. 2. In the normal business practices, grapes were received from farmers on an approval basis, and the goods they received were sold to vendors and hawkers. The sale consideration received was deposited in bank accounts after keeping a fixed margin of 01% of the sale consideration; the balance amount was paid through account pay cheques or drafts to the farmers. 3. The Assessee is submitted before the ld CIT(A), details of goods received from the farmers as he was maintaining a purchased ledger in his books of accounts (PB- Deppt-pages 47-49) "Annexure 5" (... refer to Page No. 13 of 14 o....
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....under section 69A of the IT Act, that section 69A is not maintainable. Further reliance is Placed on the following cases..... 1. Smt. Teena Bethala Vs Income Tax Officer, Ward - 4(3)(2), Bengaluru. ITA Nos.1383 and 1384/Bang/2019, dated 28.08.2019 2. Smt. Gangambike, Vs The Income-tax Officer, Ward - 3[2][3], Bangalore. ITA No.2598/Bang/2018,, 07.12.2018 3. Dy Commissioner of Income Tax Act Vs Kartihik Contruction Co. Mumbai... ITA no.2292/Mum/2016... 23.02.2018 6. The Ld CIT(A) deleted the addition by giving the following findings:- (Page No 12, Para No 7.1 and 7.2 of the order) :- "7.1 Upon perusal of the written submission, Ledger account, Bank Account statements, it is evident that treating a sum of Rs. 3,29,51,200/- as unexplained money u/s 69A of the IT Act is not maintainable. The appellant submitted the bank account statement. Upon perusal of the bank account copy, it is seen that it had both credits and debits. All the debit entries were through RTGS to various persons. The appellant maintained two bank accounts in HDFC and the total cash deposits were only Rs. 1,65,71,200/- and the total credits were Rs. 1,92,65,560/-. If so, from where the AO detected cash de....
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....channels only. The Assessee also submitted copies of ledger accounts of farmers, which were maintained in books of accounts before the CIT(A) via Annexure 6 with the submission. 5. The Assessee also submitted that he had closed their business activities. Therefore, he is not in contact with many farmers, as almost 10 years have lapsed from the goods being received on an approval basis and were sold, year under relevant. 6. However, The Assessee tried hard to contact them and could get confirmatory affidavits from a few farmers regarding fruits given on approval by them, and copies of confirmatory affidavits along with agricultural revenue records of such farmers were furnished at Annexures 7 to 14 before the CIT(A). 7. In the affidavits filed by the farmers, it was confirmed that they have given fruit on an approved basis with a fixed margin of 01% of the sale consideration. SUBMISSION 1. The Assessee is engaged in the business of trading fruits, particularly fresh grapes. The grapes are highly perishable in nature and weather sensitive; the transportation causes deterioration in quality, and he received goods from the farmers on an approval basis and sold such fruits on ....
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.... 82-90 8.7 Vilas Dhondiram Jadav 91-97 8.8 Somnath Kishanrao Padol 98-108 8. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the finding of the ld. CIT(A) while estimating the profit has not seen the nature of business and as regards the appeal of the revenue he submitted that the ld. CIT(A) has considered all the evidence placed before him and therefore, there is no merits in the appeal of the revenue. Even the revised limit of filling the appeal by the revenue is raised to Rs. 60 lac and in the present appeal the tax effect is 56,49,070/- the same is also required to be dismissed as withdrawn based on the CBDT Circular No. 09/2024 dated 17.09.2024. 9. On the other hand, ld. DR supported the order of the ld. AO and submitted that the assessee was given many opportunities but failed to support the source of cash deposited. As regards the appeal of the assessee she submitted that there is no reasoning or supporting evidence to support the contention that the assessee is earning only 1 % as income. Ld. DR also filed the following evidence in support of the contentions so raised ; Sr. No Description Page Nos. 1. Brie....
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....led for vide letter dated 26.12.2023 and the reminder was given on 09.01.2024, 23.01.2024, 21.02.2024, 06.03.2024 and 18.03.2024. Vide letter dated 01.04.2024 the ld. AO sought time for 15 days which was also granted however ld. CIT(A) did not received it by 30.04.2024 and ultimately order was passed on 15.05.2024 considering the additional evidence placed on record. Thus, the ld. CIT(A) has duly considered the submission of the assessee and taken a view that whole credit cannot be considered as income of the assessee for an amount of Rs. 1,92,55,560/- and thereby considering the nature of the business conducted by the assessee ordered to considered the income @ 8 % on the turnover. Thus, the finding of the ld. CIT(A) is in appreciation of the additional evidence placed on record and ld. AO did not comment on that record in the remand proceeding and the proceeding carried out before this tribunal placing on record any contrary material and therefore, we do not find any merits in the grounds raised by the revenue and therefore ground no. 1 to 4 raised by the revenue stands dismissed. Based on these observations appeal filed by the revenue in ITA no. 929/JP/2024 is dismissed. 11. N....