TaxTMI 
TaxTMI 
2025 (8) TMI 840
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....ived through the ITS database indicating that cash deposits aggregating to Rs. 16,69,608/- had been made in the assessee's ICICI Bank Account No. 091701502517 during the financial year 2011-12 relevant to the assessment year under consideration. On verification of departmental records, it was found that the assessee had not filed any return of income under section 139 for the said assessment year. To ascertain the genuineness of the transactions, the AO issued a letter dated 20.02.2019 under section 133(6) of the Act calling for information from the assessee. No reply was received. Another letter dated 27.02.2019 was also issued to the Manager, ICICI Bank Ltd., Bandra-Kurla Complex, Mumbai, calling for information under section 133(6). In response, ICICI Bank Ltd. furnished a copy of the bank statement of the assessee for the period from 01.04.2011 to 31.03.2012, reflecting cash deposits totalling Rs. 16,69,608/-. Thereafter, several notices were issued by the AO to the assessee for furnishing details and explanations in respect of the cash deposits. Consequently, the Assessing Officer (hereinafter "AO") issued notice under section 148 dated 25.03.2019, which was duly served on 26.....
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....pliance during Re-Assessment Proceedings u/s 147 was furnished. 2. The Ld. CIT(A) grossly erred in law and facts in upholding the addition of Rs. 16,69,608/- u/s 69A being cash deposited in ICICI Bank Account generated out of duly accounted business sales by ignoring the debit / withdrawal side of same bank account. 3. The Ld. CIT(A) grossly erred in law and facts in upholding the addition of Rs. 16,69,608/- u/s 69A being cash deposited in ICICI Bank Account generated out of accounted business sales which was duly reconciled with VAT returns furnished. 4. The Ld. CIT(A) grossly erred in law and facts in upholding the addition of Rs. 16,69,608/- u/s 69A being cash deposited in ICICI Bank Account without acknowledging that, as per section 44AD of the Income Tax Act 1961 for small scale Assessee having business turnover of less than Rs 40 Lakhs, at the max, only 8% profit is taxable on presumptive basis and not entire cash deposited of Rs. 16,69,608/-. 5. The Appellant reserves the right to add, alter, amend, or modify any of the grounds of appeal during the course of the appellate proceedings. 3.1 During the course of hearing before us, the lear....
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....be treated as unexplained money under section 69A. It was contended that once the turnover is accepted, and the assessee is eligible to be assessed under the presumptive scheme of section 44AD of the Act (as turnover was below Rs. 40 lakhs), only 8% of such gross receipts can be deemed to be taxable income. Therefore, taxing the entire cash deposit under section 69A was patently unjustified. 3.4 The AR placed copies of the profit and loss account, balance sheet, computation of income and all four quarterly VAT returns on record during the hearing, all of which were also part of the submissions filed before the CIT(A). The AR prayed that the addition sustained by the Ld. CIT(A) under section 69A be deleted in full. Alternatively, and without prejudice, it was submitted that if the source of cash deposits is accepted to be business turnover, the income, if any, ought to be computed under section 44AD by applying presumptive rate of 8% to the turnover of Rs. 22,54,232/-, which works out to Rs. 1,80,339/-, and the same being below taxable limit after deductions under Chapter VI-A, the return be treated as valid and nil demand be confirmed. 4. Per contra, the learned Departmental ....
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....led proposition of law that where the assessee has explained sufficient cause and the documents sought to be admitted go to the root of the matter, technical objections should not defeat substantive justice. We accordingly hold that the documents submitted by the assessee ought to have been admitted and considered on merits, and we proceed to do so in the interest of justice. 5.2 The addition made by the AO under section 69A was based solely on the fact that cash deposits of Rs. 16,69,608/- were made into the assessee's ICICI Bank account during the relevant financial year, and that the assessee failed to offer any explanation in response to the statutory notices. The AO did not conduct any independent enquiry or investigation to ascertain whether the said deposits were linked to any undisclosed source or whether they had any nexus with the assessee's declared business activity. The AO also did not refer to any material or third-party information which could disprove the assessee's claim of being engaged in business. 5.3 It is trite law that the deeming fiction under section 69A cannot be invoked mechanically or in terrorem. The provision requires the Assessing Officer to est....