TaxTMI 
TaxTMI 
2026 (6) TMI 352
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.... (Appeals) [in short 'Ld. CIT(A)'] which in turn arises out of an assessment order passed by the Assessing Officer (in short 'AO') u/s. 147 r.w.s. 263 read with section 144B of the Act dated 19.03.2025. 2. The solitary grievance of the assessee in this appeal is that learned CIT(A) failed to properly consider and verify the detailed documentary evidences placed on record substantiating the source of cash deposit of Rs. 14,00,000/ -. 3. The facts of the case which can be stated quite shortly are as follows: During the assessment proceedings, on verification of records, it was noticed by the assessing officer that the assessee has filed return of income, declaring business income of Rs. 1,92,300/-, u/s. 44AD of the Act, ....
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....ssessee states that it is imperative to underscore that in conformity with legal definitions and provisions, the Karta of an HUF is unequivocally categorized as a Relative and therefore, pursuant to this classification, the Karta is duly authorized to effectuate cash transfers to the HUF. In support, the assessee has submitted copy of the cash book pertaining to Vishal Mahendrabhai Modi and Vishal Mahendrabhai Modi (HUF) for the month of April 2016, as Annexure- II, as an online submission dated 11/03/2024. 5. In response to the another notice of the Assessing Officer, the assessee submitted before the Assessing Officer, the following reply with documentary evidences, which is reproduced below: As delineated in the Notice, perta....
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....eration we have one bank account details of the same is as follows: Name of Bank: Axis Bank Account No: 915020036631422 Sir, copy of the bank statement of the said bank account and bank ledger account extract is enclosed herewith for your ready reference in Annexure - II 5. Sir, as directed by you, we are required to furnish copy of 26AS statement for the year and explain the corresponding income shown in ITR with supporting documentary evidence. In response to above, we would like to inform you that copy of 26AS statement for the year is enclosed herewith in Annexure - III. Sir, we would like to inform you that there was no income shown in the Form 26AS. Hence, the reconciliation of the corresponding income along with ITR....
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....endrabhai Modi and they have not been part of turnover. Cash flow summary statement is as follows: 8 Particulars Amount (Rs.) Opening Cash Balance as on 01/04/2016 1,45,119 Add: Received from Vishal M Modi (Karta of HUF) as on 20/04/2016 14,00,000 Add: Cash Withdraw from Bank Account during the year 56,58,652 Less: Paid to Vishal M Modi (Karta of HUF) as on 01/06/2016 (7,00,000) Less: Cash Deposited in Bank during the year (64,49,420) Closing Cash Balance as on 31/03/2017 54,351 9. Sir, as directed by you, it is seen that we have declared income u/s. 44AD of the Act. In this regard, we are requested to submit copies of Purchase & Sale Bills, Purchase & Sales Register, Cash Book,....
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....ed to effectuate cash transfers to the HUF. We hereby submitting copy of the cash book pertaining to Vishal Mahendrabhai Modi and Vishal Mahendrabhai Modi (HUF) for the month of April 2016, as Annexure - VII for your perusal and reference 6. However, the Assessing Officer rejected the above reply of the assessee and made the addition in the hands of the assessee to the tune of Rs. 14,00,000/- 7. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal, before the CIT(A) who has confirmed the action of the assessing officer, therefore, assessee is in further appeal before this Tribunal. 8. Learned Counsel for the assessee, submitted that the assessee's business was conducted on a credit basis and th....
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....s in the assessment 2017- 18, and it is allowed in accrual basis of accounting. Besides, the amount of Rs. 14,00,000/- is out of retail trading activities, which is received from customers by following accrual basis of accounting. 11. Therefore, I find that it is substantially correct in law, when the assessee is consistently following the mercantile/accrual system of accounting and the income had legally accrued during the relevant previous year. Under section 145 of the Act, income chargeable under the heads "Profits and gains of business or profession" and "Income from other sources" is computed according to either, mercantile system, or cash system, regularly employed by the assessee. Where the assessee follows the mercantile system,....