TaxTMI 
TaxTMI 
2026 (7) TMI 290
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....r referred as "The Act"]. 2. The brief facts of the case are that the assessee had filed his return of income for A.Y. 2016-17 on 28.09.2016 declaring total income of Rs. 8,17,630/-. The AO had received an information that the assessee had received unexplained credits in the bank account maintained with M/s. Shri Renuka Multi State Urban Co-operative Credit Society Limited (in short "Renuka A/c") to the tune of Rs. 6,96,60,251/-, which was not disclosed in the books of account. Therefore, the case of the assessee was reopened by issue of notice u/s 148 of the Act on 31.07.2022 after passing an order u/s. 148A(d) of the Act. In response to notice u/s. 148 of the Act, the assessee had filed return declaring total income of Rs. 29,55,780/-.....
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....e Renuka Mata Multistate Urban Credit Co Operative Society as unexplained cash credit ignoring fact that such section is not applicable to these transactions. 5. Ld. NFAC ought to have considered fact that transactions of Rs. 6,94,15,390/- has been considered as sales by appellant and profit on sales has already offered in return of income and accordingly no addition has been warranted 6. Ld. NFAC erred in law and on facts in not granting credit of net profit declared by the appellant in return of income filed in response to notice u/s 148 of the Act 7. Without prejudice to the above and in alternative, if contention regarding sales and profit was not accepted then only peak balance ought to have been taxed. ....
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.... the Renuka bank account was identical with the regular business activity duly disclosed in the return of income. Explaining the reason for opening this account, the Ld. AR submitted that many of the customers of the assessee were based in the state of Maharashtra and for this purpose the assessee had opened an account with Shri Renuka Multi State Urban Co-operative Credit Society Limited. He further submitted that the net profit disclosed on the accounted turn-over of the assessee was 2.98% and by applying the same rate, the assessee had disclosed profit of Rs. 20,68,578/- on the turn-over of Rs. 6,94,15,390/- made through Renuka bank account. The Ld. AR submitted that only the profit element of the undisclosed turn-over of the assessee wa....
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....The assessee had disclosed only the bank account with HDFC in his balance sheet. Further, the total turn-over of Rs. 2,97,63,202/- disclosed in the ITR, all pertained to HDFC bank account only. Thus, neither the bank account of the assessee with Shri Renuka Multi State Urban Co-operative Credit Society Limited is found disclosed in the balance sheet nor the turn-over appearing in this bank account is found part of the turn-over reflected in the P&L account. In fact, the assessee had also admitted that the transactions made through the bank account of Shri Renuka Multi State Urban Co-operative Credit Society Limited were not accounted for and had disclosed additional profit of Rs. 20,68,578/- in the return filed in response to notice u/s. 14....
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....were made, had held that only profit element of the transactions are required to be taxed and profit of 8% was held as reasonable. In the case of Mehulkumar Ramabhai Chaudhari (supra) also, the profit in respect of credit entries in the bank account of Shri Renuka Multi State Urban Co-operative Credit Society Limited was upheld at the rate of 8%. Respectfully following the decision of the Coordinate bench of this Tribunal on the identical issue, the addition made by the AO is restricted to 8% of the credit entries appearing in the bank account of Shri Renuka Multi State Urban Co-operative Credit Society Limited, being the profit element involved in respect of the aforesaid deposits/credits of Rs. 6,75,91,673/- appearing in the said bank acc....