2018 (11) TMI 471 - AT - Income Tax

Acceptance of book result - unexplained cash deposits - Held that - A.O. in his remand report, acknowledged, that all details regarding cash deposits has been produced along with complete books of accounts and other supporting details. A.O. in remand proceedings, was satisfied of assessee having maintained its books of account, which has been examined by Ld. AO. Thus it is on these premises that Ld. CIT (A) held that section-145 (3) could not have been invoked. We are in agreement with the findings of Ld.CIT(A). On perusal of remand report admittedly Ld.A.O. is accepting the books of accounts filed by assessee. It is also been submitted that all details regarding the amounts have been verified and is also reflected. Thus we do not find any reason to deviate from observations of Ld. CIT (A). - decided against revenue. Addition of cash credits made in hands of assessee - Held that - CIT(A) categorically observed that A.O. verified additional evidences filed by assessee and has gone through complete books of accounts and other relevant supporting details on this issue. It has also been recorded by Ld. AO in remand report, that these details reveals that assessee has received amount from some parties in cash, and which is reflected in books of accounts. He thus does not question/doubt genuineness of the deposits as it has been considered to be in the due course of discharging his obligations in carrying out business. Under such circumstances we do not find it appropriate to uphold addition made by Ld. AO. Ld.A.O. in turn is accepting the details filed by assessee and therefore we uphold the decision of Ld. CIT (A).- decided against revenue.

Summary

Issues Involved:
1. Acceptance of book results by CIT(A)
2. Deletion of cash credits in the bank account by CIT(A)

Analysis:

Issue 1: Acceptance of book results by CIT(A)
The case involved an appeal by the revenue against the order passed by the Ld.CIT(A) granting relief on various grounds. The revenue contended that the books of accounts were not complete and correct, leading to erroneous relief granted by the CIT(A). The Ld.AO applied a profit rate of 10% of gross receipts due to lack of bills and vouchers for certain business expenses. The Ld.CIT(A) deleted the addition after considering the details and reply filed by the assessee, stating that the books of account were found to be in order after examination. The Tribunal upheld the decision of the CIT(A) as the Ld.AO accepted the books of accounts filed by the assessee and verified all relevant details, leading to the dismissal of the revenue's appeal on this ground.

Issue 2: Deletion of cash credits in the bank account by CIT(A)
The revenue challenged the deletion of cash credits amounting to ?43,37,000 in the bank account by the CIT(A). The Ld.AO disallowed the amount due to lack of details regarding creditors provided by the assessee. However, during the appellate proceedings, the assessee produced necessary evidence supporting the cash deposits, stating that they were from cash receipts in connection with the business. The Ld.CIT(A) analyzed the evidence and books of accounts, concluding that the cash deposits were genuine and made out of cash receipts received in connection with the business. The Tribunal agreed with the CIT(A) that the deposits were legitimate and upheld the decision to delete the cash credits, dismissing the revenue's appeal on this ground as well.

The Tribunal also noted that the general grounds raised by the revenue were of a general nature and did not require further adjudication. Consequently, the appeal filed by the revenue was dismissed, and the order was pronounced on 01/11/2018.