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TMI Blog2014 (3) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... otal sales of the assessee are only Rs.31,62,300/-, thus, the turnover of the assessee did not exceed the amount of Rs.40,00,000/- and as such, the provisions of section 40AF of the Act would apply in the case of assessee for the purpose of computing the profit and gains of retail business, which provides that sum equal to 5% of the total turnover in the previous year on account of such business shall be deemed to be the profit and gains of such business – Decided partly in favour of Assessee. - ITA No. 24/Agra/2012 - - - Dated:- 19-10-2012 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Appellant : Shri Rajendra Sharma, Advocate For the Respondent : Shri K. K. Mishra, Jr. D.R. ORDER Per Bhavnesh Saini, J.M.: This appeal by the assessee is directed against the order of ld. CIT(A)-II, Agra dated 25.11.2011 for the assessment year 2008-09 on the following grounds : 1. That the authorities below has erred on facts and in law while sustaining the addition for Rs.31,62,300/-, without taking into consideration the submission/document before them, the addition sustained by the CIT(Appeals) is highly unjustified and is not judicious, and is agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from salary and interest and did not maintain any books of account. Regarding the source of deposit made in bank account with ING Vysya Bank, the assessee explained that it is a saving account of the assessee and entire deposit made therein have been made by him. In F.Y. 2007-08, the assessee deposited cash in this account which was in respect of his small business. Whatever amount was received from the business persons were deposited in this account and the same was returned to business persons from whom goods were purchased on credits and payments have been made to them by cheque. Since there was loss in this business, therefore, it was not shown in the return of income. Thereafter, the tax liability if would arise out of this business, the assessee would deposit the tax. The assessee also explained in statement that he would disclose the name and address of the business persons with whom the assessee had business dealings. The AO asked further information from the assessee, but in the absence of any further details, the AO was not satisfied with the explanation of the assessee. Then the assessee made reference u/s. 144A to the Addl. CIT, Agra seeking direction in the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either the AO nor the Addl. Commissioner has summoned any of such persons for verification. The ld. Counsel for the assessee, therefore, submitted that the deposits are merely sale proceeds of the goods brought from Surat. Therefore, the addition is unjustified and at the most, net profit rate may be applied for computing income of the assessee from commission / Dalali in the matter. On the other hand, the ld. DR relied upon the orders of the authorities below. The ld. Counsel for the assessee also relied upon the decision of Gujrat High Court in the case of President Industries, 258 ITR 654, decision of M.P. High Court in the case of Balchand Ajit Kumar 263 ITR 610 and in the case of Manmohan Sadani vs. CIT, 304 ITR 52 on the proposition that entire sale proceeds cannot be recorded as profit or treated as undisclosed income of the assessee and profit rate may be applied to work out the income. 5. We have considered the rival submissions and perused the orders of the authorities below. It is admitted fact that the assessee opened the bank account in question, in which several cash deposits were made on different dates totaling to Rs.31,62,300/-. Copy of the bank account is filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to different parties time to time. The assessee did not maintain any books of account of this business. The details contained in the bank account would clearly support the contention of the assessee that the assessee was involved in Dalali business of selling ladies suits and whatever amount was received against the sale of ladies suits, the assessee deposited the amount in the bank account and thereafter, the amounts were transferred to the concerned parties/businessmen/traders from whom the goods were taken by the assessee on credit. The details noted in the bank account itself support the case of the assessee that this activity has been done by the assessee merely on commission. The assessee filed certain confirmations before the authorities below, copies of which are also filed in the paper book to support the contention of the assessee that the assessee was dealing on commission basis for selling ladies suits. The details contained in the bank account should have been verified by the AO and the Addl. CIT before arriving at the decision in the matter. When the assessee made specific request to the Addl. CIT that the concerned parties may be summoned to verify the commission bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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