9911796707
TMI Blog2014 (1) TMI 1638X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of 16,94,500/- being the amount deposited in the bank account and since it was a larger amount, therefore, no addition on account of gross profit was made. These facts clearly show that the amount deposited in the bank account of the assessee was part of the total turnover, which was enhanced to 30 lacs from the turnover disclosed by the assessee in the absence of the production of books of account. The ld. CIT(A) was, therefore, justified in holding that the addition on account of unexplained bank deposits is unjustified and the addition on account of applying reasonable profit rate has to be made - No merit in appeal - Decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... aintained, therefore, the AO made this addition. In fact, cash was deposited into the bank account of the assessee which is less than the gross receipts. The entire addition of bank deposit is wholly unjustified. The assessee relied upon certain decisions in support of the contention. The ld. CIT (A) found the contention of the assessee to be correct that the deposit in the bank account was less than the turnover. The ld. CIT(A) accepted the contention of the assessee that the entire deposit in the bank account cannot be taxed even if provisions of section 44AD would not apply in this case. The ld. CIT(A) found that the AO has estimated gross turnover at ₹ 30 lacs and applied the profit rate of 10% to estimate the business profit at & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived from the business persons were deposited in the said bank account and same amount was paid through cheques to different businessmen from whom he had purchased the goods on credit. He has further explained in answer to question No.9 that since there was loss in this retail business, source of income from such business was not shown. He had also agreed to give names and addresses of the persons with whom such business was conducted. The assessee also moved before the ld. Addl. CIT u/s. 144A of the Act and submitted before him that the amount, which the ass essee deposited in his bank account represents sale proceeds of the goods brought from Surat for selling them against commission / Dalali. The amount deposited in the bank account w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was in volved 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e totality of facts and circumstances, we are of the view that the authorities below are not justified in making addition u/s. 69 of the IT Act against the assessee in sum of ₹ 31,62,300/-. When we have held above that total deposits in the bank account are the sale proceeds of the assessee, the profit rate should have been applied instead of considering the entire sales of income of the assessee. We are fortified in our view by the judgments of Hon'ble Gujrat High Court in the case of President Industries (supra) and M.P. High Court in the case of CIT vs. Balchand Ajit Kumar (supra) and Manmohan Sadani vs. CIT (supra). Since the total deposit being the total sales of the assessee are only ₹ 31,62,300/-, thus, the turnover of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the assessee was part of the total turnover, which was enhanced to ₹ 30 lacs from the turnover disclosed by the assessee in the absence of the production of books of account. The ld. CIT(A) was, therefore, justified in holding that the addition on account of unexplained bank deposits is unjustified and the addition on account of applying reasonable profit rate has to be made. The finding of the ld. CIT(A) are clearly supported by the order of the Tribunal in the case of Kamal Kumar (supra). We, therefore, do not find any merit in the departmental appeal. The same is accordingly dismissed.
5. In the result, the departmental appeal is dismissed. Order pronounced in the open court. X X X X Extracts X X X X X X X X Extracts X X X X
|
