9911796707
TMI Blog2015 (12) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has accepted that the credits in the disclosed bank account were not shown in the books of account and did not put forth any proper explanation for these cash deposits in its account and further most of the withdrawals from this bank account have been made for payment to Kotak Securities Ltd. for share trading business. This means that flow of funds in this account was not at all related to the business of job of jari kasab done by the assessee and, therefore, the contention of the ld. AR for applying net profit rate on this amount of ₹ 2,25,977/- cannot be accepted and accordingly we are of the view that ld. CIT(A) has rightly confirmed this addition of unexplained investment in the hands of the assessee and as such this ground of the assessee is dismissed. Addition as unaccounted fixed deposits as income u/s 69 - Held that:- As during assessment proceedings Assessing Officer found that assessee had made investments in cash certificates in various banks in the form of Fixed Deports and these Fixed Deposits were jointly held by the assessee with either his father or mother or his wife and the photo of the assessee was appearing on these Fixed Deposits and these Fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions though this bank account after having accepted the deposits as trading receipts and granted deduction of expenses incurred. 2. The ld. CIT(A) erred in law and on facts in confirming addition of cash shortage of ₹ 1,03,249/- and payments of ₹ 1,79,481/- treating as capital in nature in this account ignoring the fact that once addition of peak balance is made there is no justification of any separate additions. Ld. CIT(A) ought to have deleted such amount comprising in additions made by AO u/s 69 of the Act. 4. With the assistance of ld. AR and ld. DR and perusing the record available on record, we are able to gather that during the course of assessment proceedings on the basis of some information, Assessing Officer detected one a/c held by assessee with ICICI bank which was not shown in the books of account and during the year under appeal total credits in this undisclosed ICICI bank a/c was ₹ 25,64,264/- and this fact was admitted by assessee along with giving a reason that all these transactions were relating to business of the assessee and to facilitate more sales and good services to the customers based in South India this account was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not given any evidence regarding expenses through the account and a presumption can be raised that expenses only in the nature of direct expenses have been incurred. The disclosed gross profit rate of the appellant is 16.78%. Therefore, the profits from transactions would be ₹ 4,30,283/-. 3. Any cash shortage which may occur in the account, i.e. shortage between cash deposit and cash withdrawals as this would signify deposits made by the assessee. From the details provided by the appellant, this cash shortage is seen to be ₹ 1,03,249/-. 4. Any payments made from the account which is not to available for rotation and therefore would not be part of the peak theory. It is seen from the details of this bank account provided by the appellant that he has made payments aggregating to ₹ 1,79,481/- to GE countrywide CFS Ltd. and to City Financial Consumer Finance from this account which would be capital in nature and not available for rotation. 5. Interest earned from the account ₹ 69/- Therefore, income of the appellant from the undisclosed ICICI bank account ₹ 8,39,832/-. 6. Ld. AR submitted that the undisclosed sales as observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forming part of the composite amount of ₹ 8,39,832/- mentioned in ground no.1. 9. From examining the sustained addition by ld. CIT(A) we find that he has rightly sustained addition of ₹ 1,26,750/- being peak of credit less opening balance, interest credit of ₹ 69/-, payment of ₹ 1,79.481/- to GE countrywide as the capital payments do not form part of the business cycle and ₹ 1,03,248/- on account of cash deficit from cash deposit and withdrawal as the source of cash deficit was not ascertainable from the cash flow statement. 10. As regards sustained addition of ₹ 4,30,283/- calculated by ld. CIT(A) @ 16.78% of trading transactions, we find that during the course of assessment proceedings apart from the treatment of undisclosed credits in the undisclosed bank account of ₹ 25,64,264/- Assessing Officer has not raised any objection in the books of account maintained by the assessee and has also not invoked the provisions of section 143 and has accepted the profits disclosed by the assessee on its turnover. 11. Hon ble Gujarat High Court in the case of CIT vs. President Industries (2002) 124 Taxman 654 (Guj) has held as under :- 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts in confirming action of AO in respect of addition made of ₹ 2,25,977/- in respect of account with Surat Peoples Co operative Bank Ltd. Both the lower authorities failed to appreciate that the impugned account was disclosed in the books of the appellant and the closing balance was incorporated in the balance sheet. Ld. CIT(A) ought to have deleted addition made of disclosed account. 13. During the course of assessment proceedings Assessing Officer on verification of the bank account held that Surat Peoples Co-op. Bank Ltd. found that the closing balance of the bank account was duly reflected in the balance sheet but the transactions entered into this bank account during the year were not shown in the books of account and total of such credit not shown in the books of account is ₹ 2,25,977/- out of which majority are by cash deposit and the withdrawals from this account have been used for issuing cheques to Kotak Securities Ltd. for the purpose of share trading. 14. Appeal before CIT(A) could not bring any relief to the assessee. Assessee is now in appeal before the Tribunal. 15. The ld. AR tried to impress upon that this account should not be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance sheet of any of the other joint holders and therefore, this amount was added as unexplained investments. Even before ld. CIT(A) no evidence has been furnished by the assessee to show that he was not the actual beneficiary of the Fixed Deposits and was unable to prove that Fixed Deposits related to any other year and therefore, ld. CIT(A) did not give any relief to the assessee. Even before us also nothing contrary has been produced to prove that these Fixed Deposits relate to any other year or Fixed Deposits are not related to the assessee. Therefore, it seems that assessee has nothing to say more to substantiate its ground and in these circumstances, we dismiss this ground of assessee. 22. Ground No. 5 reads as under :- 5. Both the lower authorities have erred in law and on facts in not considering various explanations, submissions and evidences placed on record by the appellant in its proper perspective. This action of both the lower authorities deserves to be quashed. 23. This ground is of general nature and needs no adjudication. 24. Ground No. 6 is regarding levy of interest u/s 234A/234B/234C 234D of the Act. This ground is consequential. 25. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
