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TMI Blog2015 (9) TMI 1416X X X X Extracts X X X X X X X X Extracts X X X X ..... e details that the appellant had offered only interest income in the revised return of income. However, no cogent evidences or explanation were submitted during assessment proceedings to establish the investment in GSFC fixed deposits as explained investment and therefore, the AO is justified in treating the entire maturity amount as income of the appellant In respect of sundry debtors and inter bank transfer entries, it is observed that while framing the assessment the AO has duly taken care of the same while computing the income and hence there is no need to interfere in the action of the AO. To summarize out of the total addition of ₹ 55,64,745/- on account of unexplained investment, the appellant gets relief of ₹ 30,11,991/- (Rs. 18,46,750 + ₹ 11,65,241) as discussed hereinabove and the addition of balanced amount of ₹ 25,52,754/- is sustained - Decided against revenue Adoption of 8% of the net profit on total turnover - Held that:- We find that the Assessing Officer has applied Section 44AF but adopted 8% of the net profit on total turnover. Ld. CIT(A) has adopted profit @ 5% which in our considered view this has been rightly adopted. As the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 25,52,754/- out of ₹ 55,64,745/-. 4. Apropos to ground no.1 is against deletion of addition of ₹ 30,11,991/- made by Assessing Officer on account of undisclosed income u/s.69 of the Act. Ld. Sr. D.R., Shri Shiva Sewak vehemently argued that ld. CIT(A) was not justified in reducing the addition. He submitted that undisclosed fact is that assessee has not disclosed bank accounts before the Assessing Officer. Assessing Officer has recorded that the accounts were not disclosed in regular books of accounts. Therefore, the Assessing Officer was justified in making addition as undisclosed amount credited into the bank accounts of the assessee and same was rightly treated as income from other sources . On the contrary, ld. Counsel for the assessee has submitted that the entire amount cannot be subjected to tax. He submitted that the Assessing Officer has estimated profit u/s.44AF. So, this amount would also be subject of Section 44AF. He submitted that the Assessing Officer ought to have restricted the disallowance to the extent of estimation of profit. Ld. Counsel for the assessee has placed reliance on the judgment of the Jurisdictional High Court rendered in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reflecting different nature of transactions. I have considered the explanation related to different deposits alongwith evidences placed before the AO during assessment proceedings. It is seen that the deposits / investments of ₹ 55,64,745/- in the said bank accounts were mainly of following nature. a. Loans from friends and relatives b. Interest and maturity of investments It is worth while to mention here that the cash deposits attributable to wholesale trading of the appellant were considered by the AO for estimating the profit and the same was covered in the discussion in earlier ground. The remaining deposits, other then the cash deposits, were mainly related to the above referred nature of transactions and the ARs of the appellant had explained the source of deposits bank wise for different bank accounts and the same are dealt with as under. It is observed from the assessment order as well as the details submitted by the appellant that the other deposits in the impugned bank accounts were related to interest and other income and loans from friends and relatives which are summarized below. Particulars A/c. No. 9427 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso the appellant had received loan from Smt. Chandanben K. Parmar of ₹ 5,30,450/- and Smt. Jayshreeben C. Parmar of ₹ 9,84,300/- in all these four account as per the details in the above referred chart. From the details submitted during assessment proceedings, it is seen that the appellant had furnished their confirmation along with bank statements and in some cases, he had also submitted the details of their returns of income like PAN, copy of acknowledgement etc. By furnishing these details, the appellant had discharged his initial burden of establishing the genuineness of transaction and identity and credit worthiness of the depositors. It is observed that the AO had not rebutted the evidences filed by the appellant and also did not make any further inquiry. The AO also could not lead any evidence to establish that the impugned transactions were not genuine. Under such circumstances, when the source of funds credited in the impugned bank account was explained with evidence, the action of the AO to treat the amount of loan as income of the appellant is unjustifiable. I, therefore direct the AO to treat the total amount of loan of ₹ 18,46,750 from Bhudarji Mitha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 800000 1165241 The ARs contented that the principal amount of the same was invested by Smt. Dayshreeben C. Parmar and Smt. Chandanben K. Parmar from their bank accounts during A.Y. 2007-08 and the necessary addition in respect of these investments were made in the assessment orders of both of them in AY. 2007-08. From the details submitted before the AO, it is observed (hat the contention of the ARs are found to be correct. The appellant hap submitted the copies of assessment orders of both these persons for A.Y. 2007-08 and it is seen that the original investment amounting to ₹ 8,00,000/- had already been taxed in the hands of both these persons and therefore, the same cannot be taxed in the hands of the appellant again. Since all these accounts were in joint name, the sale proceeds were deposited in these bank accounts. As a result the appellant gets relief of ₹ 8,00,000/- in the principal amount of investment as already taxed in earlier assessment year. Since the appellant was not the owner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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