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TMI Blog2016 (1) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... the presumptive basis is 8% whereas the assessee has declared the profit at 5% of turnover. Assessee has claimed that he has taken ₹ 5 lakhs loan from his late brother’s family and he has not substantiated the above claim by way of any documentary evidence as he has not disclosed even in the receipts and payments account submitted before the AO. Since the assessee has crossed the turnover of ₹ 40 lakhs, he is not eligible to claim benefit u/s 44AD as per the provisions of this section. As the assessee has not substantiated the loans and advances received from his customers and his late brother’s family and also he is not eligible to claim the benefit u/s 44AD, in our considered view, respectfully following the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustomers and ₹ 5 lakhs taken from family members of his late brother. AO asked the assessee to furnish names and addresses of persons from whom he received advances and also names and addresses of the persons to whom he made payments for supply of building material and also asked to furnish confirmations from the family members of his late brother to substantiate his claim for ₹ 5 lakhs from them. Assessee did not furnish the above said documents or information as called for by the AO. The AO completed the assessment ex-parte u/s 144 as per the information available on record. As the assessee fails to explain the source of cash deposits of ₹ 46,42,700/-, the same was treated as unexplained income of the assessee and added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were the case that the advances deserved to be considered for explaining the cash credits. The ld. CIT (A) ought to have directed the A.O. to examine the genuineness of such advances, which were not proved by the assessee to the sat isfact ion of the AO. 3 The observat ion of the CIT(A) 's that the prof it of the business available at ₹ 2,34,000/- is also not correct as the assessee had incurred expenditure of ₹ 70,000/- out of the said income for claiming deduct ion under chapter VIA and leaving only the balance of ₹ 1,64,400/- . Further it is submitted that the profit or loss is determined at the end of year after making necessary/ statuary adjustment , where the last of the cash deposit made in the account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished. These details were not furnished even during appellate proceedings by the assessee. However, the CIT (A) mentioned that the appellant was carrying on the business of supply of construction material even though, there was no iota of evidence to that effect. The advances received and supply of material on commission basis was held to be factually correct by the learned CIT(A) (line 7 in page 4 of the appellate order), which has not been put to strict proof, either by the Assessing Officer or by the Appellate Authority. 6.2 The ld. DR contended that in view of the said background, acceptance of a part of receipt of ₹ 5,00,000/- as unexplained, whereas, at the same time, holding that advances of ₹ 35,91,000/- have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nities were given as per the Order Sheet notings (PI. see Page Nos.1 2 of Paper Book). 6.5 Finally, the ld. DR prayed that the order of learned CIT(A) may be cancelled and the order of AO may be restored, upholding the addition made on account of unexplained cash deposits. 7. The ld. AR, on the other hand, submitted that the assessee has responded to the notices of AO and he submitted that no additional information was submitted before the CIT(A). He further submitted that receipts and payments were submitted before the AO which are available in paper book. He submitted that in response to notices, the assessee has filed relevant information to AO, which is available at page 3 of paper book. The ld. AR submitted that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts account submitted before the AO. Since the assessee has crossed the turnover of ₹ 40 lakhs, he is not eligible to claim benefit u/s 44AD as per the provisions of this section. As the assessee has not substantiated the loans and advances received from his customers and his late brother s family and also he is not eligible to claim the benefit u/s 44AD, in our considered view, respectfully following the decision of the coordinate bench in case of Suresh Kumar Biyani (supra), we direct the AO to calculate the gross income of the assessee at 20% of the total turnover as accepted by the assessee before the CIT(A). 9. In the result, appeal of the revenue is partly allowed. Pronounced in the open court on 22nd January , 2016. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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