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TMI Blog2017 (7) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... f 8% on the gross receipts as declared by the assessee. Brief facts of the case are that assessee is proprietor of M/s R.D. Construction Co. engaged in erection and installation. The statement of the assessee was recorded at assessment stage in which the assessee admitted that he is proprietor of M/s R.D. Construction Co. and said firm was engaged in business of erection, fabrication and installation of plant, machinery, structure and civil works. The assessee had not maintained any books of account for this business and has no details of parties from whom he had made purchases. No receipts are available. The profit rate have been shown by applying 7% of the gross receipts from the business. The assessee did not maintain any bills, vouchers, ledger, wages register etc. The Assessing Officer asked the assessee to explain the basis of adopting average profit of 8%. The Assessing Officer, on considering explanation of the assessee found that explanation of the assessee is not convincing and that Assessing Officer applied net profit rate of 12% in view of the judgement of Hon'ble Punjab & Haryana High Court in the case of Prabhat Kumar 323 ITR 675 and made both the above additions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted during the year was re-deposit of amounts withdrawn in earlier years and given as bayanas in the deals which did not mature. The Assessing Officer noted that cash deposits to the tune of Rs. 3.13 Cr in various banks accounts maintained by the assessee. When questioned about source of deposits, assessee had submitted that these amounts wee given as bayanas for purchase of immovable properties in financial year 2006-07, but for the some reasons, the deals did not materialize and the bayanas were received back which had been deposited by assessee in his bank accounts. The Assessing Officer asked the assessee to produce evidence regarding bayanas given earlier but assessee did not produce any evidence and so the Assessing Officer treated the entire amount as unexplained cash deposit. The Assessing Officer has not given benefit of cash withdrawals amounting to Rs. 7.65 Cr on the ground that the assessee had not maintained his books of account and had not given any evidence of expenses incurred, which were largely in cash. 9. The addition was challenged before ld. CIT(Appeals) and written submission of the assessee is reproduced in the impugned order in which the assessee briefly ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in the case of ACIT Vs Joginder Pal, ITA No. 734/2015 dated 12.01.2015. iv) Decision of Hon'ble Punjab & Haryana High Court in the case of CIT Vs Surinder Pal Anand 192 Taxman 264. 10(i) On the other hand, ld. DR relied upon orders of authorities below and submitted that assessee failed to explain cash deposit in the bank accounts, therefore, addition may be confirmed. 11. We have considered rival submissions. It is not in dispute that assessee is engaged in the business of fabrication and erection of steel structures for various private parties. The assessee did not maintain books of account and no audit report or bills and vouchers have been produced before authorities below therefore, profit was estimated by applying higher profit rate. The assessee also explained that all the details of receipts are mentioned in Form No. 26AS and total receipts of the assessee were found in a sum of Rs. 6.78 Cr which have been received through banking channel and entered into the bank accounts of the assessee. Ultimately, profit rate was enhanced and profit have been computed accordingly on which we have also confirmed the orders of authorities below. The Assessing Officer found asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l but in preceding assessment years as well. Therefore, such reason would not be relevant to take any adverse inference against the assessee. 12. The Hon'ble Punjab & Haryana High Court in the case of Shiv Charan Dass Vs CIT 126 ITR 263 considered the facts wherein the amounts kept with the wife of the assessee from 1951 upto her death in 1956 - later deposited in bank in the names of two unmarried daughters of the assessee after they became major - explanation of the assessee was not accepted and amount deposits were considered from undisclosed sources. Hon'ble High Court held that, "There was nothing on record to show that amount was utilized by the assessee or the HUF in any other manner than the one which was represented by the assessee, the onus lay on the department to show that explanation offered by the assessee should not be accepted". 12(i) The ITAT Chandigarh Bench in the case of Ankur Nohria Vs ITO (supra) held in para 8 as under : "8. We have considered the rival submissions. It is not in dispute that the total sales of the assessee were of Rs. 39,00,875/-. The assessee is the trader of ball bearings and machinery parts and explained before the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss deposits. However, considering the fact that the assessee made small deposits in the bank account with Kotak Mahindra Bank, Rajpura on various dated and after depositing the cash to this account, the assessee also withdrawn the same amount either on the same day or on the next day, would disclose that the assessee was having availability of the cash for further deposit in the same bank account maintained with Kotak Mahindra Bank, Rajpura. The A.O. has not brought any evidence on record to prove that the assessee has spent the amount withdrawn somewhere else. The theory of peak credit is not applicable in the case of the assessee because the assessee never accepted it to be unexplained money. Therefore, in the absence of complete details and considering the fact that the amount of cash was rotating in the bank account of the assessee with Kotak Mahindra Bank, Rajpura by making cash deposits and immediately withdrawing the same would show that the entire cash deposits in the bank account may not be unexplained amount of the assessee. Therefore, considering the totality of the facts and circumstances, it would be reasonable and proper to give some substantial benefit to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and report from the Assessing officer and the Assessing officer in his report dated 23.7.2012 did not point out any discrepancy with regards to the assessee's contention regarding the withdrawals from the bank account. The Ld. CIT(A) has categorically stated that the copy of the bank account, cash flow statement and the balance sheet as on 31.3.2007 and 31.3.2008 were submitted before the Assessing officer. All the entries in the cash flow statement were duly recorded from the bank accounts and represented the various cash withdrawals and cash deposits made by the assessee after availing the bank loan of Rs. 20 Lakhs. The Ld. CIT(A) has also rejected this contention of the Assessing officer that the assessee had made need based cash withdrawals from his bank account. Subsequent withdrawals were made only after the withdrawals made earlier had been utilized by the assessee. According to CIT(A), merely because cash was withdrawn on a particular date also does not imply that the cash already withdrawn on earlier dates had been utilized. We fully endorse the above view of the CIT(A). The Assessing officer has made the observation that in the case the assessee was actually having ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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