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TMI Blog2017 (11) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... ny such information, the entire deposits required to be brought to tax since the assessee neither established that it has carried on the business nor established the source of the credit. the assessee has neither established the fact that he is carrying on business and the sources of the credit. Though the assessee had offered the income on estimation basis ranging from 5% to 8% on turnover, the Ld.CIT(A) has not considered the same at the time of disposing the appeal. During the appeal hearing also the assessee could not furnish any details with regard to the sources of deposit and the destination of payment. No evidence was filed by the assessee to establish that he is carrying on the business. Therefore, we are of the considered opinion that the matter should be remitted back to the file of the assessing officer with a direction to ascertain the true nature of the receipts and payments - Decided in favour of revenue for statistical purposes. Claim of deduction u/s 54F - as per AO assessee had acquired the commercial property - Held that:- As per the development agreement, the assessee has acquired the residential flat but given it to NRI academy for running the school. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogether and disposed off in common order as under. 2. Common grounds of appeal in all the assessments raised by Revenue are related to the addition made by the assessing officer towards unexplained cash deposits. The assessee is an individual. Survey u/s 133A was conducted in the case of M/s Vasudha Shelters, LIC Colony, Gollapudi, Vijayawada on 23.02.2010 and during the course of survey proceedings, it was noticed that M/s Vasudha Shelters has entered into Development Agreement dated 16.06.2008 with Shri Dhanekula Lakshmaiah and others (land owners) for construction of apartments at Gollapudi. Simultaneously, survey u/s 133A was conducted in the premises of the assessee on 23.02.2010 and during the course of survey, certain loose sheets / documents / bank statements were found which were impounded u.s 133A(3)(ia) of the Income Tax Act, 1961. As the assessee has not filed the returns of income, notice u/s 148 was issued on 15.06.2012. The assessee is having savings bank account in State Bank of India, Gollapudi bearing a/c No.10103401208 and another account in M/s Swarna Cooperative Urban Bank Ltd., A/c No.189. During the assessment proceedings, the assessing officer found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal before this Tribunal. 4. Appearing for the revenue, Ld.DR argued that the assessee has made huge cash deposits in the bank account and the Ld.CIT(A) confirmed the addition of ₹ 8,00,000/- for A.Y.2006-07, ₹ 73,000/- for the A.Y.2007-08, ₹ 6,49,000/- for the A.Y.2008-09 and ₹ 12,20,000/- for the A.Y.2009-10 and deleted the remaining additions even though the assessee has not furnished any evidence. Though the assessee has made huge cash deposits for which the source was not explained, the CIT(A) deleted the addition applying peak credit theory which is not correct. The assessing officer has examined the submissions of the assessee and since the assessee failed to explain the nature and source of each receipt, the assessing officer made the addition u/s 69 of the I.T.Act. Ld.DR argued that close scrutiny of the bank account of the assessee reveals that the assessee has withdrawn the amounts and after sufficient gap of time made the deposits during the intervening period, the assessee has withdrawn the small amounts also which indicate that there was no cash available with the assessee out of the withdrawals to make redeposit. The conduct of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -09 18,50,000 2009-10 61,60,000 7. The assessee also has made cash withdrawals out of the above deposits. However, the assessee has not furnished the return of income and the details of business carried on in the earlier years and no evidence was furnished by the assessee with regard to the business carried on by the assessee. During the survey proceedings also, the department could not lay their hands on the business activity carried on by the assessee. In these facts and circumstances, the true and correct nature of the receipts was not ascertained. Though the assessee stated that it had received the advances from the buyers of the lands and paid to the vendors, the names and addresses of the buyers and vendors was not furnished by the assessee. In the absence of non furnishing the names and addresses of the buyers and vendors, the assessee has become an instrument to evade the income tax by the buyers and vendors of the properties. It is a known fact that lot of unaccounted money was pumped into real estate business. Though the assessee s submission that the assessee had received the amounts from the buyers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, we are of the considered opinion that the matter should be remitted back to the file of the assessing officer with a direction to ascertain the true nature of the receipts and payments and the details of persons to whom the monies were paid and received. The AO is directed to obtain and find out the complete modus operandi and decide the issue afresh on merits. Accordingly, appeal of the revenue on this issue for the assessment year 2006-07 to 2009-10 is allowed for statistical purposes. 8. The next issue of revenue for the assessment year 2009-10 is the assessee s claim of deduction u/s 54F of I.T.Act. The assessee claimed deduction u/s 54F on capital gains, which was rejected by the assessing officer, since the assessee has given the property on rent to NRI academy which is an educational academy. The property was not used for the purpose of residential purpose, hence the assessing officer viewed that the assessee is not eligible for deduction u/s 54F. Accordingly rejected the claim of the assessee u/s 54F of I.T.Act. The assessee went on appeal before the Ld.CIT(A) and the Ld.CIT(A) allowed the appeal of the assessee. Hence, the revenue is in appeal before us. 9. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee since the assessee failed to furnish the return of income for the earlier years and there was no evidence to show that the assessee has carried on the business. The assessee did not maintain any books of accounts. The assessee did not file any regular return of income till the survey was conducted and the returns were filed only after the issue of notice u/s 148. In the absence of any evidence to establish that the business was carried on by the assessee and earned the income, the Ld.CIT(A) held that the opening cash balance claimed by the assessee is not established and cannot be treated as explained. Ld.CIT(A) relied on the judgement of Hon ble Madras High Court in the case of C.Pakirsamy Vs. ACIT(Mad) [315 ITR 293] and dismissed the appeal of the assessee. Ld.CIT(A) has confirmed the addition holding that the assessee did not file the return of income and failed to furnish any evidence with regard to the opening cash balance on real estate business and did not maintain the books of accounts. 14. We have heard both the parties and perused the material placed on record. Though the assessee stated to have opening cash balance of ₹ 14,90,000/- there was no evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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