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TMI Blog2018 (4) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... er addition to the extent of 54,45,920/-. On appeal, the ITAT further granted relief on the basis of estimation and directed the AO to make addition of 5,00,000/-. Ultimately the addition sustained in this case only on the basis of estimation. Therefore, the AO is not able to establish in this case the assessee concealed income by furnishing inaccurate particulars. It is not a fit case to impose penalty u/s 271(1)(C) of the Act. Accordingly, the penalty is deleted and the appeal filed by the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 77,43,204/- and treated the balance amount of ₹ 62,77,186/- as unexplained cash credit. 3. On appeal, the CIT(A) has made a finding that credit for the deposits made within 3 days from the date of withdrawals should be given and accordingly he has deleted the amount of ₹ 54,45,920/- and sustained the addition of ₹ 8,31,266/-. 4. On appeal the ITAT has considered the entire issue and held as under : "8.1. On a careful perusal of the copies of bank accounts submitted in the paper book compiled by the assessee, we notice that, on majority of the occasions, the assessee is making cash deposits continuously for few days and there after a demand draft is taken for almost equal to the aggregate of the amounts so d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the time span. However, on a careful perusal of pattern of the transactions, the possibility of assessee engaging in any other business activities cannot be ruled out. As stated earlier the assesses is making deposits continuously for few days and thereafter he, withdraws the entire amount either by way of cash or by demand draft/ cheque. Hence, instead of giving outright credit for the withdrawals, in our opinion, it would meet the ends of justice, if we estimate the income out of the said transactions treating the same as business transactions. The AO himself has given credit of the sates turn over out of the total deposits] by assuming that the part of deposits represents the sales turnover. By extending the assumption of the AO, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when income is estimated. 6. On the other hand, Ld.DR relied on the orders passed by the authorities below. 7. We have heard both the sides, perused the material on record and gone through the orders of the authorities below. The assessee has deposited an amount of ₹ 46,05,760/- and also ₹ 94,14,630/- in the UCO bank, Eluru. The assessee is also maintaining another bank account with Godavari Grameena Bank at Eluru. When the AO has asked the assessee what is the source of deposits in UCO bank, it was submitted by the assessee before the AO that the withdrawals made from Godavari Grameena Bank were deposited in the UCO bank. The AO has found that there is mismatch in the withdrawals and deposits, therefore, the AO has accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this assumption of the AO, the remaining deposits of ₹ 62,77,182/- was also treated as the sales turnover outside the books of accounts. Accordingly we estimate the profit of 8% of the said deposits and the same works out to ₹ 5,02,175/-. Accordingly directed the AO to make an addition of ₹ 5,00,000/-. In our opinion it would meet the ends of the justice and we order accordingly. We find that in this case, the AO has given a credit to the extent of ₹ 77,43,204/- relating to the sales amount. On appeal, the Ld.CIT(A) adopted the methodology of amounts deposited within 3 days and withdrawals and accordingly deleted the further addition to the extent of ₹ 54,45,920/-. On appeal, the ITAT further granted relief on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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