9911796707
TMI Blog2020 (11) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... Banga Gramin Bank and UCO Bank - Serious discrepancies were found in the books of account of the assessee, inasmuch as, the substantial balances in the two accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank were not reflected in the audited balance-sheet of the assessee. Similarly the interest earned by the assessee in one Bank account as well as interest charged in the other Bank account was also not reflected in the accounts of the assessee. Keeping in view these serious discrepancies seriously doubting the reliability of the audited accounts of the assessee, the onus, in our opinion, was greater on the assessee to establish by furnishing cash flow statement duly supported by the relevant books of account that the deposits found to be made in the Bank accounts maintained with Paschim Banga Gramin Bank and UCO Bank represented the sale proceeds of his business, which were duly reflected in the books of account and included in the total turnover finally declared in the return of income. Since this exercise was not specifically done by the assessee either during the course of assessment proceedings before the Assessing Officer or during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the assessee, the Assessing Officer treated the total deposits found to be made in the two Bank accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank aggregating to ₹ 5,42,38,779/- as the undisclosed turnover of the assessee s business and applying a gross profit rate of 9.52% as reflected in the audited accounts of the assessee, he made an addition of ₹ 51,63,531/- to the total income of the assessee in the assessment completed under section 143(3) of the Act vide an order dated 23.11.2016. 3. Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) and the following submissions were made on behalf of the assessee before the ld. CIT(Appeals) in support of his case that the addition of ₹ 51,63,531/- made by the Assessing Officer on account of profit allegedly earned on undisclosed turnover was not sustainable: - The assessee hhas three bank accounts viz. (i) Paschimbanga Gramin Bank, (ii) CC Account with UCO Bank, Shyampur and (iii) State Bank of India, Uluberia. All the cash received from the ration shop is deposited in Paschimbanga Gramin B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,565/- as on 31.03.2014 and in Paschimbanga Gramin Bank, there was balance of ₹ 77,158/- only. The bank balance on the opening day i.e. 1.4.2013 was ₹ 1,37,752/-. Hence, the balance was not more than the opening balance and no addition can be made. These explanations were submitted to the AO at the time of assessment proceedings, but the AO rejected the same and added ₹ 51,63,531/- as gross profit on account of these alleged undisclosed sales on an estimate basis. Therefore, the action of the AO in adding back the gross profit on this sale is not correct as it is already included in the gross profit already disclosed and if the same is added again, then it will be double addition. It is submitted that the addition cannot be made solely on the basis of two bank accounts which inadvertently were missed to be incorporated in the balance sheet of the assessee. The copy of the bank statement for both banks is attached herewith. The facts stated above are fully verifiable from the bank accounts where for purchase payments even the names of the sellers are mentioned. Hence, the addition was not called for and may be deleted . 4. The ld. CIT(Appeals) did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected for limited scrutiny on the issue of cash deposits in the Bank accounts being more than the turnover, the scope of the assessment was limited and the Assessing Officer was not justified to make the addition on account of profit allegedly earned by the assessee on undisclosed turnover, which was an altogether different issue. We are unable to accept this contention of the ld. Counsel for the assessee. While examining the issue of cash deposits in the Bank accounts of the assessee being more than the turnover, it was found by the Assessing Officer that two Bank accounts maintained by the assessee with Paschim Banga Gramin Bank and UCO Bank were not reflected in the accounts of the assessee. He also noticed that huge deposits aggregating to ₹ 5,42,38,779/- were made in the said Bank accounts and since the said Bank accounts were found to be not reflected in the accounts of the assessee, the same were treated by him as the undisclosed turnover of the assessee s business and estimated profit thereon was added by him to the total income of the assessee. It is thus clear that the impugned addition made by the Assessing Officer on account of profit allegedly earned by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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