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TMI Blog2020 (12) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... ings bank account. In this case, the Assessing Officer has accepted part of cash deposits as out of her business receipts and part of cash deposits as her unexplained investments, without brought on record any cogent reasons to justify different view taken on cash deposits found in her bank account during the same financial year. The learned CIT(A) has also simply upheld the findings of the Assessing Officer without assigning any reason why explanation furnished by the assessee regarding source of income for cash deposits found in her bank account was accepted in part, cannot be accepted for remaining cash deposits found in the same bank account. AO as well as CIT(A) were erred in assessing part of cash deposits as unexplained investments to be taxed u/s.69 and part of cash deposits as receipts from business liable to be taxed u/s.44AD - Hence, we direct the Assessing Officer to treat the total cash deposits found in her bank account maintained with Bank of India, West Mambalam branch as receipts from her civil contract business and estimate 8% net profit on total receipts as per the provisions of section 44AD - Appeal filed by the assessee is partly allowed. - I.T.A. Nos.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment and the same was furnished. Thereafter, the case has been selected for scrutiny and notices u/s.143(2) and 142(1) along with questionnaire were issued vide office letter dated 28.01.2015. In response, Authorized Representative appeared from time to time and filed various details called for. 4. During the course of assessment proceedings, the Assessing Officer noticed that assessee has maintained savings bank account vide no.802910110001466 with the Bank of India, West Mambalam branch and deposited huge cash on various dates amounting to ₹ 1,27,36,473/- and, therefore called upon the assessee to explain the source of income for cash deposits. The assessee vide letter dated 06.10.2015 has filed various details including cash flow statement and submitted that cash deposits found in her bank account was explained and source of such cash deposits were out of business receipts from civil contract work, interior decorations and has also an amount of ₹ 25.00 lakhs, being amount received from parties on cancellation of sale agreement. The Assessing Officer after taking note of various details filed by the assessee has accepted the assessee s explanation with regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 46A and also commented upon veracity of additional evidences filed in light of cash deposits found in her bank account. 6. The learned CIT(A), after considering relevant submissions and also taken note of various evidences filed by the assessee has admitted the additional evidences on the ground that when assessee could not filed certain evidences before the Assessing Officer, then the same can be filed before the appellate authority and the appellate authority having concurrent jurisdiction with the Assessing Officer can very well admit the additional evidences, if those evidences are relevant to decide the issues on merit and accordingly, admitted the additional evidences filed by the assesse. As regards additions made by the Assessing Officer towards cash deposits found with the bank account of the assesse, the learned CIT(A) observed that the Assessing Officer has arrived at peak credit out of the cash deposits found in her bank account after giving reasonable opportunity to the assessee to explain cash deposits with necessary evidences. When the assessee has failed to explain cash deposits found in her bank account through known source of income, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts emerge clearly indicate that the assessee has not disclosed her savings bank account maintained with Bank of India, West Mambalam branch. Further, when the case has been taken up for reassessment, the assessee has come out with explanation that cash deposits found in her bank account is out of contract receipts which was not disclosed to income-tax purpose, however, admitted before the Assessing Officer that net profit may be estimated by applying provisions of section 44AD of the Act. The Assessing Officer has accepted the explanation furnished by the assessee in part and accordingly divided cash deposits found in her bank account into two parts, i.e one from unexplained investments and the other from out of business receipts. Insofar as unexplained investments, the Assessing Officer has arrived at peak credit on a particular date and made addition u/s.69 of the Act as unexplained investments. The balance amount of cash deposits has been accepted as business receipts and has estimated 8% net profit by applying presumptive profit u/s.44AD of the Act. It was the contention of the assessee that once bank credit is accepted as turnover from her business on presumptive basis u/s.44A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Hence, we direct the Assessing Officer to treat the total cash deposits found in her bank account maintained with Bank of India, West Mambalam branch as receipts from her civil contract business and estimate 8% net profit on total receipts as per the provisions of section 44AD of the Act. In the result, the appeal filed by the assessee for the assessment year 2010-11 is partly allowed. ITA No.2716/Chny/2018(AY 2009-10): 11. The facts and issues involved in this appeal are identical to the issues considered in preceding paragraphs in ITA No.2717/Chny/2018 for the assessment year 2010-11. The slight difference in facts of this case is additions made by the Assessing Officer regarding cash deposits found in the bank account. For the impugned assessment year, the Assessing Officer has made additions towards total amount of cash deposits found in her bank account as unexplained investments u/s.69 of the Act. The learned CIT(A) by following his findings recorded for the assessment year 2010-11, has directed the Assessing Officer to make additions towards cash deposits found in her bank account by applying peak credit theory and for remaining balance amount found in her ban ..... X X X X Extracts X X X X X X X X Extracts X X X X
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