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TMI Blog2021 (6) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... ble with the parents who are very senior citizens to extend gift to their son. Therefore, gift of ₹ 1 lakh each by both the parents to the assessee under the facts and circumstances may be considered as reasonable to be explained as available to the assessee for deposit. Therefore, the claim of the assessee that he has received gifts from parents to the tune of ₹ 2,50,000/- is not accepted in full and gifts only to the tune of ₹ 2 lakh is accepted as explained for depositing in the bank account. So far as the cash available for deposit in the bank out of earlier withdrawals is concerned, here also the same is on estimation basis. An amount of ₹ 3,50,000/- may be accepted for earlier cash withdrawals eligible for re-deposit in the bank account as against ₹ 3,92,330/- since the assessee has estimated his personal withdrawals only for eight months. Thus, in effect, an amount of ₹ 1,42,330/- remains unexplained to be deposited in the bank account. Therefore, considering the totality of the facts of the case, I am of the considered opinion that an amount of ₹ 1,50,000/- on estimate basis is the unexplained cash deposited in the bank account w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts were not reflected in the original return of income, the AO made addition of ₹ 7,02,668/- (₹ 6,36,004/- + ₹ 66,664/-). 3.2 The AO further noted from the details filed by the assessee as per letter dated 25.11.2010 that the assessee has shown gross receipt from the business amounting to ₹ 7,08,320/-. He, therefore, adopted the gross receipt declared by the assessee as per the said letter and after allowing the expenses of ₹ 78,480/- claimed in the original return of income, determined the income from business at ₹ 6,29,840/-. Thus, the AO determined the total income of the assessee at ₹ 18,00,460/- as against the returned income of ₹ 1,07,216/- 4. Before the CIT(A), the assessee made elaborate submissions and filed various details based on which the ld.CIT(A) gave part relief to the assessee. So far as the addition of ₹ 6,29,840/- made by the AO is concerned, the ld. CIT(A) deleted the same by observing as under:- 6.1. The facts of the case and the written submissions of the appellant have been carefully considered. Ground No.1 of the appeal is against the addition of ₹ 7,08,320/- made by the AO in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 415 11415 Total Income 1,13,495 Less : Deduction u/s 80C (LIC Premium) 6,279 Net Income ₹ 1,07,216 6.2. The comparison of two computations of income clearly establishes that the reason behind showing business receipts at an odd figure of ₹ 7,08.320/- was specifically to tally the figure of Net Income of ₹ 1,07,216/-. As the appellant had omitted the short term capital gain of ₹ 66,664/- in his return; he reduced the business income from ₹ 1,02,080/- to ₹ 35,416/- in revised computation so that the net income remains unchanged at ₹ 1,07,216/-. The appellant has not offered any independent evidence that supports his claim at a later stage that his turnover was ₹ 7,08,320/- instead of ₹ 1,80,560/- originally declared by him. Using the provisions of section 44AF of the Act to his advantage and its application as a tool to partly cover the unexplained cash deposits in the bank account is not permissible by stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal, invalid and beyond the scope and powers vested in the learned Commissioner of Income Tax (appeals) u/s 251 of the Act: 2.1 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in making the said addition on factually incorrect, irrelevant and, extraneous considerations 2.2 That no show cause notice was issued by the learned Commissioner of Income Tax (Appeals) before enhancing the income and as such the enhancement is without jurisdiction. 2.3 That enhancement by the learned Commissioner of Income Tax (Appeals) in the impugned order has been otherwise made without granting fair and proper opportunity of being heard and as such, in violation of principles of natural justice and therefore, vitiated.` It is therefore, prayed that addition made by the learned Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals) may kindly be deleted and appeal of the appellant be allowed. It be further held that enhancement made by the learned Commissioner of Income Tax (Appeals) is in excess of jurisdiction. 7. The ld. counsel for the assessee strongly objected to the enhancement made by the CIT(A). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of deposits and, therefore, the explanation of the assessee should not have been rejected outright without conducting any further inquiry. He submitted that the gift of ₹ 2,50,000/- was received from both parents at ₹ 1,25,000/- each. The parents have given their confirmations. His father is a senior citizen aged 73 years and derives income from agriculture and ancestral land holdings. The land is situated at Fatehpuri Beri. The assessee had also enclosed Khatoni since 1984-85 which shows the landholding. So far as the opening cash of ₹ 2,50,256/- is concerned, he submitted that the assessee had substantial cash withdrawal from F.Y. 2006-07 and the cash balance is a result of both withdrawals and on account of the fact that he is carrying on the business of construction material where the receipts are in cash only. The assessee has also produced the cash book before the AO as well as the CIT(A). Therefore, without proper appreciation of the facts the ld.CIT(A) was not justified in enhancing the income of the assessee. He accordingly submitted that the addition enhanced by the CIT(A) should be deleted and the addition made by the AO also should be deleted. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its in the bank account and the assessee failed to file the cash flow statement as no cash book was stated to have been maintained. The ld.CIT(A), therefore, determined the unexplained cash deposit at ₹ 7,98,610/- as against ₹ 4,79,369/- determined by the AO on the ground that the assessee was unable to explain the source of cash deposit. It is the submission of the ld. Counsel that the cash so deposited was out of the opening cash balance of ₹ 2,50,256/-, gifts received from parents of ₹ 2,50,000/- and out of the receipt from supply of building materials, etc. 12. The ld. Counsel for the assessee filed the following reconciliation statement and submitted that if the above is considered, the total cash deficit comes to ₹ 1,66,850/-:- Particulars of Income As per AO As per CIT(A) Submissions of the appellant A) Business Income 7,08,320 1,80,560 Receipt from supply of building material 35,416 (5% of ₹ 7,08,320/-) Net Profit de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 Balance D = (B-C) ---- 3,92,330 E=(A-D) - 8,75,170 4 Benefit out of current year s receipt (F) - 7,08,320 5 Balance G=E-F - 1,66,850 13. So far as the difference of ₹ 1,66,850/- as derived above, it is his submission that the same is further explained by the opening cash balance of ₹ 2,56,256/- and gifts received from parents of ₹ 2,50,000/-. 13.1 I find some force in the above submissions made by the ld. Counsel. As mentioned earlier, the total cash deposit in the bank account is ₹ 12,67,500/-. The assessee explained to have made the deposit out of the current year receipt of ₹ 7,08,320/-, earlier cash withdrawal which is available for re-deposit in the bank account of ₹ 3,92,330/-, opening cash balance of ₹ 2,50,256/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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