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TMI Blog2021 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... s before the learned CIT(A), therefore, the business activity is established. Further, there is no query either by the AO or by the learned CIT(A) regarding the utilization of the substantial withdrawals from the said bank account. CIT(A) was not justified in sustaining the addition made by the AO on account of cash deposits in the bank account. Since, the same AO in the subsequent assessment year has accepted the profit rate of 10.59% u/s 44AD of the Act, therefore, considering the totality of the facts of the case, I am of the considered opinion that adoption of net profit @ 11% on the total bank deposits will meet the ends of the justice. I hold and direct accordingly. Grounds raised by the assessee are accordingly partly allowed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said bank account. 3. The assessee sought adjournment and thereafter attended the proceedings without any documents. Since, on the last date of hearing, there was no compliance from the side of the assessee, the AO held that the assessee has no explanation for explaining the source of the cash deposits. He, therefore, made addition of ₹ 38,91,055/- to the total income of the assessee as unexplained money u/s 69A of the Act. 5. The AO further made addition of ₹ 2,313/- being interest from the savings bank account. Thus, the AO completed the assessment on the total income of the assessee at ₹ 38,93,368/-. 6. Before the learned CIT(A), it was argued that the assessee is an individual deriving income from small bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence whatsoever. He also examined the applicability of section 44AD and held that the same cannot be accepted. The theory of the peak credit was also rejected by the learned CIT(A). He accordingly upheld the action of the AO. 8. Aggrieved with such order of the learned CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- 1 That both the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147/143(3) of the Act were without jurisdiction and hence deserve to be quashed as such. 1.1 That since there was no specific relevant, reliable and tangible material on record to form a reason to believe that income of the appellant had escaped assessment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is misconceived, misplaced and not in accordance with law. 2.2 That the finding of the learned Commissioner of Income Tax (Appeals) that cash deposits and withdrawals were reflective of ongoing business activity is not substantiated by any corroborating documentary evidence in the nature of sale bills, purchase bills or ledger accounts of purchase or sales ' factually incorrect, is legally misconceived and wholly untenable. 2.3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that even assuming there was no business cash deposits were explained out of cash withdrawals and hence even otherwise addition made and sustained is untenable. 2.4 That further more the finding that theory of peak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceeds of the assessee, which are fully explainable. He accordingly submitted that the addition made by the AO and sustained by the learned CIT(A) is not justified. He also relied on various decisions. 10. The learned DR on the other hand heavily relied on the order of the learned CIT(A). 11. I have considered the rival arguments made by both the sides, perused the orders of the AO and the learned CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. I find the AO in the instant case made addition of 38,91,055/- u/s 69A of the Act as unexplained money on the ground that the assessee failed to substantiate the source of cash deposits of the above amount in the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale bills and the purchase bills before the learned CIT(A) to substantiate the sale and purchase. Further in the subsequent assessment year, the case of the assessee was re-opened on account of cash deposits of ₹ 16,12,224/- in Union Bank of India and the AO passed the order u/s 143(3) of the Act assessing the total income of the assessee at ₹ 1,70,800/- which comes to 10.59% of the total deposits. The relevant assessment order passed by the same Assessing Officer who has passed the order for the impugned assessment year reads as under:- 13. Since, the AO in the subsequent year has accepted the submission of the assessee that it is engaged in the business of hardware and tools, therefore, considering the totality of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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