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TMI Blog2021 (9) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of AIR information the Assessing Officer noted that assessee made cash deposit of Rs. 45.35 lakhs in savings bank account maintained with Axis Bank on various dates during the financial year 2009-11. The Ld. CIT(A) .Assessing Officer (AO) asked the explanation from the assessee vide notice dated 21.02.2017. No response was received by the AO from the assessee. The AO after taking necessary approval from range head (JCIT) issued notice under section 148 of the Act on 29.03.2017. In response to notice under section 148 of the Act, the assessee filed return on 28.08.2017 declaring income of Rs. 4.49 lakhs. The AO after serving statutory notice under section 143(2) and 142(1) of the Act proceeded for assessment. During the assessment, the assessee explained that he is engaged in wholesale, retail trading of cloth and garments. The assessee is also executed order for supply of garments worth of Rs. 38.68 lakhs of which profit was declared at 8% being Rs. 3.09 lakhs under the provision of section 44AD of the Act. Besides that the assesse has income from other sources by way of commission received from Fashion Shootings and interest form Sahara India. To substantiate his commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining working requirement, the AO treated the said amount as business receipt and worked out the profit @8%. In absence of any evidence the amount should have been added as unexplained deposit under section 69A of the Act. On the business receipt/deposit out of goods sold, the ld. Pr.CIT held that ld.AO has not verified the claim of business with supporting evidence. The ld. Pr.CIT held that on the aforesaid above lapses on the part of ld.AO the assessment order is erroneous and prejudicial to the interest of the Revenue. 4. The assessee filed its reply to the show cause notice under section 263. In the reply, the assessee contended that assessee made deposit of Rs. 45,37,605/- in Axis Bank Account and not Rs. 45,41,648/-. The difference of amount of Rs. 4,035/- is on account of that Rs. 3,981/- is direct credit to bank account from sales receipt and Rs. 51/- is for savings bank interest [3984 + 51 = 4035]. On the issue of capital of Rs. 6,69,521/-, the assessee explained that he is doing business from years together and cash deposit of Rs. 6,69,521/- was a justifiable amount with regard to his business standard. The AO treated the same as business receipt and added profit of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been made from cash sales of goods traded by assessee and remaining balance of Rs. 6,69,521/- made from out of capital accumulated since last several years. The AO after verifying and examination of facts, accepted the reply of the assessee with regard to deposit of Rs. 38,68,084/- on which the assessee has shown income of Rs. 3,09,474/-. The remaining cash of Rs. 6,69,521/- was treated as business receipt and the AO made presumptive addition @8% and thereby made addition of Rs. 53,562/-. The AO also made addition of Rs. 24,000/- on account of low household withdrawal. The addition made in the assessment, has been duly accepted and no further appeal is filed by assessee. 7. The ld.AR for the assessee submits that the AO made detailed discussion in the assessment order on the issue of cash deposit, commission income as well as on interest income before making addition of low household withdrawal. The AO passed assessment order after application of mind making adequate enquiry and took reasonable and plausible view, which is tenable as per law on correct appreciation of facts. The AO made 'adequate enquiry' and it is not a case of 'no enquiry'. The ld.AR submits that the ld. Pr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept on record after discussing with the assessee. The Assessing Officer explained that assessee is engaged of business of supplying building material and transportation. After considering the condition of assessee, the income declared by assessee was accepted. The Ld. PCIT revised the assessment order by taking view that no 'proper enquiry' was made by Assessing Officer about the nature and source of cash deposit of Rs. 14.48 lakh and that assessment order passed by Assessing Officer and in absence of proper verification, the Assessing Officer is erroneous and in so far as prejudicial to the interest of Revenue. The Assessing Officer was directed to make adequate enquiry with regard to genuineness of the business, source of cash deposits and credit entries. 10. We find that the Ld. PCIT has not specified as to what enquiry was required to be made. We further noted that the Ld. PCIT revised the order by taking view that the Assessing Officer made 'inadequate enquiry'. The Hon'ble Delhi High Court in the case of CIT vs., Sunbeam Auto Ltd. (supra) held that 'inadequacy of enquiry 'cannot be sufficient ground for taking action under section 263 of the Act. Admittedly, this case i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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