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TMI Blog2022 (8) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... f mobile recharging business is devoid of merit as he failed to furnish supporting evidences - assessee stated that looking to the fact that in the present case, there were repeated deposits and withdrawals from the bank account. Therefore, the AO should have worked out to peak credit of such transactions - assessee has also placed reliance on various case laws in the written submissions. Revenue could not controvert the fact that there has been frequent deposits and withdrawals by the assessee out of his saving bank account. No evidence is available on record suggesting that the money as withdrawn by the assessee was used for any other purpose. In the absence of such evidence prayer for adopting peak cannot be brushed aside. In the light of the binding precedents, we hereby direct the AO to work out peak credits and restrict the addition to the extent of peak credits and he would also allow telescoping under the facts and circumstances of the present case, as prayed by the assessee. This Ground of the assessee is allowed in terms indicated above. - ITA No.383/Asr/2019 - - - Dated:- 30-6-2022 - Shri Kul Bharat, Judicial Member For the Appellant : Shri Tarun Bansal, Adv. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the legality of the re-opening of the assessment. 7. Ld. Counsel for the assessee re-iterated the submissions as made in the written submissions. For the sake of clarity, the relevant contents of the written submissions of the assessee are reproduced as under:- 1. a) That the reasons were recorded by A.O on 09-03-2018 and in the reasons so recorded at point no. 2, the Ld. A.O says the cash deposit by assessee is Rs. 1548500 and at point no. 3, he says there is a cash deposit/transfer/interest of Rs. 1618605 and in his order at page-1, Para 1, he again says there is a cash deposit of Rs. 1618605 and at page 3, Para 2.5, he says there is a cash deposit of Rs. 1618605. So he negated the theory of transfer /interest in his order ultimately. b) That the Ld. A.O has not at all recorded his satisfaction in his order, that how he has derived a figure of Rs. 1548500 - in Para 2 of reasons so recorded and what was the ultimate relevancy of figure of Rs. 1548500 with Rs.1618605. The ld. AO was not clear in his mind regarding the break-up of figures, while recording the reasons. 2. That the Ld. A.O even has not mentioned the bank account number in the reasons so reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re just reversal of entries. c) So much so The Ld. A.O even added the credit received as transfer amounting to Rs.5000 on 29-04-2010, as a cash deposit in total figure of cash deposit of Rs. 1618605/-, as per his order. d) Further AO in his order added interest of Rs. 67 received on 30-06- 2010 and interest of Rs. 38 received dtd. 31-12-2010 respectively, totaling = Rs. 105 in a total cash deposit figure of Rs. 1618605/- hence the Ld. A.O included all the amount in cash deposit. Both the figures are appearing at page 59 68 respectively in the bank statement as enclosed. 8. The copy of reasons so recorded for initiating of proceedings is enclosed at page 4 to 6 . 9. A.O reopened the case purely on the basis of cash deposit 10. A.O recorded the reasons with wavering mind, no application of independent mind and is a case of borrowed satisfaction, as he tried to play between two figures being he was not sure, as which figure is correct. Following are the case laws which have been relied upon in favour of the above arguments:- A) Reopening purely on the basis of cash deposit is bad in law :- (Reasons recorded did not mentioned Bank a/c number- r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Asr/2016, enclosed at page 152 to 168 and reopening is bad-in-law. The same order at page-10 discussed case of Tralochan Singh Narotam Singh vs. ITO, ITA no. 306 307/Asr/2019 dated 30/06/2021 and approval is mechanical in nature and bad-in-law. 2) Ghanshyam vs. ITO (2018) 66 IT REP (ITAT, AGRA) (Enclosed at page 125 to 133) 3) Gorika Investment Exports P. Ltd. Vs ITO (2018) 66 IT REP 234 (ITAT, Del) (Enclosed at page 134 to 142) 4) Approval of CIT not indicating which material, information, documents etc. examined, approval is mechanical :- Dharmender Kumar vs. ITO (2019) 75 ITR (trib) (S.N.) 62 (Delhi) (enclosed at page to IM). 8. On the contrary, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below. He submitted that it is evident from the assessment record that the AO before initiating the re-opening of the assessment proceedings, provided adequate opportunities to explain the source of cash deposits. The assessee grossly failed to explain the source of cash deposits in his Saving Bank Account. Therefore, in the absence of explanation regarding source of cash deposits, the AO was just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t he is doing a business of mobile recharge. The revenue says he has not put on record the evidence that he was doing the business of mobile recharge. It was clearly explained that the appellant is now doing job and left mobile recharge business. Secondly, it is a very small business and not possible to have the evidence being it is just like doing a business on roadside. The revenue also could not brought on record that the appellant was not doing the business of mobile recharge and was doing something else. The net profit comes to Rs. 139094/- as per the Profit Loss A/c derived from the cash book as filed to A.O copy enclosed at page to 8 to 23. The assessee has shown income of Rs. 165764 while filing the return u/s 148, which is more than the profit shown and there is no loss of revenue and telescopic benefit has to be given to appellant. Alternative Plea If we assume that the appellant was not doing any business then the A.O can access the peak as per the cash book and not the whole deposit being the assessee has deposited, as well as, withdrawn the cash time and again from the bank account mainly the same day. The appellant has taken a mere opening balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16,18,605). These grounds of appeal are thus partly allowed. 14. From the above finding of Ld.CIT(A), it is evident that the addition is sustained on adhoc basis, on the ground that the assessee failed to support his claim regarding deposits and withdrawals were repeated for the purpose of showing higher income for VISA purposes. So far the contention of the assessee that the authorities below failed to appreciate the fact that the assessee was engaged in the business of mobile recharge is concerned even before this Tribunal, no evidence has been filed. It was incumbent upon the assessee to prove with documentary evidence about his business activities. In my considered view, business activity cannot be carried out in vacuum. He is required to prove payments made to service provider. Therefore, the contention of the assessee that he was engaged in the business of mobile recharging business is devoid of merit as he failed to furnish supporting evidences. Ld. Counsel for the assessee stated that looking to the fact that in the present case, there were repeated deposits and withdrawals from the bank account. Therefore, the AO should have worked out to peak credit of such transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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