9911796707
TMI Blog2022 (9) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961 (hereinafter also called `the Act'). 3. Briefly stated, the facts of the case are that the assessee is engaged in sale and purchase of gold and silver jewellery. He filed his return u/s.44AD declaring income @8% on sales of Rs.62.03 lakh. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee had maintained two bank accounts with HDFC Bank Ltd. outside the books of account. On being called upon to explain as to why the amounts of Rs.53,69,000/- and Rs.42,92,500/- deposited in these two bank accounts with numbers 0180150007680 and 01802020004158 be not added to the total income, the assessee submitted that these accounts were used for making purchases of jewellery from Amritsar and Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the transactions are in round figures. From a perusal of the two bank accounts, it can be seen that the assessee was regularly depositing and withdrawing the amount in/from the above said two bank accounts. In that scenario, the entire deposits cannot be added to the total income. It is only the peak balance from these two bank accounts individually, which can be subjected to tax. The addition for more than that can be justified only if the AO shows that the withdrawals from the bank accounts were used elsewhere. In the instant case, the AO has not made out such a case. In that view of the matter, it is only the peak balance in these two bank accounts which can be added to the total income of the assessee. 5. It is further seen that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 lakh for the year under consideration. It goes without saying that no business can be carried out without maintaining stock, more specifically if it is business of jewellery. Once the assessee has declared his income u/s.44AD and it is a no-account case, the AO cannot resort to the balance sheet filed by the assessee during the course of assessment proceedings to pick up the item of inventory of gold at Rs.22.84 lakh and make addition for the same. If that be the logic, then the AO will end up making addition for all the items of assets shown in the balance sheet, which is unfounded. We, therefore, order to delete the addition. 8. In the result, the appeal is partly allowed. Order pronounced in the Open Court on 21st day of September, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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