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TMI Blog2018 (2) TMI 2092X X X X Extracts X X X X X X X X Extracts X X X X ..... ral income of Rs. 1,87,400/- was filed on 25th Nov, 2009. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 31st August, 2010. During the course of assessment proceedings, the assessing officer observed that assessee had maintained bank a/c. no. 07280150021 with ICICI bank Ltd which was not reflected in the books of account. In the aforesaid undisclosed bank a/c. there was a cash deposit of Rs. 40,04,610/- on various dates. The assessing officer has further noticed that assessee was also maintaining saving bank a/c. no. 0614 with Rajkot Commercial Co-operative Bank which was reflected in the books of accounts and an aggregate cash of Rs. 38,57,000/- was also deposited in this account. Thereafter, during the course of assessment proceedings, the asssessee has filed an revised financial statement on 10th August, 2011 showing income from other sources of Rs. 36,04,880/- along with loss from share trading of Rs. 36,34,642/-. During the course of assessment proceedings, the assessee has also submitted along with his statement dated 24th August, 2011 that he has been engaged in the business of trading on electrical motor and floor- mill kit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is accepted. There is no objection in law to allow set-off of one against income from other. Ground No. 3 : The A.O. may kindly be directed to allow set-off of loss from share business against other business income. 8.2 Both these grounds are being adjudicated together for the sake of convenience. In this case, the return of income was filed showing income of Rs.1,47,590/- and agriculture income of Rs. 1,87,400/. During the course of assessment proceedings, the A.O. observed that the appellant was having an account with ICICI Bank which was not reflected in his hooks of accounts. There were cash deposits of Rs.38,57,000/- in the hank account. When asked to explain the source of the cash deposits, the appellant filed a revised financial statement showing income from other sources of Rs.36.04.880/- and loss of share trading of Rs.36,34,642/-. Vide his letter dt. 05/ 12/2011, the appellant contended that the profit can be computed at Rs.28,67,612/- a 67.22% of the cash deposits Rs.42,62,010/-. However, the appellant himself had offered Rs.36,04,879/- as income from business of miscellaneous job work. The A.O. accepted the contention of the appellant and treated Rs.36,04,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant at Rs.40,53,788/- which included Rs.1,47,590/- as per return of income. Rs.36,04,879/- as income from undisclosed bank account and Rs.2,52,121/- as income from RCC Bank account. The main finding of the A.O. was that there were cash deposits of Rs.42,66,010/- in the ICICI Bank Account. The appellant had contended this to be income from job work and had offered an income of Rs.36,04,879/- from the same at the rate of 67.22%. The appellant had another bank account with RCC Bank in which there were cash' deposits of Rs.38,57,000/-. The appellant contended that cash deposits were out of the profits of the income from job work. The A.O. accepted this contention. 8.7 On careful scrutiny. I find that the contention of the appellant and the acceptance of the same by the A.O. to be incorrect. This is because the appellant has already offered income from the cash deposits in the ICICI Bank being by way of income out of job work. In other words, the deposits in the ICICI Bank account were set off against the withdrawals from the same and the net profit offered for taxation. The question of the profit from the job work income being deposited in the RCC Bank account is like claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quested to show cause as to why the entire cash deposits in RCC Bank account should not be treated as income from undisclosed sources. The hearing in your case is fixed on 28/3/2014 at 1:00 pm. In case no reply is submitted on the stipulated date, the appeal will be decided on merits. " It is therefore held that the appellant had nothing to contend in this matter. 8.9 In light of the above findings, the entire cash deposits of Rs.38,57,000/- in the RCC Bank account are held as income of the appellant from undisclosed sources. The A.O. has already computed Rs.2,51,121/- as part of its income. Therefore, the undisclosed income from RCC Bank account is computed at Rs.36,04,879/-. The total assessed income of the appellant is Rs.40,53,788/-. This stands enhanced by Rs.36,04,879/-. The total income of the appellant is hereby computed at Rs.76,58,669/-. 8.10 The second issue now required to he considered is whether the loss from share and F & O trading can he set off against the income of the appellant computed as above. The appellant has incurred a loss of Rs.20,79,878/- from BSE trading transactions, loss of Rs. 15,87,159/- from Futures & Options. The appellant had claimed a net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of assessment proceedings, the assessing officer noticed that cash was deposited in two bank accounts of the assessee as elaborated above in this order. During the course of assessment proceedings the assessing officer had detected aforesaid undisclosed bank account with the ICICI bank in which cash was deposited by the assessee. Consequently, the assessee has come forward and filed revised return of income by showing profit from job work of Rs. 36,04,879/-. He has also claimed share loss of Rs. 36,34,642/- and its set off against the income . After considering the above facts we observe that assessee had offered income of Rs. 36,04,879/- @ 67.22% as job work out of the undisclosed cash deposit of Rs. 42,66,010/- maintained with the ICICI bank a/c. During the course of appellate proceedings before he ld. CIT(A), the assessee explained that cash deposit of Rs. 38,57,000/- found in the Rajkot Commercial Co-operative Bank was out of the profit earned from job work. In this connection, the ld. CIT(A) noticed that assessing officer has incorrectly accepted the contention of the assesse because the assessee has already offered income from cash deposit in the ICICI bank by way of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot his account audited u/s. 44AB of the act as the turn-over of the assessee was exceeding Rs. 40 lacs during the previous year. During the course of penalty proceedings, the assessee has explained that as no books of accounts were maintained therefore it was totally impossible to ask the auditor to audit the books and furnished audit report. The assessing officer has not accepted the explanation of the assessee on the ground that in his revised financial statement during the course of assessment proceedings, the asssessee has disclosed profit of Rs. 36,04,879/- and turnover of Rs. 6,98,58,295/- in share trading business. Consequently, the assessing officer has levied penalty of Rs. 1,00,000/- as per the provision of section 271B of the act for committing default u/s. 44AB of the act. 8. Aggrieved assessee filed appeal before the ld. CIT(A) who has sustained the penalty levied by the assessing officer by observing as under:- "5.0 I have carefully considered the contention of the appellant, the assessment order and the penalty order. There is no dispute about the total turnover of the appellant which has been quantified by the A.O. correctly at Rs.7,43.14.480/-. The turnover incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this order., Thereafter, the assessee has filed revised return of income on 10th August, 2011 disclosing net profit after taking into account the undisclosed cash deposit found in the ICICI bank a/c. The income disclosed in the revised financial statement during the course of scrutiny assessment was not disclosed in the regular books of accounts. It is also undisputed fact that assessee has not maintained account in its books of accounts pertaining to share transactions carried out during the year under consideration. He has also not disclosed jot work income in the books of accounts. After considering the above facts and circumstances, we observe that separate penalty has been provided as per the provisions of section 271A for failure to keep, maintain or retain books of account, documents, etc. as required by section 44AA of the act. In view of the above, the assessee has violated the provision of section 44AA by not maintaining books of accounts and the assessing officer has not initiated any penalty as prescribed u/s. 271A of the act. We observe that section 271B is not attracted in a case where no account has been maintained and instead an recourse u/s. 271A can be taken. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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