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TMI Blog2024 (5) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of each case. But for making addition of entire cash deposits when the debit entries are also there, in our considered view such action by AO would not be justified. The assessee is not in appeal before us, nor any representation is made on his behalf. CIT DR could not controvert the finding of Ld.CIT(A) that the Investigation Wing had reported about the business activity carried out by the assessee. It is not the case where the Ld.CIT(A) had returned finding without having supporting material. The contention of DR that there was no business activity by the assessee is contrary to records. We therefore, do not see any reason for disturbing and/or reversing the finding of Ld.CIT(A). The grounds raised by the Revenue lacks merit hence, dismissed. - Shri Kul Bharat, Judicial Member And Dr. B.R.R. Kumar, Accountant Member For the Appellant : Shri A. K. Sinha, CIT. DR For the Respondent : None ORDER PER KUL BHARAT, JM : These two appeals filed by the Revenue are directed against the common order passed by Ld.CIT(A)-, Rohtak, both dated 18.12.2019 for the assessment years 2008-09 2009-10 respectively. Since the similar grounds have been raised, both the appeals of the assessee ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as business receipts and applied net profit @ 8%. 7. Aggrieved against the order of Ld.CIT(A), the Revenue is now in appeal before this Tribunal. 8. Apropos to the grounds of appeal, Ld.CIT DR for the Revenue supported the assessment order and submitted that Ld.CIT(A) grossly erred in reducing the addition by applying the provision of section 44AD of the Income Tax Act, 1961 ( the Act ). He submitted that the provision of section 44AD of the Act is not applicable under the facts of the present case. He contended that the assessee has not filed any Income Tax Return. No such claim was made before the Ld.CIT(A). Hence, the Ld.CIT(A) grossly erred in presuming the cash deposits as business receipt of the assessee. 9. We have heard Ld. CIT DR for the Revenue and perused the material available on record and gone through the orders of the authorities below. Ld.CIT(A) has decided the issue by observing as under:- 6.2. I have carefully considered the facts of the case, assessee's submissions, assessment order and find that: 6.2.1 During the appellate proceedings the assessee has submitted that addition should not be made of the entire deposits and only profit from business or peak cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may be given is without any basis. Considering the facts of the case and huge cash deposits it is held that if this was out of business activity, the audited books of account should have been submitted for verification during the appellate proceedings to substantiate his claim. In the absence of any documentary evidence and as no books of accounts have been maintained, the assessee's contention that .83% profit may be applied is not acceptable. However, in view of principle of natural justice the entire receipts/deposits are not treated as undisclosed income as the report of DDIT (Inv.) and material on record shows that assessee was doing business activity, so net profit @8% (as per section 44AD of the Act) is applied and addition of Rs. 35,76,000/- is made on the total cash deposits of Rs. 4.47 crores. This ground of appeal is partly allowed. 6.2.5 The burden of proof regarding the cash deposits is on the assessee both in the case of cash credit and money deposited in the bank account, as held in the following decisions- The Supreme Court in the cases of Roshan Di Hatti v. CIT (1977) 107 ITR 938 (SC) and Kale Khan Mohammad Hanif v. CIT [1963) 50 ITR 1 (SC) held that the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ean that the entire investments has to be considered axing authority when an explanation is offered by the assessee. The Calcutta High Court in the case of C. Kant Co. v. CIT [1980] 126 ITR 63 (Cal.) held that in the case of cash credit entry it is necessary for the assessee to prove not only the identity of the creditors but also to prove the capacity of the creditors to advance the money and the genuineness of the transactions. On whom the onus of proof lies in a particular case is a question of law. But whether the onus has been discharged in a particular case is a question of fact, In the present case the onus to establish the source of money deposited (Rs 10 lacs) has not been discharged by the assessee. On this issue, reliance is also placed on the following case laws: Commissioner Of Income-Tax. vs P. Mohanakala. 291 ITR 278(SC); Sethi Cotton Traders 286 ITR 548(P H) HELD- A perusal of the concurrent findings recorded by all the authorities below reveals that it is a case where the assessee was unable to prove the genuineness of the credit standing in the name of Sh. Surinder Kumar. The assessee was further unable to pro e not only his capacity but also identifiable source t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 44AD of the Act. The assessee had prayed for peak credits be taken as income of the assessee since there were both deposits and withdrawals from bank accounts during the year. However, the Ld.CIT DR urged for treating the entire cash deposits in the bank account as undisclosed income of the assessee without giving set off of cash withdrawal made during the year. We are unable to accept this submission of Ld.CIT DR. In this regard, the law is well-settled that if there are both credit and debit entries in the bank account of the assessee, in that event peak credit may be taken as undisclosed income considering the facts of each case. But for making addition of entire cash deposits when the debit entries are also there, in our considered view such action by AO would not be justified. The assessee is not in appeal before us, nor any representation is made on his behalf. Moreover, Ld.CIT DR could not controvert the finding of Ld.CIT(A) that the Investigation Wing had reported about the business activity carried out by the assessee. It is not the case where the Ld.CIT(A) had returned finding without having supporting material. The contention of Ld. DR that there was no business ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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