9911796707
TMI Blog2024 (9) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of documentary evidence, it can be reasonably presumed that the cash deposits could be from unaccounted sales from the business which the assessee had not disclosed in the return of income. As relying on JAYESH JAGAT PAREKH VERSUS INCOME TAX OFFICER 34 (2) (1) , MUMBAI [ 2024 (8) TMI 1361 - ITAT MUMBAI] we direct the AO to restrict the addition to 8% of the addition made u/s 69A of the Act. As a result, grounds raised in assessee s appeal are partly allowed. - Shri Sandeep Singh Karhail, Judicial Member And Smt. Renu Jauhri, Accountant Member For the Assessee : Shri. Himanshu Gandhi For the Revenue : Shri R.R. Makwana, Sr. DR ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f reselling ladies dress materials. On the basis of the information received on I-Tax Net that the assessee has deposited cash in saving bank account and made time deposit amounting to Rs. 10,39,700/- and 10,39,700/- respectively, proceedings u/s 147 of the Act were initiated to verify the same, since the assessee also did not file any return of income for the year under consideration. In response to the notice issued u/s 148 of the Act, the assessee filed her return of income on 11/10/2018 declaring a total income of Rs. 1,89,950. In response to notices u/s 143(2) as well as u/s 142(1) of the Act, the assessee submitted a letter of authority, capital account and balance sheet. However, since no details of cash deposits were furnished by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payments made towards the purchase of materials for her business. Accordingly, the learned Addl./Joint CIT(A) dismissed the appeal filed by the assessee. Being aggrieved, the assessee is in appeal before us. 5. We have considered the submissions of both sides and perused material available on record. In the present case, the assessee claims to be engaged in reselling ladies' dress materials and sarees. As per the assessee, she carries out the business described above from her home and there is no formal shop and establishment. Further, there are no employees as family members were helping her in the business. As per the assessee, she purchases from various wholesalers/retailers on a weekly basis on JANGAD basis (Sale on Approval Basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that if there is relevant material on the basis of which a reasonable person can form a requisite belief that income chargeable to tax has escaped assessment, then proceedings u/s 147 of the Act can be validly initiated. As a result, we find no infirmity in the reassessment proceedings initiated by the AO u/s 147 of the Act. Accordingly, ground no.1 raised in assessee s appeal is dismissed. 7. During the hearing, the learned AR placed reliance upon the decision of the Co-ordinate Bench in Jayesh Jagat Parekh Vs ITO, in ITA No. 758/Mum/2024. We find that in the aforesaid decision, vide order dated 28/06/2024, in a similar factual matrix of cash deposits in the bank account of a taxpayer who was engaged in the business of retail sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess than Rs. 2,000/- per piece. Thus, it would be better to apply net profit rate of 8% on these unaccounted sales of Rs. 32,00,000/- which works out to Rs. 2,56,000/-. Thus, the addition is restricted to Rs. 2,56,000/- as against addition of Rs. 32,00,000/- made by the ld. AO. The reason for adopting the net profit rate of cash deposit is that assessee does not have any source of income or has made any investment and is only involved in petty retail business. Thus, it cannot be held that assessee had some other unexplained cash from some other sources. Accordingly, the addition is sustained on the basis of application of net profit of 8% on cash deposits as the same is treated as income from business and profession and not to be taxed u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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