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TMI Blog2024 (11) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the fact that the Ld. Assessing officer has erred in assessing the total income at Rs. 10373912/- against total income of Rs. 520912/- returned by the assessee. 3. That the CT(A)has erred in confirming the addition made by the AO without appreciating the fact that the Ld Assessing officer has erred in law and on facts in making an addition of Rs 1195000.00/- and Rs. 8658000/- on account of cash deposited in HDFC Bank account no 07241000043039 and 17391930006848 respectively without considering the availability of opening cash in hand and withdrawals from bank during the year. 4. That the Ld. CIT(A) has erred in confirming the addition of Rs. 985 000/- in respect of cash deposits in both the bank accounts without appreciating that the assessee was engaged in the business activity of retail trading of hardware and ceramics items and all the deposits were in connection with the said business. That the CIT(A) has erred in confirming the addition ignoring the fact that the payments appearing on the debit side were purely used for making purchase and not for any other purpose. 5. That the CIT(A) has erred in confirming the addition made by the AO u/s 68 without appreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming the penalty u/s 271(1)(C) in haste and without any cogent material on record to prove concealment of income. That the penalty has been confirmed ignoring the fact that the entire deposits in the bank account represent sales and the same has been accepted in other years. 6. That the appellant craves leave to add or amend any of the grounds of appeal before the appeal is finally heard or disposed off." 4. There was a delay of 33 days in filing the appeal. The appellant has filed the application for condonation with support of notarized affidavit of the previous council which reads as under: "1. This is in regard to delay in filing of appeal before the Hon'ble ITAT. It is very humbly submitted that in the above said appeal is being filed against the order passed by NFAC, Delhi on 19.02.2024.The said appeal was required to be filed within 60 days i.e. by 19.04.2024. 2. The present appeal is being filed before the Hon'ble ITAT Amritsar Bench after a delay of 32 days [Up to 21.05.2024] in filing of the appeal. It is pertinent to mention here that the legal matters in the case of the assessee were being handled by CA Junaid Qadir and the requisite docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee to the new counsels Sh. Virsain Aggarwal and CA Rohit Kapoor. The same constitutes sufficient cause as there was no negligence nor any deliberate or intentional act on the part of the appellant for the said delay in filing of appeal. We, therefore, condone the delay and admit the appeal for adjudication. 6. Briefly the facts of the case are that the case was selected for limited scrutiny under CASS to examine "Whether the cash deposit has been made from disclosed sources?" The appellant assessee has filed e-return on 16/05/2016 declaring total presumptive income of Rs. 5,20,912/- under section 44AD of the Income Tax Act. The assessee was engaged in business of trading in hardware and ceramics items through proprietorship concern M/s Muble Impex from Hyder Pora, Srinagar. The case was reopened on the basis of information obtained from HDFC bank, AL Rehman Shopping Complex, HS High Street, Srinagar in respect of cash amounting to Rs. 1195000/- deposited in HDFC saving bank account no 07241000043039 and Rs. 8658000/- in saving bank account no 17391930006848. The assessment was completed vide order passed u/s 144 on 12.12.2018 by making an addition of entire cash depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncil for the assessee has submitted that the Ld. CIT(A) has erred in not appreciating the fact that he had declared turnover of Rs. 6511400/- in the return of income filed u/s 44AD. The Learned council further argued that the CIT(A) erred in not appreciating that the AO made addition of entire cash deposits of Rs. 9853000/- which include contra entries transferred from one bank to another bank, cash withdrawal from bank amounting to Rs. 6517683/-. In this regard the assessee submitted reconciliation statement which is produced hereunder: - Total bank credit in 07241000043039 9386278 Total bank credit in 1739199300006848 14783908 Total Credits 24170186 Less Transfer from one bank to another bank as per annexure A enclosed (Please refer page no of PB 69-71, refer pages -7779987 Less: Rotation of cash as per annexure B attached at page no of PB 72-78 -6517683 Less: Amount received from sister concern M/s MubleImpexPvt Ltd -1880000 Less: Amount disclosed as turnover -6511400 Less amount recovered from opening debtors in bank -1481116 Nil 9.2 In support of the argument regarding rotation of funds, the learned AR presented a table marked as Annexure B represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore - Trib.) f) [2016] 76 taxmann.com 128 (Hyderabad - Trib.) IN THE ITAT HYDERABAD BENCH 'A' S. Venkat Reddy v. Income-tax Officer, Ward-8 (2), Hyderabad* g) [2013] 40 taxmann.com 533 (Andhra Pradesh) HIGH COURT OF ANDHRA PRADESH Commissioner of Income-tax -VI, Hyderabad v. Purushottam Jhawar* h) 2013] 38 taxmann.com 41 (Delhi - Trib.) IN THE ITAT DELHI BENCH 'F' Income-tax Officer, Ward -1 v. Pawan Kumar* i) 2017] 83 taxmann.com 243 (Chennai - Trib.) IN THE ITAT CHENNAI BENCH 'D' B. Jenson Thanaraj v. Assistant Commissioner of Income-tax, Company Circle 11(3), Chennai* ) [2004] 3 SOT 96 (RAJKOT) IN THE ITAT RAJKOT BENCH Income-tax Officer v. MaheshkumarJayantilalVora k) [2004] 141 TAXMAN555 (RAJ.) HIGH COURT OF RAJASTHAN Commissioner of Income-tax v. Ishwardass Mutha l) [2006] 99 ITD 227 (AHD.) IN THE ITAT AHMEDABAD BENCH 'C' Anand Autoride Ltd. v. Joint Commissioner of Income-tax (Asst.), SR-9 m) [2006] 157 TAXMAN 62 (MP) HIGH COURT OF MADHYA PRADESH, INDORE BENCH Mansukhlal Ratanlal Jain* (Chopra) v. Union of India n) [2007] 163 TAXMAN 585 (DELHI) IT APPEAL NO. 86 OF 2006 FEBRUARY 13, 2007 HIGH COURT OF DELHI Commissioner of Income-tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O has confirmed the addition in respect of said cash deposit in two banks u/s 68 of the Act. It is seen that the assessee has regularly been filing return of income u/s 44AD and is engaged in the retail business of trading in hardware and ceramics items in name of proprietorship concern M/s Muble Impex from Hyder Pora, Srinagar. 12. From the record, it is noted that the AO while passing the order has accepted the return of income filed u/s 44AD in ITR/e-return U/s 44AD of the Act, filed on 16/05/2016. The AR has raised legal grounds that addition made for cash deposit u/s 68 is liable to be quashed in the absence of books of accounts. It is a settled law that the provisions of section 68 of the Income Tax Act 1961 are only applicable where the assessee is maintaining books of accounts. From the record, it is very much evident that provisions of section 68 cannot be invoked in the present case where the assessee has filed the return u/s 44AD and not maintaining books of account. 13. The Hon'ble HIGH COURT OF PUNJAB AND HARYANA in the case of Commissioner of Income-tax, Rohtak v. Smt. Kamlesh (Supra) has held that where return of income filed by the assessee has been accepted and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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