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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 ..... hat 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. As in the case of Commissioner of Income-tax, Rohtak v. Smt. Kamlesh [ 2013 (2) TMI 296 - PUNJAB AND HARYANA HIGH COURT] has held that where return of income filed by the assessee has been accepted and there was no finding that transactions entered into by assessee were not genuine, in such a case, no further amount could be made taxable. ITAT AMRITSAR in the case of SH. SATBIR SINGH BHULLAR [ 2023 (3) TMI 356 - ITAT AMRITSAR] has followed the same view that addition u/s 68 cannot be made in the absence of books of accounts. In the instant case, the AO has accepted the return of income filed u/s 44AD and has not given any finding that the transactions entered into by the assessee were not genuine. Further, the assessee is registered with the Jammu and Kashmir Shops Establishment Act 1966 and as such, there is no doubt regarding the business being carried out by the assessee. Therefore, the AO has erred in invoking provisions of section 68 while making the addition. From the reconciliation statement furnished by the assessee, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 appreciating the fact that the assessee was a small business man and had filed the return of income under section 44AD on presumptive taxation basis. That the provision of section 68 could not be applied where no books of accounts were maintained. 6. That the CT(A) has erred in confirming the addition made by the AO relying on incorrect fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds 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 documents for the purpose of filing of appeal against the order for the AY 2016-17 were lying in his possession. However, the assessee appointed new counsel for the purpose of pursuing matters before ITAT. That the delay in filing the appeal was primarily due to the fact that the old counsel CA Junaid Qadir failed to handover the documents in relation to the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 deposits of Rs. 9853000/-. 7. Being aggrieved with the assessment order, the assessee went in appeal before the Ld. CIT appeal who confirmed the addition made by the AO by observing as under: 7.1 The appellant has contended that he has furnished bank statements and Shop registration certificate to support his claims. No such annexures have been found uploaded with Form 35. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 representing a cycle of withdrawals and re-deposits which is placed on record. The learned counsel of the assessee vehemently reiterated that all the deposits and withdrawals were made in the course of business operations and that the cash available was sufficient to cover the cash deposits. In this regard the assessee placed on record cash book in annexure C and argued that the cash deposits were made out of legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, (Central)-II * v. Kulwant Rai O) CIT (APPEALS AMRITSAR) Appeal no.152/IT/CIT(A)/ASR/2010-11 Income Tax Offcer V. Raj Partap Singh Bajwa p) In the Income Tax Appellate Tribunal. Amritsar Bench ITA No.228 (ASR)1997 A.Y. 1993-94 Ashwani Aggarwal vs. Asstt. Commr. Of Income Tax 10. In ground No. 4 and 5, the learned AR challenged that the addition made by the AO on account of cash deposits u/s 68 was illegal and bad in law. The learned counsel submitted that the invocation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. 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 there was no finding that transactions entered into by assessee were not genuine, in such a case, no further amount could be made taxable. 14. In another case, the ITAT AMRITSAR in the case of SH. SATBIR SINGH BHULLAR VERSUS INCOME TAX OFFICER, (Supra) has followed the same view that addition u/s 68 cannot be made in the absence of books of accounts. In the instant case, the AO has accepted the return of income filed u/s 44AD and has not given any finding that the transactions entered into by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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