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TMI Blog2018 (2) TMI 2124X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) to the AO for his comment. During the remand proceedings, the assessee again made detailed submissions before the AO. In the remand report, the AO did not bring out any new fact, nor commented anything specific against the assessee. Rather, on ground wise specific submissions, the AO's comments were that no new fact had been brought on record, the cases relied by the assessee were in his favour and it was for the ld. CIT(A) to decide the issues on the facts available on record. If the provisions invoked are held to be non applicable, the very charge for making the addition does not survive and it cannot be converted to that of another entirely different provision. Section 69 of the Act concerns cases where the assessee had made investments which are not recorded in the books of account, if any, maintained by him for any source of income and the assessee offers no explanation about the nature and source of the investments, or the explanation offered by him is not, in the opinion of the AO, satisfactory. In the present case, the assessee is not shown to have made any investment and, therefore, the provisions of section 69 of the Act are not attracted. Applicability of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearing of cheque. Further, along with the revised estimated balance sheet, the assessee also furnished confirmations from his father, mother and other lenders. If the AO wanted to verify the credits in the revised balance sheet, which were supported by confirmations, he could have easily exercised his powers either u/s 133 (6), or u/s 131. But he did not do so and simply made the additions on the basis of first estimated balance sheet, which, as observed, is unsustainable in law. Assessee appeal allowed. - SHRI A. D. JAIN, JUDICIAL MEMBER For the Assessee : Shri Mahesh Agarwal, AR For the Revenue : Shri Waseem Arshad, Sr.DR. ORDER This is assessee s appeal for assessment year 2006-07. The revised grounds taken are as follows: 1. That having regard to the facts and circumstances of the case and in law the Ld CIT(Appeals) has erred in confirming the addition of Rs.1,75,000/- made by the AO U/s 69 of the Act in respect of alleged deposit from Smt Usha Malhotra. 28.02.2018 2. That having regard to the facts and circumstances of the case and in law the Ld CIT(Appeals) has erred in confirming the addition of Rs.5,16,000/- made by the AO U/s 69 of the Act in respect of alleged deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled. Similarly, in respect of the assessee s father, Shri Mahesh Malhotra, the AO observed that since the assessee had not given the basis for change/ modification in the revised balance sheet, change in the loan amount of his father could not be accepted. Finally, the AO made addition of Rs.4,29,356/- towards the opening capital, Rs. 1,75,000/- towards the unsecured loan from the mother, Smt. Usha Gupta and Rs. 5,16,000/- towards the unsecured loan from the father, Shri Mahesh Malhotra, treating them as unexplained cash credits u/s 69 of the Act. 4. The AO also made an addition of Rs.5,62,000/- U/s 69 of the Act towards wages and other expenses payable, on the ground that it was shown in the first balance sheet filed, which changed to Rs. 10,66,200/- in the revised balance sheet and the assessee did not furnish any evidence for such revision. 5. Before the ld. CIT(A), the assessee challenged all the additions. It was submitted that the additions made u/s 69 of the Act were wrong and illegal; that any addition u/s 68/69 was possible only when the books of account are maintained, but the assessee did not maintain any books, being covered under the presumptive scheme of taxation u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce sheet (estimate). 9. The ld. DR has placed strong reliance on the impugned order. The following case laws have also been relied on: i. ACIT vs. Shri Jatinder Manchanda , ITA No.4060/Del/2011(ITAT-Del). ii. Rajmandir Estates P. Ltd. vs. Principal CIT , GA No. 509 of 2016 with ITAT No. 113 of 2016 (Calcutta-High Court). iii. M/s Pragati Financial Management Pvt. Ltd vs. CIT-II , ITAT 178 of 2016, GA 997 of 2016 (Calcutta High Court). iv. CIT vs. M/s Gagandeep Infrastructure Pvt. Ltd , ITA No.1613 of 2014 (Bombay High Court). v. CIT vs. M/s Navodaya Castles Pvt. , ITA No. 320/2012 (Delhi High Court). vi. Deniel Merchants P. Ltd. vs. ITO , (SC). Vii. ITO vs. Babu Lal Jain , 116 TTJ Jab 741 (ITATJabalpur). viii. Dy. CIT vs. Vishwanath Prasad Gupta , 129 ITD 95, (ITA No. 220/Jab/2008 ITAT-Jabalpur. ix. State of Gujarat vs. Gordhandas Keshavji Gandhi , AIR 1962 Guj. 128-(Guj. High Court). 10. I have heard the parties and have perused the material on record. It is seen that as correctly contended, the impugned additions were made by the AO for the credits shown in the balance sheet, holding them to be unexplained cash credits . Sec. 69 is applicable to unexplained investment and not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, since the assessee's gross receipts were below Rs.40 lac, he has not been shown to maintain any books. The ld. CIT(A)'s observation in para 4.1.4 of his order, that there is no proposition in law for non maintenance of accounts for cases falling u/s 44AD, is incorrect. The provisions of sub section 5 of Sec. 44AD read with those of Sec. 44AA (2)(iv) statutorily mandate the maintaining of books of account for the cases filling u/s 44AD only when the net profit is less than 8%. In other words, where the case is covered by Sec 44AD, i.e., where the turnover is below Rs. 40 lacs and the declared net profit is 8% or more, no books of account are required to be maintained. 14. The fact of non maintenance of books of account by the assessee was also in the knowledge of the AO, obviously, as he did not at all call for the books of account either through the notice u/s 142(1), or through the order sheet. 15. The ld. CIT(A)'s observation regarding probable maintenance of accounts, is nothing but a mere surmise and conjecture. Appearance of the Accountant or the Chartered Accountant before the AO does not establish that books were actually maintained by the assessee. As a ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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