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TMI Blog2015 (11) TMI 1904X X X X Extracts X X X X X X X X Extracts X X X X ..... dispose of these appeals by way of this common order. 2. To dispose of these appeals, we refer to the facts in case of Sri Kadigari Narasimha Reddy in ITA No. 581/Hyd/2013. 3. Briefly the facts of the case are that the assessee an individual, engaged in the business of civil construction and also partners in the M/s BVM Constructions filed his return of income declaring total income of Rs. 4,83,600, which includes remuneration of Rs. 3,00,000 and business profit of Rs. 3,01,920 declared u/s 44AD. 3.1 The main issue in this case is, AO noticed cash deposit of Rs. 31,04,179 into the bank M/s Karur Vysya Bank, which was treated as unexplained cash credit. The assessee was summoned u/s 131 and sworn statement was recorded on 28/12/2011. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. related to such contract works, by connecting such activity to the deposits but also failed to prove the same before the appellate authorities. No relevant information was filed before the CIT(Appeals) to indicate that the activity of contract works relate to the cash deposits, specially the cash deposits made into the bank account, referred above, except reiterating the theoretical explanations. 8.5 During the course of assessment proceedings the AO has questioned about the cash deficit statement of the appellant which was not elaborated in detail and time' was sought for explaining the same. The same stood unexplained during the appellate proceedings as well, inspite of the fact that certain details such as the details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such deficit/negative cash balance as on 09.03.2009 stood at Rs. 28,05,679/-. The entries of the account for few of the relevant days for the FY are as under: Date Particulars Op.balance Debit Credit Cl. Balance Remarks 8.3.09 Cash deposits in bank 994,321 950,000 44,321 8.3.09 -do- 44,321 950,000 (905,679) Rs. 9,05,679 has no reference 9.3.09 -do- (905,67 9) 950,000 (1,855,679) Rs. 9,50,000 has no reference 9.3.09 -od- (1,855,6 79) 950,000 (2,805,679) Rs. 9,50,000 has no reference Thus, it prove that there are no adequate receipts of business to the appellant during the year, to support the deposits, specially the cash deposits in the bank acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) with respect to furnishing of information before the AO and so also before him, is factually incorrect. The CIT(A) had conveniently twisted the facts to suit his convenience while giving above findings which are far from true." 6. Ld. AR submitted that the assessee is in the small civil construction business and not able to maintain books as well as able to maintain small contracts, which is practically difficult in this line of business. He submitted that the unexplained cash is nothing but the cash receipts from the civil construction business carried on by the assessee. Ld. AR also submitted that the CIT(A) was wrong in holding that the provisions of section 44AD would not apply when the cash deposit exceeds Rs. 40 lakh. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8.3 The statutes allows and gives benefits to the small business people like the assessee to estimate their income so that they fulfill the statutory obligation of taxation and they also enjoy the benefits like, they don't have to maintain books of account as stipulated u/s 44AA, they are not subject to payment of advance tax under the provisions of Chapter - XVII - C. 8.4 As far as the cash deposits in the bank are concerned, we have noticed that the assessee has gross receipts of Rs. 35,52,000/- from the construction business, which was not doubted by the tax authorities. In this line of business, contractors do get advances to execute the works undertaken by them. AO/CIT(A) had taken the cash deficit method to arrive the undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k statement is not the books of account. Not necessarily the gross receipts alone should be credited in the bank passbook, in the business, they also get advances for future contracts and assessee gets the benefit of doubt because of the small scale business and estimation of profit u/s 44AD. 9. In view of the above observations, we set aside the order of CIT(A) and allow the appeal of assessee. 9. In the result, appeal of assessee is allowed. ITA No. 582/Hyd/2013 10. As the facts and grounds in this appeal are materially identical to that of ITA No. 581/Hyd/2013, following the conclusions drawn therein we allow the appeal of the assessee. 11. In the result, both the appeals under consideration are allowed. Pronounced in the op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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