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TMI Blog2025 (2) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... rnate plea that the cash deposit may be considered as turnover and the presumptive percentage of 8% be applied to determine the profits of the business is also misleading. If it is considered that the entire cash deposit is coming out of business sales, then the assessee can no longer avail the benefit of section 44AD as he no longer remains engaged in the "eligible business" as per Explanation(b)(ii) of section 44AD of having a turnover of Rs 60 lakh being the threshold limit for the instant year. We hold that the assessee has failed to offer a satisfactory explanation with regard to the cash deposits. We therefore hold that the decision of the CIT(A) needs no interference and accordingly we sustain the addition u/s 68. Ground no 1,2 and 4 are dismissed. Addition of presumptive tax @ 8% - Assessee's father had a turnover ranging from Rs 51 lakh in FY 2011-12 to Rs 62 lakh in FY 2013- 14, therefore it may be plausible that some portion of cash belonging to the father may have been deposited in assessee's bank account. The balance cash deposit of Rs 28,14,676/- is explained as out of assessee's own capital cash savings, profit from business as also cash savings and business accru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal the ld. CIT(A) who after considering the facts and submissions, held that the amount of Rs. 78,00,000/- paid to TAHA Traders was out of funds deposited in cash just before transferring the amount to TAHA Traders. In absence of any details/documents regarding the genuineness of the huge payment, the ld. CIT(A) treated the same as unexplained cash credit and sustained the addition of Rs. 78,00,000/- u/s 68 of the Act. The CIT(A) also upheld addition of Rs. 2,25,174/- on account of profit over suppressed sale. 6. Now the further aggrieved assessee is in appeal before us. 7. Before us the ld counsel of the assessee submitted that the assessee is engaged in the business of vegetables and does not maintain any books of accounts. The ld AR of the assessee further submitted that the case is of limited scrutiny and provisions of section 144 of the Act are not applicable in his case. The ld AR reiterated that funds advanced to TAHA Traders of Rs 78,00,000/- was on account of purchases from T.A.H.A. Traders for past and future years. The ld AR argued that as per law under 44AD, the assessee is not required to maintain books of account and therefore the AO/CIT(A) reliance on balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any materials/documents/evidence to explain the source of cash deposit which was used to make advance to TAHA Traders which resulted in addition of the same under section 68. 12. We note that though the assessee claimed that he does not maintain books of account for the income tax purposes as the same is not required u/s 44AD, he produced balance sheet and profit & loss account as also the cash book before the AO. There is also a noting by the AO at para 4 of the assessment order that in the course of assessment proceedings, the assessee produced the cash book to explain the cash deposits in bank as follows: Debit for sale : Rs 53,93,700/- Debit for Loan : Rs 92,71,000/- Cash deposit out of loan : Rs 37,22,908/- 13. We further find that the AO accepted the sales proceeds of Rs 52,80,325/- for presumptive tax of 8% u/s 44AD. The AO also treated Rs 28,14,676/- [Rs 1,58,95,000/- - (Rs 78,00,000/- + Rs 52,80,325/-)] as part of turnover and levied a presumptive tax @ 8%. The AO, however, questioned Rs 78,00,000/- out of the debit for loan as the assessee could not explain the source of cash deposit. 14. The assessee has presented a legal argument before us, that the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,22,725/- hence his capital cash savings can at best be considered at Rs 6,22,725/. The assessee has stated that his father late Satanand Gupta had a sale of Rs 62.37 lakh and a profit of Rs 4,98,960/- in the AY 2014-15 and that his father sometimes used the bank account of the assessee. We find that the assessee has given an explanation, but to consider the same as source of cash deposit in assessee's bank account can not be held as satisfactory explanation as the same is without any support of any cogent documents/evidence. The assessee has claimed that sufficient time was not provided by the AO. We however, find that the CIT(A) gave adequate opportunity to the assessee to offer evidence regarding cash deposit of Rs 78,00,000/- just before transferring the fund to TAHA Traders. However, no further details to corroborate his submission were furnished before the CIT(A). Even before us no further evidence/documents were produced, apart from documents that were filed before the AO/CIT(A). 17. The assessee alternate plea that the cash deposit of Rs 78,00,000/- may be considered as turnover and the presumptive percentage of 8% be applied to determine the profits of the business is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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