TMI Blog2012 (5) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and argued by the Counsel that these are maintained by assessee on the basis of rough/katcha books where sales and purchases are recorded and these are strictly followed - Held that: the deposits and withdrawal are matching with the turnover for all the three assessment years and assessee has declared its income u/s. 44AF of the Act and moreover, the assessee's receipts has nexus with deposits, the deposits assessed by the lower authorities u/s. 69 and 69C of the Act is without any basis, hence deleted - Decided in favor of the assessee - ITA Nos. 854, 855 and 856/Kol/2010; - - - Dated:- 25-11-2011 - Mahavir Singh, C.D. Rao, JJ. Ananda Sen for the Appellant S.K. Malakar for the Respondent ORDER 1. These thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gic adopted to treat major part of bank deposit as unexplained was contrary to the accounting logic and principle and the resultant addition made was thus unsustainable. 4. That, on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not giving, at least, one specific opportunity to the appellant to explain the nature and source of bank deposit and erred in upholding addition of alleged unexplained bank deposit without allowing reasonable and sufficient opportunity to the appellant to explain the same. 5. That, on the fact and in the circumstances of the case, Ld. CIT(A) failed to invoke his power of enquiry u/s. 250(4) either on his own or through remand to the A.O. for proper and comprehensive enquiry on guidel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .40.00 lakhs is being covered under deeming provisions of Section 44AF of the Act, which is on the basis of katcha books. The assessee prepared profit and loss account, Balance Sheet and Trading Account and also noted turnover calculated on the basis of these katcha books. The turn over and other details for these three assessment years are as under:- Sl. No. Assessment Year Turnover 5% of turnover Returned income Assessed income 1. 2003-04 Rs.8,01,748 (Pg 5 of PB) Rs.40,087 Rs.78,550 (Pg. 3 of PB) Rs.1,51,170 (Pg 35 of PB) 2. 2005-06 Rs.15,02,382 (Pg 4 of PB) Rs.75,114 Rs.1,19,600 (Pg 3 of PB) Rs.15,31,800 (Pg 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not readily traceable in spite of thorough search even though assessee made maximum possible effort to give as much detail as possible. Even details of cheques deposits are not available from the bank inspite of request for both the assessment years 2005-06 and 2006-07. Further from memory, assessee has been able to trace out the following cash deposits out of the bank statements, the name and address of the respective payers, whose payments were directly deposited into bank are given below. Sl. No. Date of deposit by the assessee in the bank account Amount (Rs.) Name and address of the payer 1. 10.05.2002 45000.00 Surojit Sen, No.3, Chandigarh Madhyamgram 2. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there is no nexus with that of receipts of sales or purchases with that of deposits made in bank by assessee. Accordingly, we are of the view that, there is no scope to make such addition either under section 69C or under section 69 of the Act as has been done by the Assessing Officer and CIT(A). Even otherwise, this view of ours is supported by Hon'ble Punjab and Haryana High Court in the case of CIT vs. Surinder Pal Anand [2011] 242 CTR 61 (PandH), wherein the ratio laid down is that where assessment being made us 44AB of the Act, assessee is not under obligation to explain individual entry of cash deposit in the banks unless such entries had no nexus with the gross receipts and, therefore, Hon'ble Punjab and Haryana High Court rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id amount of Rs.14,95,300 was on account of business receipts had been accepted. Learned counsel for the appellant with reference to any material on record, could not show that the cash deposits amounting to Rs.14,95,300 were unexplained or undisclosed income of the assessee." 7. In view of the above facts that the deposits and withdrawal are matching with the turnover for all the three assessment years and assessee has declared its income u/s. 44AF of the Act and moreover, the assessee's receipts has nexus with deposits, the deposits assessed by the lower authorities u/s. 69 and 69C of the Act is without any basis, hence deleted. Even otherwise, the issue is supported by the decision of Hon'ble Punjab and Haryana High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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