TMI Blog2012 (10) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the AO. Thus the authorities were justified in proceeding to make best judgment in terms of provisions of sec. 144 of the Act in view of persistence non-compliance of the notices over a period of one yea - against assessee. Before the AO assessee did not put forth any explanation nor furnished any evidence regarding the source of such cash. On appeal,, the assessee pleaded that deposits and withdrawals in the said bank account ,related to his business however, the assessee did not place any evidence before the AO or the CIT(A),establishing nexus of cash deposited in the bank with his receipts from business. Whether the entire turnover in cash was deposited in the bank, has not been established by the assessee. The onus is on the assesseee to establish that the cash deposited in the bank ,originated from his turnover of the business. In these circumstances when the complete facts are not present it fair and appropriate to vacate the findings of the CIT(A) and restore the matter to the file of the AO with the directions to allow one final opportunity to the assessee to establish the nexus of his business receipts with cash deposited in the bank as also to explain the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), was selected for scrutiny with the service of a notice u/s 143(2) of the Act. None responded to this notice. In this case, the Assessing Officer[AO in short] received an AIR information that the assessee deposited cash of Rs.Rs.12,99,850/- in his saving bank account maintained with Centurion Bank of Punjab Ltd., East Patel Nagar Market, New Delhi during the year under consideration. A copy of AIR information was sent to the assessee with the request to furnish the sources of cash deposited in the aforesaid bank a/c along with documentary evidence. None appeared on the scheduled date of hearing in response to the notice dated 26th June, 2009 25th September, 2009. Subsequently, in response to a show cause notice dated 14.10.2009 issued u/s 271(1)(b) of the Act, the assessee appeared before the AO. Inter alia, he was requested to furnish details as per order-sheet entry dated 22nd October, 2009 by 28.10.2009. None appeared on this date of hearing nor any adjournment was sought and nor even any written reply filed. A subsequent show cause notice dated 27.11.2009 also remained uncomplied with. In these circumstances, the AO proceeded to complete the assessment u/s 144 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as per the return submitted by the appellant. Therefore, this ground of appeal holds no merit and hence the same is dismissed. 3.1 As regards addition u/s 68 of the Act, the ld. CIT(A) concluded as under:- 5.2.2. I have gone through the facts of the case. On perusal of the computation of income filed by the appellant, it is seen that the appellant declared income from business u/s 44AF amounting to Rs.1,25,250/- on the gross turnover of Rs.9,56,780/- from his business concern namely, M/s Car Cute. After deduction under chapter VIA (LIC u/s 80C) for an amount of Rs.13,252/-, the income was shown at 1,11,998/-. Section 44AF of the Income-tax Act details with special provisions for computing profit and gains of retail business. According to section 44AF, if an assessee is engaged in retail trade in any goods for merchandise, a sum equal to 5% or more of the total turnover in the previous year is declared on account of such business, such income shall be deemed to be the profits and gains of such business and is chargeable to tax under the head 'profits and gains of business or profession'. According to sub-section 4 of this section an assessee is also not liable to maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained/undisclosed income of the assessee. In rejoinder dated 1.11.2011, the AR admitted the following:- "The assessee stated that the SB A/c. with the Centurion Bank of Punjab Ltd. in which deposits and withdrawals had been made related to his business and that from the perusal of the said bank statement, it will be seen that there are regular deposits and withdrawals in the said bank account and that the credit balance on various dates during the financial year 2006-07 has not been much and that the deposits in the bank account are from the sale proceeds of the retail business and out of earlier withdrawals made but not utilized. The assessee has also filed an affidavit to this effect and also filed copies of some purchase bills and electricity bills in the name of Smt. Prem Kaur. The assessee has not filed any other evidence having been asked to do so vide office letter dated 11.1.2011 nor the details or evidence regarding source of cash deposits on various dates has been filed. The date of cash withdrawals and purpose thereof the date and amount of redeposit of remaining cash and deposit out of cash sales have not been furnished by the assessee. In addition to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice dated 19.11.2009 was issued to the appellant affording him one last opportunity of being heard and to furnish requisite details on 27.11.2009 and with the clear indication that in case of failure to comply to furnish such details, it would be presumed that the appellant had nothing to say and the matter would be decided exparte on merits and on the basis of information available on record. It is very surprising to note that the appellant fell ill only on the dates those were given by the Assessing Officer for furnishing the details. It is also said with conviction that the medical report is a manipulated one because the doctor under whose supervision the appellant was undergoing treatment is not connected with the ailments that the appellant is supposed to be suffering with. A cardiologist cannot treat a person who is suffering with depression, as he is a specialist looking after heart problems. Hypertension, no doubt affects a person's health, but it is not a disease that prevented the appellant to engage an AR who would in turn appear before the Assessing Officer and explain the source of such deposits. Similarly, an uncontrolled diabetes needs hospitalization and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, the assessee cannot be asked to produce the books of account, but at the very same time, it is found that huge cash has been deposited in the bank, at least primary evidence of receipt of such amount of cash out of sale proceeds in the trading account is required to be shown." In the present case, furnishing of purchase bills etc. in the name of Smt. Prem Kaur has not been supported by related documentary evidence like, delivery slips or cash receipts etc. A detailed observation has been discussed in the paragraph supra at ground no.-2. In view of this discussion, the addition of Rs.12,99,850/- is justified and therefore I confirm and upheld the addition made by the Assessing Officer. 4. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A).the ld.AR on behalf of the assessee while referring to affidavit of the assessee contended that the ld. CIT(A) was not justified in ignoring the medical certificate issued by Dr. Dhanesh Kawatra nor there is any evidence to suggest that the certificate was not genuine. Since the assessee was undergoing treatment from 4th October, 2009 to 28th February, 2010, he was not able to appear before the AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) admitted additional evidence in terms of an application dated 27.10.2010 under Rule 46A of the Income-tax Rules, 1962 , comprising;- i) medical certificate; ii) affidavit; iii) copies of LIC premium receipts iv) copy of bank statement for the AY 2007-08 . The medical certificate dated 12.3.2010 for the period 4.10.2009 to 28.2.2010 mentioned complete bed rest. It is mentioned in the said certificate that the certificate is not valid for medicolegal purpose. In any case, this certificate does not explain the absence on 17.7.2009 as also how could the assessee appear before the AO on 22.10.2009, despite being advised bed rest. The factum of illness and bed rest was never communicated to the AO during the course of assessment proceedings nor it was explained as to what prevented the assessee from explaining entries in his bank account .Even in the documents submitted by way of additional evidence, the assessee did not furnish any evidence regarding source of cash deposited in his bank account. In these circumstances, the ld. CIT(A) while discarding the aforesaid medical certificate ,upheld the completion of best judgment assessment and in the absence of any evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(3) in the case of an assessment under s. 144. But that does not really impinge upon the wider and ever present statutory mandate that the officer must frame the assessment only to the best of his judgment. In the instant case, the AO asked the assessee to explain source of cash deposited in his bank. Before the AO assessee did not put forth any explanation nor furnished any evidence regarding the source of such cash. On appeal,, the assessee pleaded that deposits and withdrawals in the said bank account ,related to his business. However, the assessee did not place any evidence before the AO or the ld. CIT(A),establishing nexus of cash deposited in the bank with his receipts from business. The turnover of the business was claimed to be only Rs.9,56,780/-while the actual cash deposited in the bank, as per remand report of the AO is Rs.13,09,873/-.Whether the entire turnover in cash was deposited in the bank, has not been established by the assessee. We find from the copy of bank statement that cash of Rs.18,800/- was deposited on 4.4.2006, Rs.11,800 on 10.4.2006; Rs.13000 on 6.7.2006; Rs.22,800/- on 22.3.2007 at police line branch of the bank at Ludhiana while Rs.41,000/- on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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