TMI Blog2014 (6) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit rate of 14.9% on a turnover of Rs. 11,88,000 - This was found to be much higher than the presumptive rate of net profit applicable in terms of the provisions of Section 44AF of the Act - Revenue has not been able to successfully refute the facts duly taken into consideration and discussed in detail by the CIT (A) in the order - the approach of the CIT (A) in adopting the peak of the deposits and withdrawals during the year, to be well justified – Decided against Revenue. Deletion of penalty u/s 271(1)(c) of the Act – Held that:- CIT (A) was of the view that since no return of income had been filed, despite the assessee having taxable income as determined by the AO, the whole of the income determined by the AO represented the concea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Notice u/s 142 (1) dated 18.09.2007 was issued to the assessee asking him to file his return of income by 19.10.2007. However, no such return of income was filed. Again, notice u/s 142 (1) along with show cause notice dated 01.11.2007 was issued to the assessee asking him to explain the source of cash deposits in his bank account and to explain why this amount should not be added to his income as from undisclosed sources. No reply was filed to this show cause notice. Therefore, the AO made an addition of Rs. 11,88,000/- to the assessee s income by treating these cash deposits as his income from undisclosed sources. As no return of income was filed in this case, the income of the assessee was determined at Rs. 11,88,000/-. 3. By virtue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mptions and incomplete information; that out of the assessee s bank passbook, as summoned by the AO and not available with the assessee being old, was incomplete; that in the cash account made on the basis of bank account and Profit Loss Account, the net profit of the assessee stood shown at Rs. 69,570/-, on a turnover of Rs. 9,85,870/-; that the assessment having been framed u/s 144 of the Act, the assessee had filed submissions along with documentary evidence before the ld. CIT (A); that the ld. CIT (A) had forwarded the same to the AO; that in the remand report dated 18.03.2013, the AO had commented that the assessee, as per the details filed, had deposited huge amount in his bank account on different dates, whereas regular monthly cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of a customer, against the sale of sarees and it was not a transfer from the assessee s current account, since the assessee did not have any bank account other than the savings bank account (affidavit to this effect had been filed); that withdrawals of Rs. 21,371/- had been made from the bank account and an amount of Rs. 53,400/- had been withdrawn by the assessee from his business; and that thus, the total household withdrawals of the assessee were of Rs. 74,771/-, which was sufficient for meeting the day-to-day household expenses of the assessee s family. 7. The ld. Counsel for the assessee has further contended that the assessee s submissions regarding cash deposits having been made out of cash sales had not been accepted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cash Deposit 2,50,000 (1,77,000) 23.06.2004 Cash Withdrawal 1,00,000 (77,000) 01.07.2004 to 30.09.2004 Cash Withdrawal Cash deposit 6,23,677 4,73,372 5,46,677 73,305 14.10.2004 Cash Deposit 1,07,000 (33,695) 16.10.2004 Cash deposit 37,628 (71,323) 06..1.1.2004 Withdrawal slip 1,00,000 28,677 09.11.2004 Cash deposit 6,000 22,677 16.11.2004 Cash Withdrawal 40,000 62,677 18.11.2004 Cash deposit 40,000 22,677 23.11.2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh withdrawals, the source of the amount of Rs. 1,77,000/- as on 5.6.04, remained unexplained. It was as such, that the ld. CIT (A) treated this amount of Rs. 1,77,000/- as the assessee s income from undisclosed courses. This figure of Rs. 1,77,000/- was seen to work out to a profit rate of 14.9% on a turnover of Rs. 11,88,000/-. This was found to be much higher than the presumptive rate of net profit applicable in terms of the provisions of Section 44AF of the Act. 10. The department has not been able to successfully refute before us the above facts duly taken into consideration and discussed in detail by the ld. CIT (A) in the impugned order. We find the approach of the ld. CIT (A) in adopting the peak of the deposits and withdrawals d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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