TMI Blog2014 (9) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... n at 8% of the total turnover working out pick credit - there is no such discussion and/or the reasons assigned by the Tribunal on the directions that the income of the assessee shall be estimated at 8% of the total turnover - Even nothing is on record how and on what basis the Tribunal has even estimated the income at 8% of the total turnover – the order directing that the income of the assessee shall be estimated at 8% cannot be sustained – thus, the order of the CIT(A) in making addition in his total income of the assessee u/s 69A of the Act is restored – Decided in favour of Revenue. - Tax Appeal No. 252 of 2014 - - - Dated:- 15-7-2014 - M. R. Shah And K. J. Thaker,JJ. For the Appellant : Mr. Sudhir M. Mehta For the Respondents : Mr. Dipak Shah with Mr. Tej Shah JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) 1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 14.08.2013 passed by the learned Income Tax Appellate Tribunal, CBench, Ahmedabad [hereinafter referred to as Tribunal ] in ITA No.2302/Ahd/2011 for AY 2008-09 by which the learned Tribunal has partly allowed the said appeal preferred by the assessee quashing and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount that the assessee had deposited total amount of ₹ 66,75,030/- including the sum of ₹ 45,16,192/- in cash. In view of the above, vide office showcause notice dated 08.12.2010, the assessee was called upon to show cause as to why the cash deposit of ₹ 45,16,192/- should not be added to his total income as unexplained money under Section 69A of the IT Act. That in response to the above showcause notice the assessee submitted that the transactions in saving account belong to business transactions sales and purchases of art silk cloth. It was also submitted that cash was deposited by outside party from different places against sale. It was submitted that as he has done business, it was requested to consider gross profit as income. 2.2 The AO was not satisfied by the reply / explanation given by the assessee and thereby treating the aforesaid amount of ₹ 45,16,192/- as unexplained money under Section 69A of the IT Act and added the aforesaid amount of ₹ 45,16,192/- into the total income of the assessee. That while making addition of the aforesaid amount of ₹ 45,16,192/- into total income of the assessee as unexplained money under Section 69A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the said appeal by the assessee and has upheld the order passed by the AO by observing in paras 6.1 and 6.2 as under: 6.1 The arguments of the Assessing Officer as well as appellant have been considered. The appellant has contended that he is a Trader and that deposit in the Bank A/c. is in the nature of sales receipt deposited by various customers at different places. However, the appellant has given no supporting evidences to substantiate its contention. On the contrary, in the return of income, the appellant had shown income from salary and no income from so called business activity, was disclosed in the return. Even during the course of appellate proceedings, the appellant was asked to adduce evidence in support of its claim that he is carrying out trading activity. However, the appellant has not produced any such evidence even at the appellate stage. 6.2 In view of the above, it is clear that the entire story as proposed by the appellant that the deposit in the bank a/c is in the nature of trading receipts is at best a figment of imagination. The strong reasoning given by the Assessing Officer in the assessment order as mentioned above clearly indicates that the cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch when the assessee filed the return of income, he stated that the source of income is salary and interest and he declared the saving bank account with Federal Bank only. It is submitted that as such his bank account in the Punjab National Bank was unearthed on the basis of AIR information and it was found that out of total amount of ₹ 66,75,030/- deposited by the assessee, the amount of ₹ 45,16,192/- was deposited in cash. 3.2 It is further submitted that as such the learned Tribunal though agreed that the onus is on the assessee to establish his trading activity which he failed to do, the learned Tribunal has proceeded to delete the additions confirmed by the learned CIT(A) by observing that however, the revenue has also not brought anything on record to show that the cash deposited in the bank account of the assessee is from his income from undisclosed sources without commenting on the cash withdrawals made by the assessee. It is submitted that the learned Tribunal has materially erred in shifting the onus/burden upon the Department to prove contrary. It is submitted that as such and as per the settled proposition of law, it was for the assessee to prove / estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appearing on behalf of the assessee has heavily relied upon the decision of Rajasthan High Court in the case of Commissioner of IncomeTax v. Ishwardass Mutha reported in (2004) Vol. 270 597. However, Shri Shah, learned advocate appearing on behalf of the assessee has fairly conceded that as such the learned Tribunal is not right in issuing the onus/burden upon the Department to show that cash deposit in the bank account of the assessee was his income from undisclosed sources. Making above submissions and relying upon above decisions, it is requested to dismiss the present tax appeal. 5. Heard learned advocate appearing on behalf of the respective parties at length. At the outset it is required to be noted that the assessee filed his return of income for the year under consideration declaring total income of ₹ 1,07,160/- and the assessee specifically stated that he has derived the income from salary and interest during the year. The assessee as such never declared that he is also in the business of trading of art silk cloth. It is also required to be noted that in the return the assessee declared only one bank account in Federal Bank. However, on AIR information it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anything on record before us stating that the assessee had made any investment from such income. Further, considering the particulars oft transactions reflected in the bank statement one can presume that the assessee was indulging in trading activities probably of art silk cloth as claimed by the assessee. No doubt, the onus is on the assessee to establish his claim which he has not complied fully. However, the revenue has also not brought anything on record to show that the cash deposited in the bank account of the assessee was his income from undisclosed sources without commenting on the cash withdrawals made by the assessee. In these circumstances and drawing strength from the case laws cited by the assessee, supra, we are of the considered view that the entire deposits of ₹ 45,85,861/- made by the assessee in his bank account as observed by the learned AO has to be treated as total turnover of the assessee with respect to his undisclosed business of trading in art silk cloth and accordingly the income of the assessee shall be estimated at 8% of the total turnover. However, it is required to be noted that while holding so the learned Tribunal has shifted the onus/burde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee on estimation at 8% of the total turnover by working out pick credit and thereby sustaining addition only to the extent of pick credit. The working out pick credit and sustaining addition to the extent of pick credit would arise if it is established by the assessee that his undisclosed income is relatable to the trading in art silk cloth. When it has been found that the assessee has miserably failed to establish and prove that he was in the business of trading in art silk cloth and that the aforesaid deposit of ₹ 45,85,861/- made in cash in his bank account was with respect to his undisclosed business of trading in art silk cloth, there is no question of further making addition on the basis of estimation at 8% of the total turnover working out pick credit. It is required to be noted that in the present case even there is no such discussion and/or the reasons assigned by the learned Tribunal on the directions that the income of the assessee shall be estimated at 8% of the total turnover. Even nothing is on record how and on what basis the learned Tribunal has even estimated the income at 8% of the total turnover. Under the circumstances also, the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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