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2013 (8) TMI 137 - AT - Income TaxDisallowance made u/s 40(a)(ia) - not deposit of TDS before the expiry of time prescribed under sub-section (1) of section 200 - Held that:- As decided in CIT vs. Virgin Creations [2011 (11) TMI 348 - CALCUTTA HIGH COURT] amendment to the provisions of sec. 40(a)(ia) by the Finance Act, 2010 would be applicable retrospectively from 1-4-2005 & if an assessee has deposited the TDS amount before due date of filing of return u/s 139(1), no disallowance can be made u/s 40(a)(ia) of the Act. In the facts of the present case, there is no dispute that the assessee has deposited TDS amount before the due date of filing the return u/s 139(1), hence, the no disallowance can be made by invoking the provisions contained u/s 40(a)(ia) - appeal filed by the assessee stands allowed. Unaccounted cash credit - CIT(A) deleted the addition - whether assessee has not substantiated the sources for the credits/deposits made into the bank account with corroborative documentary evidence - first group of deposits - Held that:- The assessee has submitted that these amounts had been deposited out of the cash withdrawal of ₹ 4,90,000 on 27-5-2008 which had been withdrawn for hte medical treatment of the assesse's (aunt). AO has not accepted this explanation stating that the sum of ₹ 4,90,000 had been used for repayment of loan to Sri P. Nageswara Rao. It is seen from the entries in the bank account and the assessee 's explanation that the repayment has taken place subsequently, i.e., on 27-8-2008 and on 11-9-2008. Before this, the assessee had made a self withdrawal of ₹ 4,91,500 on 31-5- 2008. However, as per the assessee, this amount was eventually not utilised and was re-deposited on the dates mentioned above. AO has ignored this withdrawal of ₹ 4,91,500 in his order without giving any justification. Thus the assessee's explanation is reasonable and deserves acceptance. Against revenue. Second group of deposits - Held that:- The assessee submitted that he had borrowed a sum of ₹ 6 lakhs from Sri Rajeev Aurangabadkar for the purpose of development of land at Gandhamguda village. The borrowals are not disputed by the Assessing Officer. The assessee further submitted that he had paid advances to Sri M.V. Bhadra Rao (contractor for electrical works) and Sri G. Shanker (contracator for civil works). Since the project did not materialise, the assessee recovered the advances from the two persons and the deposits were made out of these amounts. The fact that payments were made to these two persons is borne out fo the bank details extracted in the assessment order. The subsequent deposits also tally exactly with the subsequent disputed deposits. The assessee 's explanation, therefore, is logical and reasonable. Third set of deposits - Held that:- The fact remains that the assessee had returned an income of ₹ 2,61,250/- and agricultural income of ₹ 72,630/- which has been accepted by the Assessing Officer in his order. These amounts, which reflect the net income of the assessee, would themselves be sufficient to explain the deposits of ₹ 1,44,500/-. It would also be safe and logical to presume that the deposits were made out of the gross receipts of the assessee which naturally would be more than the returned (and net) income. The explanation of the assessee is, therefore, accepted as reasonable. Determination of net profit at the rate of 5% of the purchases and stock put for sale during the year - Held that:- Income of the assessee in this particular line of business of liquor has to be estimated at 5% on purchase of stock put for sale as decided in case of M/s Amaravati Wine Shop [2012 (8) TMI 706 - ITAT, HYDERABAD].
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