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2020 (11) TMI 472 - AT - Income TaxBusiness income v/s undisclosed income - AO held that the assessee could not substantiate her business activities nor could explain the cash deposits in the bank account - HELD THAT:- From a bare perusal of the bank statement which was basis for the addition, it is seen that assessee has received cash from various vendors/ purchasers outside the Delhi and the narration given in the account mentions ‘by cash- Jhansi- Shipri Bazar’, ‘by cash cashupl-Solapur’, ‘by cash cashupl- Jodhpur’, ‘by cash Ajmer’, and likewise wherein cash amount has been deposited in her bank account on various dates. One very glaring feature from the perusal of the bank account is that the assessee has been paying VAT and such entries are appearing all throughout the year on various dates. Payment of VAT does indicate purchase and sale of some goods, items or services. All these factors thus, go to show that some kind of business activity was carried out by the assessee. If the assessee had shown income u/s.44AD which is presumptive basis for taxation and looking to the nature of bank account entries and regular cash deposits and withdrawals this shows that assessee was doing some kind of business activities and preponderance of probabilities for such activities is definitely goes in favour of the assessee. Assessing Officer has tacitly accepted the business income by accepting the return of income from the same deposits - we direct the Assessing Officer to accept the return of income as business income.
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