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2020 (12) TMI 665 - AT - Income TaxCash deposits as unexplained investments taxed u/s.69 - section 44AD applicability - HELD THAT:- Once part of bank credit is accepted as turnover on presumptive basis and has taxed accordingly by applying the provisions of section 44AD then there is no reason for the AO to take a different view for remaining part of cash deposits found in the same bank account and treat the same as unexplained investments to be taxed u/s.69 because it is an admitted that the assessee has proved with necessary evidences that she has received cash from business activity of civil contract and interior decoration work. As admitted fact that said activity has not been disclosed in income-tax return filed for relevant year and the assessee has not maintained regular books of account for the said activity. AO having accepted the explanation furnished by the assessee regarding her business activity and source of income for cash deposits found in her bank account, he ought to have accepted the explanation furnished by the assessee towards total cash deposits found in her savings bank account. In this case, the Assessing Officer has accepted part of cash deposits as out of her business receipts and part of cash deposits as her unexplained investments, without brought on record any cogent reasons to justify different view taken on cash deposits found in her bank account during the same financial year. The learned CIT(A) has also simply upheld the findings of the Assessing Officer without assigning any reason why explanation furnished by the assessee regarding source of income for cash deposits found in her bank account was accepted in part, cannot be accepted for remaining cash deposits found in the same bank account. AO as well as CIT(A) were erred in assessing part of cash deposits as unexplained investments to be taxed u/s.69 and part of cash deposits as receipts from business liable to be taxed u/s.44AD - Hence, we direct the Assessing Officer to treat the total cash deposits found in her bank account maintained with Bank of India, West Mambalam branch as receipts from her civil contract business and estimate 8% net profit on total receipts as per the provisions of section 44AD - Appeal filed by the assessee is partly allowed.
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