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2021 (5) TMI 782 - AT - Income TaxUnexplained cash deposits in HDFC Bank by the Assessee - CIT-A deleted the addition - HELD THAT:- As decided in own case as directed to AO to estimate the profit @8% on the total deposit - While realising from the return of income filed by the Assessee in response to the notice u/sec.148, held that as the Assessee has already increased turnover by adding the amount of cash deposits and admitted the profit @8%, therefore no further addition is required and consequently directed to delete the entire addition . We may observe that the ld. Commissioner thoroughly considered the contentions of the department and the Assessee and deleted the addition in hand, while respectfully following the dictum of the Co-ordinate bench of the ITAT qua identical issue for the A.Y. 2011-12 and considering the peculiar facts and circumstances. Neither any material is available on record nor brought to our notice by the Revenue Department to controvert the finding of the ld. Commissioner, consequently, ground No.2 stands dismissed. Addition on the basis of mere cash flow statement filed by the Assessee - CIT deleted the addition - HELD THAT:- Commissioner has held to the effects that at the time of survey of the business premises of the Assessee, no unaccounted investment or expenses were found and the Assessee submitted cash flow statement and also furnished all the details and receipts for the year under consideration and even otherwise, no specific defect was pointed out by the AO. The AO assumed that the amount drawn in small amounts cannot be considered as available for redeposit, however, no such cogent material to substantiate the same. Commissioner also observed that on a careful perusal of the cash flow statement, he found that the Assessee had cash balance in hand for every deposit made. Further, the other payments shown in the cash flow statement are also found to be from the cash balance available to the Assessee. Revenue Department failed to contradict the finding of the ld. Commissioner for the issue in hand, hence the same does not require any interference. Consequently, the ground No.3 stands dismissed. Addition of unsubstantiated gifts - CIT-A deleted the addition - HELD THAT:- As clear from the record that both the donors from whom the Assessee has taken the loan are close relatives and money has been routed through banking channel and both the donors have disclosed the transactions in their financial statements and before the AO, filed the confirmation letters and also substantiated through their returns of income for the assessment year under consideration and resultantly the Assessee has prima-facie discharged his onus as held by the ld. Commissioner. With regard to contention qua the creditworthiness of the donors, the Assessee is required to discharge its onus prima facie on the basis of probability only, which in the instant case correctly been discharged by the Assessee, hence, we are unable to find out any reason and/or material to controvert the finding of the ld. Commissioner. Consequently, ground No.4 also stands dismissed. Addition made towards unsubstantiated expenditure by the AO - CIT deleted the addition - HELD THAT:- Commissioner thoroughly perused the computation and the profit & loss account of the Assessee wherein the Assessee had admitted income from business of interior decors @8% of the turnover and the ld. Commissioner further observed that as the Assessee has opted for the provisions of section 44AD, there is no necessity to submit the profit and loss account. Further, it was observed by the ld. Commissioner that the AO himself has allowed certain expenses like advertisement, travelling expenses, office rent and telephone expenses etc., therefore is not justified in observing that the Assessee failed to show the source as business income. The ld. Commissioner further held that once the Assessee has chosen to admit the income in terms of section 44AD, the profit has to be assessed as per the percentage stipulated in the said section and the AO cannot resort to item wise disallowance of the expenses. Commissioner while deleting the addition also observed that the Hon'ble ITAT, Visakhapatnam bench held that profit of 8% is reasonable in respect of business turnover of the Assessee. Therefore, looking at the issue in any manner the AO is not justified in disallowing the expenditure. Nothing contrary has been brought by the Revenue Department and even we have also failed to find out any material to controvert the decision of the ld. Commissioner for the issue in hand, consequently, no interference is necessitated. Thus the ground No.5 also stands dismissed. Revenue appeal dismissed.
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