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2022 (9) TMI 1374 - AT - Income TaxAddition u/s 68 - Unexplained cash credit - HELD THAT:- Pattern of deposits in bank account shows that there are certain cheque deposits, deposits in cash and regular withdrawal of amount. The frequent deposit and withdrawal shows that the bank account in dispute was used for unreported business transactions. As recorded above assessee before us claimed that the assessee was doing a business of plastic items, thus, considering the submissions of assessee, we find merit in his submission that the assessee was doing some business activity, though it was not disclosed to the department. Taxing the entire credit is not justified, thus, it would be justified if only profit element in such business activities from where the assessee generated the credit found in the bank account. The lower authorities have confirmed the entire aggregate of deposits and have not considered the withdrawal. The Hon’ble Gujarat High Court in CIT Vs Pradeep Shantilal Patel [2013 (11) TMI 1646 - GUJARAT HIGH COURT] held that where assessee admitted that cash deposit pertains to his retail business but details and nature of business were not forthcoming from record, considering the total turnover of assessee, net income had to be determined under Section 44AF. The Coordinate Bench of this Tribunal in Smt. Krushangi Keyur Bhagat [2018 (9) TMI 2093 - ITAT SURAT] almost on similar set of facts wherein cash credit was found credited in the bank account of that assessee, the assessee took plea before lower authorities that transaction in bank account pertained to her textile business. The assessee claimed that only peak credit appearing in the bank account should be considered which was not accepted and the amount after reducing the cheque deposits, remaining was treated as unexplained. On appeal before Tribunal, the plea of assessee that amount credited in the bank was a part of textile business and only profit element @ 5% of total deposit including of credit by way of cheque was considered as a profit element on the total deposits. Entire amount of deposits cannot be considered for addition, when the assessee is specifically contended before ld CIT(A) that the credit in the bank account if his unreported income. Therefore, 8% of total addition is considered as profit from such business activities. Accordingly, the Assessing Officer is directed to consider 8% of total deposit - In the result, ground raised by assessee is party allowed.
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