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2015 (9) TMI 1416 - AT - Income TaxUnexplained credit / deposits /investment - Held that:- The appellant had submitted the copies of assessment orders of both these persons for A.Y. 2007-08 and it is seen that the original investment amounting to ₹ 8,00,000/- had already been taxed in the hands of both these persons and therefore, the same cannot be taxed in the hands of the appellant again. Since all these accounts were in joint name, the sale proceeds were deposited in these bank accounts. As a result the appellant gets relief of ₹ 8,00,000/- in the principal amount of investment as already taxed in earlier assessment year. Since the appellant was not the owner of these mutual funds, the capital gain on maturity of mutual funds of ₹ 3,65,241/- as deposited in the impugned four bank accounts cannot be treated as income in the hands of the appellant because it was a kind of loan to the appellant. I, therefore, direct the AO to give relief of ₹ 11,65,241/- to the appellant as explained investment. Regarding fixed deposit with GSFC, it is seen from the details that the appellant had offered only interest income in the revised return of income. However, no cogent evidences or explanation were submitted during assessment proceedings to establish the investment in GSFC fixed deposits as explained investment and therefore, the AO is justified in treating the entire maturity amount as income of the appellant In respect of sundry debtors and inter bank transfer entries, it is observed that while framing the assessment the AO has duly taken care of the same while computing the income and hence there is no need to interfere in the action of the AO. To summarize out of the total addition of ₹ 55,64,745/- on account of unexplained investment, the appellant gets relief of ₹ 30,11,991/- (Rs. 18,46,750 + ₹ 11,65,241) as discussed hereinabove and the addition of balanced amount of ₹ 25,52,754/- is sustained - Decided against revenue Adoption of 8% of the net profit on total turnover - Held that:- We find that the Assessing Officer has applied Section 44AF but adopted 8% of the net profit on total turnover. Ld. CIT(A) has adopted profit @ 5% which in our considered view this has been rightly adopted. As the Assessing Officer has invoked the provision of Section 44AF, then Section 44AF specifies of 5% but not of 8%. The Assessing Officer should not have adopted profit @ 8%. Accordingly this ground of Revenue’s appeal is also dismissed - Decided against revenue
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