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2021 (7) TMI 9 - AT - Income TaxUnexplained money u/s 69A - unexplained bank deposits - as argued cash deposited in the bank account represented the money collected from the customers and withdrawal is the payment to the vendors and to the shopkeepers - applicability of section 44AD - HELD THAT:- Assessee is engaged in the business of hardware and tools, therefore, considering the totality of facts of the case, it is of the considered opinion that business activities carried out by the assessee cannot be simply rejected and the entire cash deposits cannot be brought to tax as unexplained income. The assessee in the instant case has filed purchase and sale bills before the learned CIT(A), therefore, the business activity is established. Further, there is no query either by the AO or by the learned CIT(A) regarding the utilization of the substantial withdrawals from the said bank account. CIT(A) was not justified in sustaining the addition made by the AO on account of cash deposits in the bank account. Since, the same AO in the subsequent assessment year has accepted the profit rate of 10.59% u/s 44AD of the Act, therefore, considering the totality of the facts of the case, I am of the considered opinion that adoption of net profit @ 11% on the total bank deposits will meet the ends of the justice. I hold and direct accordingly. Grounds raised by the assessee are accordingly partly allowed.
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