TMI Blog2010 (3) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... upon him and, therefore, assessment framed under section 144 was without jurisdiction. However, this contention of the assessee was rejected by the learned Commissioner of Income-tax (Appeals). He observed that as per the remand report of the Assessing Officer notice under section 143(2) was issued and sent through speed post at the correct address of the assessee and the evidence to this effect had been given in the shape of speed post booking list of the postal authorities. The learned Commissioner of Income-tax (Appeals) has also noted that notice dated June 27, 2007 was sent through speed post to the assessee at his address E-10B, Jawahar Park, Laxmi Nagar, New Delhi. The second notice was issued on January 15, 2008. The assessee did not respond to the notice. The third notice under section 143(2) of the Act was issued on March 7, 2008 fixing the case for hearing on March 28, 2008 through speed post at the address of the assessee. The assessee once again failed to reply. The fourth notice under section 143(2) was issued on July 21, 2008 fixing the case for hearing on July 28, 2008. The assessee again failed to respond. Notice under section 143(1) of the Act was issued on Octob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in Jain Co-operative Bank Ltd., Darya Ganj, during the period under consideration was Rs. 3,33,30,600. Since the assessee failed to explain the source and acquisition of the cash deposited, the Assessing Officer treated the income from undisclosed sources. Before the learned Commissioner of Income-tax (Appeals) it was submitted that the assessee was engaged in the business of transport agency, job work and trading in individual name as well as three proprietorship concerns, M/s. Dynamic Solutions, M/s. Balaji Fabrics and M/s. Royal Transport. It was submitted that the deposits made in the bank account were out of sale proceeds and withdrawals represented the payment for purchases. The Assessing Officer without identifying peak or maximum balance in the bank account, and analysing the peak with capital treated the entire cash deposited in the bank as income from undisclosed sources including the losses from the trading activities which appeared as debit items in the profit and loss account. The learned Commissioner of Income-tax (Appeals) asked the comments of the Assessing Officer. The Assessing Officer in his remand report submitted that the assessee had failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat losses suffered in trading activity appear as debit item in the profit and loss account filed along with the return of income had been ignored by the Assessing Officer. Further transactions in the bank account read with audited balance-sheet of the assessee filed along with the return of income demonstrated that the deposit in the bank account were out of sale proceeds and withdrawals represented the payment of purchases. Whatever the running balance in the bank account of the assessee remained was covered by the capital balance of the assessee and as such, no addition could be made. The learned Commissioner of Income-tax (Appeals), however, rejected the contention of the assessee by observing as under : "I have carefully considered the submissions made by the appellant and have gone through the assessment order and report of the Assessing Officer. As regards the appellant's contention that the assessment has been framed without adhering to the principles of natural justice, I find that various notices and letters have been sent to the appellant. The details of these notices/letters, have been discussed in preceding paragraphs of this order. In view of the same, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the facts and circumstances of the case, Ifind that the Assessing Officer was justified in making the additions of Rs. 3,33,30,600 and Rs. 27,43,716 and the same are upheld." Before us similar arguments have been reiterated as were made before the learned Commissioner of Income-tax (Appeals). It has been submitted that the assessee was providing accommodation entities. However, no evidence to this effect was produced. On the other hand, the learned Commis- sioner of Income-tax (Departmental representative) supported the order of the learned Commissioner of Income-tax (Appeals). We have heard both parties and gone through the material available on record. We have also gone through the bank account of M/s. Dynamic Solutions with Jain Co-operative Bank Ltd. From the copy of bank account we find that the assessee has deposited cash in the bank account. The cash deposited has been transferred it to various accounts in the same branch. The assessee has not explained source of cash deposited. The assessee has not withdrawn cash from the bank on the basis of which it could be argued that the same cash was deposited in the bank account and, therefrom peak credit of deposits in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of the gross profit rate at the rate of 8 per cent was excessive whereas the assessee had earned the commission at the rate of 2 per cent. The learned Commissioner of Income-tax (Appeals), however, in the absence of supporting evidence in favour of book results upheld the estimation of net profit at the rate of 8 per cent. Before us the learned authorised representative for the assessee submitted that the assessee had earned commission on transport business of 2 to 3 per cent. The assessee was engaged in booking the receipts for which commission varying 2 to 3 per cent. was allowed to the assessee. Therefore, the learned Commissioner of Income-tax (Appeals) is not justified in upholding the net profit rate of 8 per cent. On the other hand, the learned Commissioner of Income-tax (Departmental representative) supported the order of the learned Commissioner of Income-tax (Appeals). We have heard both parties and gone through the material available on record. Before us, during the course of hearing, the learned authorised representative for the assessee could not produce any evidence that commission at the rate of 2 to 3 per cent. was earned on transport business. At ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
