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ITO Ward-44 (3) , New Delhi Versus Gautam Murgai

2015 (9) TMI 653 - ITAT DELHI

Unexplained cash credits and payments of credit cards from undisclosed sources - CIT(A) deleted the addition - reopening of assessment - Treating the unexplained cash credits as business receipt and determining income from business by applying net profit @ 5% of the business receipts - Held that:- CIT(A) has correctly mentioned that the income of the assessee’s wife has to be excluded from the income tax assessment of the assessee, as the wife of the assessee is filing her returns with the respe .....

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Vasanthan, SR. DR For the Respondent : Sh. V. K. Sabharwal, Adv. ORDER Per Suchitra Kamble, JM This appeal is filed by Revenue against order dated 25/06/2013 passed by CIT(A) XXX, New Delhi. The grounds of appeal raised herein, are as follows:- 1. Deleting the addition of ₹ 14,19,676/- made by the AO on account of unexplained cash credits and payments of credit cards from undisclosed sources. 2. Treating the unexplained cash credits as business receipt and determining income from business .....

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unt with CITI Bank and with HSBC besides having a separate salary account with Central Bank of India. The Bank accounts with CITI Bank, Central Bank of India and HSBC Ltd. shows that total deposits amounting to ₹ 2,61,800/-, ₹ 3,61,575/- and ₹ 5,34,658/- respectively during the financial year 2005-06 totaling to ₹ 11,58,033/-. The Assessing Officer found the same to be escaped assessment as per provisions of law contained u/s. 147 of the Act, therefore, on the basis of wh .....

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ot tenable because the deposits of ₹ 3,61,575/- with the Central Bank of India during the year pertains only to the credit of salary received by the assessee from his employer Indian Airlines, which has already been disclosed in his ITR and a sum of ₹ 86,148/- credited in his said bank a/c on 06.04.2005 was the maturity amount received from UTI, which were deposited in the preceding year by the assessee, therefore the same could not be the income. 2. That with regard to the deposits .....

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mployer, therefore, by taking the said deposits of ₹ 5,34,658/- in her bank a/c during the year, presumed to be treated as unaccounted deposits of the assessee vitiates the proceedings initiated u/s. 147 of the Act by the Assessing Officer, therefore, it was challenged before the Assessing Officer primarily prior to the commencement of the proceedings, that the said proceedings so initiated after recording the reasons for which the copy has also been supplied are against the law and to the .....

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d under which he could not presume to be the concealed income of the assessee during the year, as for the one bank account maintained in the Central Bank of India only the salary of the assessee has been credited and the deposits appearing in the other bank A/c maintained with HSBC Bank, the same does not belongs to the assessee as the same was being operated by his wife Mrs. Ashita Murgai, the Assessing Officer out-rightly rejected the objections filed by the assessee against the initiation of .....

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e year, but since the assessee has not maintained and was not required to maintain any books of accounts for the said transactions under the provisions of law contained u/s 44AF of the Act, therefore, 5% profit deduced/derived there from could maximum be added to the income of the assessee from undisclosed sources which comes to ₹ 13,090/- and no further additions could have been warranted and to have been made in the income of the assessee, as has been done by the Assessing Officer. The a .....

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was prevented by reasonable and sufficient cause to produce and file the same during the course of assessment proceedings, therefore, the income of the assessee shall be computed in the following manner:- Income from salary declared as per return ₹ 182610/- Income from other sources a. Interest on Deposits ₹ 1992/- b. Income as 5% Profit on the total credit of ₹ 261800/- with the CITI Bank Rs.13090/- Total Rs.197692/- Rounded Off 197700/- 4. The CIT(A) relied upon the letter d .....

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m Murgai. Thus, directed the Assessing Officer to compute the assessee s income from his salary income and his income from small business u/s. 44AF at 5% of turnover and total income was recomputed for A.Y. 2006-2007 was of ₹ 1,97,692/-. 5. The DR submitted that for other assessment year the tax effect was below four lakhs hence for A.Y. 2003-04, 2004-05, 2005-06, 2007-08 and 2008-09 appeal was not filed by the Department. The DR relied upon the Assessment Order and further pointed out pag .....

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