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2015 (9) TMI 1416 - ITAT AHMEDABAD

2015 (9) TMI 1416 - ITAT AHMEDABAD - TMI - Unexplained 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 .....

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- 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 .....

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d 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 .....

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al: 1. On the facts and circumstances of the case and in Law the Ld. CIT(A) has erred in deleting the addition of ₹ 30,11,991/- made by the Assessing Officer on account of unexplained credit / deposits /investment made in bank accounts treated as undisclosed income u/s.69 of the I.T. Act. 2. On the facts and in the circumstances of the case and in Law the Ld. CIT(A) has erred in restricting the addition of ₹ 4,36,172/- instead of addition of ₹ 6,99,558/- made by the Assessing O .....

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d vide order dated 31.12.2010. While framing assessment Assessing Officer made addition of ₹ 6,99,558/- by estimating net profit @ 8% and the Assessing Officer also made addition of ₹ 55,64,745/- by invoking the provision of Section 69in respect of undisclosed cash deposits in undisclosed bank account. 3. Against this order, assessee preferred an appeal before the ld. CIT(A) who after considering the submissions of the assessee, adopted the net profit @5.1% and restricted the additio .....

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sed fact is that assessee has not disclosed bank accounts before the Assessing Officer. Assessing Officer has recorded that the accounts were not disclosed in regular books of accounts. Therefore, the Assessing Officer was justified in making addition as undisclosed amount credited into the bank accounts of the assessee and same was rightly treated as income from other sources . On the contrary, ld. Counsel for the assessee has submitted that the entire amount cannot be subjected to tax. He subm .....

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i (2015) 54 taxmann.com 23 (Delhi HC) and also the judgment of Hon ble Delhi High Court in case of CIT vs. Subodh Gupta (2015) 54 taxmann.com 343 (Delhi). Ld. Counsel for the assessee also placed reliance on the decision of the coordinate Bench rendered in case of Kesharbhai Ghamarbhai Chaudhary vs. ITO (2012) 23 Taxmann.com273 (Ahmedabad-Trib.). On the contrary, ld. D.R. has placed reliance on the decision of the co-ordinate Bench referred in case of The ITO vs. Shri Kishorbhai Chhotalal Parmar .....

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(vi) S.B. A/c. No.61095 (vii) ICICI Bank Curr. A/c. No.2242 The Assessing Officer did not accept the explanation given by the assessee and treated the total unrecorded investment of ₹ 55,64,745/- as the deemed income of assessee for the year under appeal. On appeal, however, ld. CIT(A) decided the issue as under: 6.3 I have gone through the assessment order as well as the contentions of the ARs. It is seen from the paper book filed by the ARs of the appellant that their main contentions w .....

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ings, the appellant had confessed this fact. But the main contention of the appellant was that the entire deposits in the said bank accounts during the year under appeal could not be his income as various credit entries were reflecting different nature of transactions. I have considered the explanation related to different deposits alongwith evidences placed before the AO during assessment proceedings. It is seen that the deposits / investments of ₹ 55,64,745/- in the said bank accounts we .....

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e of deposits bank wise for different bank accounts and the same are dealt with as under. It is observed from the assessment order as well as the details submitted by the appellant that the other deposits in the impugned bank accounts were related to interest and other income and loans from friends and relatives which are summarized below. Particulars A/c. No. 9427 A/c. No. 61095 A/c. No.61175 A/c. No.661506 Total Bank Interest 313 363 579 317 1572 FDR Interest - 59916 59916 Bhudarji Mithal Loan .....

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est and brokerage income are concerned, the appellant himself had admitted the same in the revised return of income filed by him and therefore, the AO is justified in treating the same as income. It is observed that the appellant had received deposits/loans.from Shri Bhudarji Mithal of ₹ 1,96,750/- and ₹ 1,20,000/- in bank account no. 9427 and 61175 respectively. Similarly, he had received loan from Smt. Hansaben I. Parmar of ₹ 15,250/- in bank account no. 9427. Also the appell .....

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e appellant had discharged his initial burden of establishing the genuineness of transaction and identity and credit worthiness of the depositors. It is observed that the AO had not rebutted the evidences filed by the appellant and also did not make any further inquiry. The AO also could not lead any evidence to establish that the impugned transactions were not genuine. Under such circumstances, when the source of funds credited in the impugned bank account was explained with evidence, the actio .....

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rved from the details submitted during the assessment proceedings that various deposits in the impugned four bank account included the maturity amount of various mutual funds and total maturity proceeds of ₹ 31,52,882/- were found to be deposited in the said bank accounts. This maturity amount included a sum of ₹ 11,65,241/- received on maturity of four mutual funds viz. DSP Equity Fund, F.T. India Flexi Cap, Kotak Opportunities and Reliance Eq. Opportunity fund and the cost of the s .....

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5 286889 Reliance Eq. Opportunity Cost Sale Value 40000 40000 40000 40000 40000 68909 68909 68909 137819 344546 Total Cost Sale Value 800000 1165241 The ARs contented that the principal amount of the same was invested by Smt. Dayshreeben C. Parmar and Smt. Chandanben K. Parmar from their bank accounts during A.Y. 2007-08 and the necessary addition in respect of these investments were made in the assessment orders of both of them in AY. 2007-08. From the details submitted before the AO, it is obs .....

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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 inves .....

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