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Shri Sanjay R. Shah Versus ITO, Ward 3 (4) , Surat

Turnover estimation - Application of 10.55% net profit rate on the total turnover shown in the bank account - whether the impugned bank account was actually used for running of textile business or running of cheque discounting business? - Held that:- CIT(A) has rightly observed that the transactions in the bank account do not pertain to the cheque discounting business being carried out by the appellant; as we also find that assessee is maintaining a considerable bank balance in this bank account .....

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₹ 18,75,554/- in the bank account operated by assessee - Decided against assessee. - ITA No.1784/Ahd/2013 - Dated:- 1-4-2016 - Shri Rajpal Yadav, JM, & Shri Manish Borad, AM For The Appellant : Shri Shailesh Vaidya, AR For The Respondent : Shri Alok Kumar, Sr.DR ORDER PER Manish Borad, Accountant Member. This appeal of the assessee is directed against the order of ld. CIT(A) -IV, Surat dated 14.03.2013 passed against order u/s 143(3) of the IT Act, 1961 (in short the Act) for Asst. Ye .....

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Income-tax (Appeals) may please be deleted. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 2. Briefly stated facts as culled out from the assessment records are that assessee is an individual engaged in the business of textile and cheque discounting under the name and style of M/s Dhami Corporation. Return of income was filed on 28.3.2008 declaring total income at ₹ 1,42,370/-. Survey was conducted at the premises o .....

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assessment proceedings assessee submitted that all the transactions shown in the bank account in the name of Vishnu Kumar Agarwal relate to assessee himself and they are in relation to cheque discounting business. On the other hand, ld. Assessing Officer was of the view that turnover of ₹ 18,75,554/- does not relate to business of cheque discounting but is relating to the business of textile business of assessee and accordingly applied net profit rate of 10.55% on this turnover of ₹ .....

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sessed at ₹ 4,39,630/-. 3. Aggrieved, assessee went in appeal before ld. CIT(A) who partly allowed the appeal of assessee by deleting addition of ₹ 3,392/- and ₹ 96,000/- and sustained the addition of ₹ 1,97,871/-. 4. Aggrieved, assessee is now in appeal before the Tribunal. 5. Ld. AR submitted following in relation to 1. addition of Rs.l,97,87l/- being estimated Net profit @ 10.55 % on turnover of ₹ 18,75,554/- in the impugned bank account : A) The appellant was en .....

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counting business in the said bank account which was opened in the name of Vishnukumar Agrawal and' the turnover was related to the Cheque discounting business only. C) The learned ITO wrongly added the Net profit considering the fact that since the appellant had carried out the retail business of Cloth and showed the Net profit from the said business @ 10,55% during the year under consideration. D) The learned ITO had totally neglected the facts that the appellant had also carried out the c .....

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that he had carried out the cheque discounting business in the said account of Vishukumar Agrawal. This evidence had not been taken cognizance by the learned ITO. Nor he stated to the AO regarding what was stated in the affidavit was wrong and baseless. F) The appellant had also filed the affidavit of Vishnukumar Agrawal who had stated and confirmed therein that he lended this account to the appellant for carrying out the cheque discounting business only. The said Vishnu kumar Agrawal had never .....

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(Copy of the said letter is attached herewith for Your Honour's ready reference.) Thus, the learned ITO had totally misled himself while adding the amount of ₹ 1,97,871/- being the estimated profit on total turnover of ₹ 18,75,554/-. H) The learned ITO had never brought on record any single piece of the evidence to establish that the bank account and the transactions carried out therein were of textile business. On the contrary the appellant had filed his own affidavit and the af .....

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r which would come to ₹ 1,876/- and the same to be added to the total income of the appellant. Thus, in view of the above facts, it s humbly requested to delete the addition of ₹ 1,97,87I/- which was made only on the basis of the pure guess work and by completely ignoring the facts and evidences produced before the learned AO during the course of the assessment. 6. On the other hand, ld. DR supported the orders of lower authorities. 7. We have heard the rival contentions and perused .....

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is cheque discounting business to this account and assessee has also accepted during the course of assessment proceedings that transactions entered into in the impugned bank account in the name of Vishnu kumar Agarwal belongs to him which proves beyond doubt that income related to the bank account in the name of Vishnukumar Agarwal belongs to assessee but the ld. AR is impressing that the impugned bank account has been used for running the business relating to cheque discounting and ld. Assessin .....

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ransactions entered into by him in the bank account in the name of Vishnu kumar Agarwal was actually used for cheque discounting business. We further find that ld. CIT(A) has observed following while confirming the addition of ₹ 1,97,871/- made by the Assessing Officer :- 2.4 Decision: I have gone through the submissions of the appellant and the assessment order. The contention of the appellant that he was carrying on cheque discounting business in the bank account opened in the name of Vi .....

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ue to take care of the commission involved. However, in the case of the appellant, it is seen that there is no such co-relation between the cheque deposited and the cash withdrawn. For instance on 12th July, 2006 there are two deposits of ₹ 64,745/- and ₹ 65,000/- by cheque in this bank account but the cash withdrawn on that date is only ₹ 60,000/-. Similarly, on 17th July, there are cheque deposits of ₹ 55,273/-, ₹ 69,000/-, ₹ 98,020/- but the amount withdraw .....

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