TMI Blog2016 (6) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... l cash deposit as turn over incorrectly. Further before us the AR of the appellant has submitted a CBDT instruction dated 8th September 2010, which also says that the scrutiny in cases selected through AIR, would be restricted to that information only. In case the escapement of total income of more than ₹ 10 lacs then only the case may be taken up for wider scrutiny after the approval of the administrative Commissioner. In the present case the addition made by the AO u/s 44AD on undisclosed turnover is ₹ 10,47,947/-. Therefore, it satisfied the first condition of potential escapement of income exceeding ₹ 10 lacs. However it is not clear whether the approval of the administrative Commissioner has been obtained or not. Ld. DR also could not submit that such approval is taken. In view of above facts in the interest of justice the whole issue of addition of ₹ 6,54,967/- is set aside to the file of the AO with the following direction :- a) To determine the exact turnover of the assessee based on the letter dated 27.1.2014 and 17.2.2014 with respect to the cash book submitted by the assessee and cash deposited in bank accounts and then estimate profit thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings are in violation of Sec.119 of the Income-tax Act vis-a-vis Article 141 227 of the Constitution and therefore, void abinitio. 2) That the CIT(A) erred in giving only a partial relief and further failed to appreciate that the Assessing Officer erred : a) in calculating and treating the cash deposit of ₹ 1 ,30,99,337/- as additional sales and further estimating profits on such depositing @ 8% u/s. 44AD and considering such profits (Rs.10,47,947/-) as income from undisclosed sources u/s. 68 of the Income-tax Act, 1961; b) in not accepting turnover of ₹ 40,58, 112/- u/s. 44AD; c) in ignoring the statutory provision of Sec.44AD(5), i.e., exemption from maintaining books of account [Sec.44AA(2)(vi)] and audit [Sec.44AB]; d) in not considering that in view of applicability of Sec.44AO, the assessee was not under obligation to explain individual entry of cash deposit in the bank unless such entry had no nexus with the gross receipts; e) in failing to consider that the revised return substitute the original return from the date of filing the original return for the purpose of assessment; f) in not understanding the basic principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit thereon u/s 44AD of the Act amounting to ₹ 3,24,649/-. 4. Based on information received on annual information return, it was found that assessee has deposited ₹ 1,50,05,020/- in cash in his two bank accounts maintained with the ICICI Bank Ltd. during the year. Assessee was asked to file copies of various bank accounts and from those bank accounts it was found that assessee has deposited cash of ₹ 1,49,27,092/- in ICICI Bank, ₹ 3,11,621/- in Oriental Bank of Commerce , ₹ 3,80,800/- in State Bank of India and ₹ 1,83,500/- in Punjab National Bank. Therefore total bank deposits in cash amounted to ₹ 1,58,03,013/-. Before the AO, the Ld. AR failed to furnish the evidences to substantiate the business activities carried out by the assessee during 1.4.2010 to 31.3.2011. Even then the Ld. AO has estimated the total profit @ 8% on ₹ 1,30,99,337/- estimated 8% profit thereon and made addition of ₹ 10,47,947/- to the total income of the assesse and determined assessed income at ₹ 15,88,090/-. Aggrieved by the order of the AO the matter was carried before Ld. CIT(A). Ld. CIT(A) rejected the contention of the assessee and hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... showing cashbook of the assessee from 1.4.2010 to 31.3.2011. This letter also contained bank statement showing deposits and withdrawals along with summary of sales. It is an admitted fact that according to the profit and loss account submitted by the assessee at page No. 106 of the paper book sales is only of ₹ 40,58,112/-. However, the assessee has explained the total cash deposit of ₹ 1,58,03.013/- in five bank account. The claim of the assessee is that sales of the assessee is only ₹ 40,58,112/- and other receipts are on account of other cash transactions which are interbank transactions, i.e. cash deposit from one bank is out of cash withdrawal from other banks. Therefore such transaction prima facie cannot be unaccounted turnover of the assessee. Undisputedly such transactions cannot be considered for estimating the business income of the assessee. Furthermore assessee has given a reconciliation of the amount of cash deposited of ₹ 1,49,27,029/- in ICICI Bank stating that ₹ 82,54,580/- is cash deposit out of cash withdrawals from various banks. It was further stated that ₹ 5,50,000/- is received in cash from debtor s outstanding. The AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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