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2016 (7) TMI 269 - ITAT KOLKATA

2016 (7) TMI 269 - ITAT KOLKATA - TMI - Undisclosed business - entitlement to telescoping benefit - Held that:- We find lot of force in the arguments of the Learned AR that the profit determined is nothing but the income earned by the assessee from his undisclosed business. This receipt is outside the books of the assessee. Correspondingly, any payments / investments made outside the books of the assessee would be entitled for telescoping and hence we direct the AO to delete the additions made t .....

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t the AO to delete the additions made towards undisclosed purchases and towards difference in sundry creditors balances. - Addition towards cash deposits made by the assessee in the Savings Bank Account - Held that:- . We find that both the parties have agreed for setting aside of this issue to the file of the Learned AO. We accordingly direct the Learned AO to compare the turnover disclosed by the assessee in its regular books and in the returns and compare the same with the cash deposits .....

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lant : Shri M. D. Shah, AR For The Respondent : Shri Debasish Lahiri, JCIT, Sr. DR ORDER Per Shri M. Balaganesh, AM: These appeals by assessee are arising out of separate orders of CIT(A)-XXXII, Kolkata vide Appeal Nos. 84 & 152/XXXII/10-11/49(1)/Kol dated 18.10.2012. Assessments were framed by ITO, Ward-49(1), Kolkata u/s. 143(3) of the Income tax Act, 1961 (hereinafter referred to as the Act ) for AYs 2008-09 & 2009-10 vide his separate orders dated 26.11.2010 and 19.12.2011. As the is .....

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is bad-in-law. 3. For that the determination of profit on the basis of percentage is based on guess work which is bad-in- law. 4. For that the disallowance of Security deposit is based on guess work which is bad-inlaw. 5. For that the disallowance of expensed on account of advertisement is bad-in-law. 6. For that the disallowance of difference of Bank balance and Job charges the basis of NSDL statement is bad-in-law. 7. For that the disallowance of sundry creditors of ₹ 4,39,975.00 is base .....

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iness under the name and style of M/s Mondal Construction & Electrical Works and M/s Mondal Builders . The assessee filed his return of income on 26.8.2008 for the Asst Year 2008-09 declaring taxable income of ₹ 1,45,030/- and agricultural income of ₹ 7,290/-. During the course of assessment proceedings, the Learned AO observed that the assessee deposited ₹ 67,85,600/- in the concealed savings bank account maintained with Axis Bank and ₹ 39,60,200/- in the concealed c .....

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evidence was filed by the assessee to prove that the same are sundry debtors. The Learned AO treated the entire transactions as turnover of the assessee to the tune of ₹ 1,10,12,707/- (67,85,600 + 39,60,200 + 2,66,907) and the Learned AO determined the undisclosed turnover at ₹ 71,90,737/- after reducing the disclosed turnover in the books of ₹ 38,21,970/-. He applied the profit percentage offered by the assessee at 8.09% on the undisclosed turnover and brought to tax a sum of .....

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he assessee as on 31.3.2008. The Learned AO also observed that the assessee had earned interest income of ₹ 11,447/- on the said security deposit from M/s Ultratech Cement Ltd which was also not offered by the assessee in the return. The Learned AO brought both the transactions to tax as income from undisclosed sources. 3.2. The Learned AO also observed that there was a difference in the bank balance with UCO Bank maintained by the assessee to the tune of ₹ 9,368/- (19568-10200) for .....

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shown total purchases of ₹ 37,02,949/- in the return and whereas as per the information obtained and as per assessee s submission, the following purchases were made by the assessee:- M/s Ultratech Cement Ltd ₹ 28,27,500 M/s Grasim Industries Ltd ₹ 3,49,880 Stone Cheeps, Sand etc ₹ 98,303 Rod ₹ 13,52,446 ₹ 46,28,129 Less: Purchases disclosed by the assesee ₹ 37,02,949 Difference ₹ 9,25,180 The Learned AO found that since no satisfactory explanation .....

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ively. Since the assessee could not reconcile the difference in the balances of sundry creditors, the Learned AO brought the difference in closing balance of ₹ 4,39,945/- to tax as income from undisclosed sources. 3.6. The Learned AO also observed that going by the family size of the assessee and heavy medical treatment of parents to be undertaken, the drawings shown by the assessee at ₹ 52,147/- was considered very low and hence he made an addition of ₹ 43,853/- on the ground .....

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he dismissed the appeal. Aggrieved, the assessee is in appeal before us. 5. The Learned AR argued that since the Learned AO had resorted to estimation of profit @ 8.09% on the undisclosed turnover and made an addition of ₹ 5,81,730/- thereon, there is no need to make further addition towards difference in the balance of sundry creditors to the tune of ₹ 4,39,945/-; addition towards difference in purchase of materials amounting to ₹ 9,25,180/- as the same would get covered in t .....

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ccounted purchases and similarly with the closing balance of sundry creditors. Since the profit on undisclosed business was determined at ₹ 5,81,730/- , no separate addition need to be made on these accounts. He further argued that the undisclosed income determined at ₹ 5,81,730/- would explain the sources for making investment in security deposit with M/s Ultratech Cement Ltd to the tune of ₹ 1,78,496/- and addition made towards difference in bank balance to the tune of ₹ .....

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balances were made as income from other sources and hence the income from undisclosed business determined at ₹ 5,81,730/- would not be available for telescoping thereon. He accordingly relied on the order of the Learned AO. He did not advance any specific arguments with regard to the other additions contested by the assessee. 6. We have heard the rival submissions and from the facts and circumstances of the case, we find lot of force in the arguments of the Learned AR that the profit dete .....

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68/-. Similarly we hold that since the profit determined at ₹ 5,81,730/- would be profit from undisclosed sources, there should not be any separate additions made towards excess purchases and difference in sundry creditors balances as the same are to be construed only for the undisclosed businesses. The Learned DR was not able to bring any contrary evidence to this effect before us. Hence we direct the Learned AO to delete the additions made in the sums of ₹ 9,25,180/- towards undisc .....

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008-09 is partly allowed. ITA No. 2218/Kol/2013 - Asst Year 2009-10 - Assessee Appeal 8. The only issue to be decided in this appeal is as to whether the Learned AO is justified in making an addition of ₹ 19,86,370/- towards cash deposits made by the assessee in the Savings Bank Account No. 548010100000684 maintained with Axis Bank, Basirhat during the Financial Year 2008-09 based on AIR information. The Learned CITA disposed off the appeal ex parte for want of presence of the assessee or .....

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