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TMI Blog2016 (8) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings the AO observed that the assessee was having a Savings Bank Account with HDFC Bank Ltd. bearing Account No.01041920001989 which has not been disclosed by the assessee to the Department. The total deposits in the said bank account amounts to Rs. 75,44,655/- out of which Rs. 57,98,000/- has been deposited in cash and Rs. 17,46,655/- by cheque. He, therefore, asked the assessee to explain the source of such cash and cheque deposits made in the said undisclosed savings bank account. It was submitted by the assessee that the credit entries in the bank account represented sale proceeds of Timber and wood trading business done by him in his proprietary capacity. The debit entries in the account represented payments made by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit cash in the bank account as and when raised/earned. Further, the deposits are also in bigger denominations. Rejecting the various explanations given by the assessee and invoking the provisions of section 68 the AO made addition of Rs. 75,44,775/- which is the amount deposited in the bank account. 4. Before CIT(A) it was submitted that during the course of immediately preceding assessment year, i.e. 2009-10 the same savings bank account with HDFC Bank was not disclosed wherein the total credits were Rs. 48,39,641/-. The profit and loss account was prepared on the basis of credit entries in the bank account. The gross profit was determined at Rs. 3,67,163/- and net profit was shown at Rs. 2,99,273/-. The AO in the assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timber and plywood done in his proprietary capacity. The Profit & Loss Account on the basis of entries in the bank account has been prepared by the appellant and filed before the AO., working out the net profit from this undisclosed business of Rs. 6,03,973/-. In this regard, it is seen that though the A.O. had accepted the appellant's contention regarding the credits in the bank account with HDFC being the sale proceeds from his business of sale of timber and plywood in the immediately preceding year but on what basis the AO. had accepted this contention of the appellant has not been mentioned in the assessment order for the A.Y. 2009-10. During the year under consideration also, no documentary evidence or any other details are availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d.CIT(A)-I, Thane, may be vacated and that of the Assessing Officer be restored. 3. The appellant craves leave to add, amend or alter any ground/grounds, which may be necessary." 7. The Ld. Departmental Representative strongly challenged the order of the CIT(A). He submitted that when the assessee had not disclosed the bank account where substantial deposits were made the Ld.CIT(A) was not justified in bringing to tax only peak amount instead of taxing the entire deposits made in the said bank account which was not disclosed to the Department. Further, the assessee has also failed to explain the source of such cash and cheque deposits in his undisclosed bank account. He accordingly submitted that the order of the CIT(A) be reversed and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and therefore the cash credit for the previous year shown in the assessee's bank passbook but not shown in the cash book maintained by the assessee in that year does not fall within the ambit of section 68 of the I.T. Act and therefore the amount so credited is not chargeable to tax as the income of the assessee of that previous year. He accordingly submitted that no disallowance u/s.68 should have been made by the AO on account of deposits made in the bank passbook. However, since the assessee has not challenged the amount sustained by the Ld.CIT(A) and since the Ld.CIT(A) has restricted the addition only to the peak credit, therefore, the order of the CIT(A) be upheld and the ground raised by the revenue should be dismissed. 10. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preceding assessment year the AO had confronted the same to the assessee and the assessee had prepared a profit and loss account on the basis of those deposits in the said bank account and had disclosed net profit of Rs. 2,99,273/-. The AO had determined the income at Rs. 5,21,990/- on account of such bank deposits of Rs. 48,39,641/- by making disallowance of Rs. 2,22,717/- being 5% of the purchases. Therefore, when the very same bank account was not disclosed for this year also, we do not find any reason as to why the AO has taxed the entire deposit of Rs. 75,44,655/- especially when the bank account contains both debit entries and credit entries. Therefore, we are of the considered opinion that those debit entries cannot be ignored a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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