Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

ITO, Ward-3, Raigad Versus Mr. Mustansir Mohammedali

2016 (8) TMI 461 - ITAT PUNE

Addition u/s 68 - undisclosed bank account - Held that:- Admittedly, the bank account maintained with HDFC Bank Ltd., which was not disclosed by the assessee in the impugned assessment year, was also not disclosed by the assessee in the immediately preceding assessment year. During the course of assessment proceedings in 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 b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es. Therefore, we are of the considered opinion that those debit entries cannot be ignored altogether. Since the Ld.CIT(A) after considering the totality of the facts of the case has sustained addition of ₹ 15,30,602/- which is the peak credit in the bank account as on 29-12-2009, therefore, we do not find any infirmity in the order of CIT(A) - ITA No.718/PN/2014 - Dated:- 30-6-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Appellant : Shri Anil Chaware For The Respondent : .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aving 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 ₹ 75,44,655/- out of which ₹ 57,98,000/- has been deposited in cash and ₹ 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 c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4,653/-. The net profit was worked out at ₹ 6,03,973/- which amounts to 8.01% of the turnover. It was accordingly requested that the profit of ₹ 6,03,973/- representing his income from sale proceeds of his undisclosed business may be taxed. 3. However, the AO was not satisfied with the explanation given by the assessee. He observed that the said bank account was never disclosed and the transactions carried out in the bank account was also not disclosed. As regards the reply of the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the firm has been deposited in the undisclosed bank account. He further noted that the assessee has deposited cash on 146 occasions during the year which shows that the assessee prefers not to hold cash in hand and rather to 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 ₹ 75,44,775/- which is the am .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.Y. 2009-10 had made total addition of ₹ 5,21,990/- which amounted to 10.79% of the total credits in the bank account amounting to ₹ 48,39,641/-. The above amount was determined by disallowing an amount of ₹ 2,22,717/- being 5% of the purchases over and above the net profit of ₹ 2,99,273/- determined by the assessee on account of such credit entries. Since in the impugned assessment year such profit works out to ₹ 6,03,973/- the same should have been accepted by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

#8377; 15,30,602/- as against ₹ 75,44,655/- added by the AO by observing as under : 12. I have considered the appellant s submissions, the observations of the A.O. in the assessment order and the facts of the case. Admittedly, the bank account with HDFC bearing Account No.01041930001989 was not disclosed in the books of account or in the return of income. The credit entries in the bank account amounting to ₹ 75,44,655/- have been stated to be the sale proceeds of the appellant s undi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 available on record to show that the credit entries in the appellant's account with HDFC Bank represent the sale proceeds of his business of sale of timber and plywood. Therefore, the credit entries in the bank accoun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Therefore, the addition on account of unexplained entries in the appellant's bank account is restricted to ₹ 15,30,602/-. The A.O. is directed accordingly. 6. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : 1. On the facts and in the circumstances of the case, and in law, the Ld.CIT(A)-I, Thane has erred in restricting the addition of ₹ 75,44,775/- made u/s.68 on account of unexplained credits in assessee s bank account to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

epresentative 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 tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of ₹ 5,21,990/- only as against the total deposits of ₹ 48,39,641/-. 9. Referring to the copy of the bank account he submitted that there were various debit entries and credit entries apart from certain cash deposits. The deposits in the said bank account has been treated as sale proceeds by the same AO in the preceding assessment years. Therefore, under identical facts and circumstances the AO cannot held that the deposits in the impugned assessment year are not the sale proceeds. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ok maintained by the assessee or at his instructions 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 ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

before us. We find the assessee in the instant case has not disclosed the bank account maintained with HDFC Bank Ltd., where substantial deposits were made in cash as well as cheque. There are also various withdrawals from the said bank account. We find the AO rejecting the explanation given by the assessee that only profit should be taxed on the deposits, made addition of ₹ 75,44,775/- u/s.68 of the I.T. Act being the unexplained cash credits in the bank account maintained with HDFC Bank .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version