TMI Blog2016 (10) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... business was rightly estimated at ₹ 2,89,150/ by the Ld. CIT(A) which does not need any interference on my part, hence, uphold the same and dismiss the ground raised by the Revenue. - ITA No. 6281/Del/2015 - - - Dated:- 31-8-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER For The Department : None For The Assessee : Shri Tarun Kapoor, FCA ORDER PER H.S. SIDHU, J.M. The Department has filed the Appeal against the impugned order dated 08.9.2015 of Ld. CIT(A)-20, New Delhi pertaining to assessment year 2009-10. The grounds raised in the revenue s appeal reads as under:- On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the following additions: 1. In the facts and circumstances of the case, the Ld. CIT(A) has grossly erred in accepting the contention made by the assessee that total cash deposited in bank may be treated as business receipt and applied provision of section 44AD, and total business profit may be taken @8% of the total receipts/ deposits as against the addition made u/s. 68 on account of cash deposit of ₹ 36,14,384/-, without appreciating the fact that assessee failed to substantiate her clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l time job at above mentioned CA firm how can operate a business covering all India stations. AO observed that it is not possible to manage the business activity routed through different places in India. Further on examining the purchase and sale bills it was found that the parties name are not mentioned on any bill. She further stated that she was doing trading of tyre but her bank statement reveals that the money deposited at different stations in India. The notices u/s. 133(6) were issued to the persons to whom she had purchased the material and reply was received from all the persons and no one has made the vouchers in the name of assessee. They only simply gave the answer that they are doing business. In support of bill nobody give any confirmation in the name of assessee. Therefore, AO observed that no business done by the assessee and the cash deposit made by the assessee in their bank was treated as an undisclosed income and added u/s. 68 of the Income Tax Act of the assessee. The AO has completed the assessment at ₹ 37,59,560/- by making the addition of ₹ 36,14,384/- vide his order dated 18.3.2014 passed u/s. 143(3) of the I.T. Act, 1961. 3. Aggrieved with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced sale/purchase bills. 6. It has also been found that in the bank accounts that there were frequent cash withdrawals against the cash deposits. 5.4 During the course of appellate proceedings, bills and vouchers showing sale/purchases were also produced. Such bills/vouchers were also produced before the A.O also during assessment proceedings. There is a reasonable inference that the appellant was doing sale/purchase of auto tyres during the relevant period. The cash deposits and withdrawals are found to be in the range of ₹ 4,OOO/- to ₹ 50,OOO/-. {5.5} Taking into the facts and circumstances of the case following 3 alternatives have emerged; 1. Scenario No.1: Treat the entire cash found deposited in the undisclosed bank account as unexplained u/s 69 of the Act and tax accordingly. (undisclosed income; ₹ 36,14,384/-) 2. Scenario No.2: Take the cash receipts as business receipts and accordingly estimate gross Profit rate as under; i. At the rate of 8% of the gross receipt as per section 44AD then the income comes to ₹ 2,89,150/- ii. If The Hon'ble High Court of Gujarat in the case of CIT vs President Industries as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A. O. without considering the increase in expenses, made the addition of entire turnover whereas the fact remains that if there was concealed turnover, there must have been some concealed expenses also which must have been incurred' and the A. O. should have considered the claim of expenses also. Though the assessee did not furnish vouchers and bills for the expense yet the AO should have taken guidance from the provisions of Section 44AD which provides determination of net profits on the basis of 8% of gross receipt in the case of small traders. From the figures of turnover of assessee, we find that assessee also falls in the category of small traders and his undisclosed income should have been calculated on the basis of certain percentage on undisclosed turnover. The Hon'ble High Court of Gujarat in the case of CIT vs President Industries as relied upon by Ld. AR. placed at paper book page 45 has held that the amount of undisclosed sales by itself cannot represent the income of the assessee and the sales only represent price received by seller of goods but for achieving of such sales, it had already incurred the cost. The above case law relied upon by Ld. AR. squarely ..... X X X X Extracts X X X X X X X X Extracts X X X X
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