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2016 (10) TMI 697 - ITAT DELHI

2016 (10) TMI 697 - ITAT DELHI - TMI - Estimation of income - profit may be taken @8% of the total receipts/ deposits as against the addition made u/s. 68 on account of cash deposit - Held that:- In the present case, the assessee has not disclosed the income from the business in her return of income filed for AY 2009-10 and it is only after the AO has unearthed the undisclosed bank accounts and confronted with the facts, that the assessee had disclosed it before the AO. But later in the assessme .....

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part time businesswoman and this is the first year of her business venture and bills/vouchers were produced. Accordingly, taxable income from 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 .....

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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 claim regarding cash deposits of ₹ 36,14,384/-. The appellant craves, leave to add or amend or modify the grounds of appeal at any time. It is prayed that the order of the CIT(A) is contrary to the fa .....

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2008-09. Accordingly, notice u/s. 133(6) was issued to Manager, Punjab National Bank, Kirti Nagar and Bank statement of the period 1.4.2008 to 31.3.2009 was obtained. While examine the statement it was found the cash was deposited at different stations i.e. Vidisha, Jind, Kolkata, Rewa, Jabalpur, Shivpuri, Bhopal, Nawadah, Faridabad, Aligarh, Malda, Sonipat etc. and on examining the cash deposit pattern it is observed that cash deposit was made less than ₹ 50,000/- to avoid to provide PAN .....

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ee was recorded on oath on 26.2.2014. After examining the return, Bank statement, statement recorded on oath and purchase and sale bills filed by the assesse it was observed that the assessee has not declared the business income in her e-filed return. Later on during the course of assessment proceedings the assessee declared that she was doing business also. But in her return of income she declared only salary income and in her statement also she stated that she was taken salary of ₹ 1,44, .....

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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 ob .....

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er dated 08.9.2015 has deleted the addition in dispute and partly allowed the appeal of the assessee. 4. Now the Revenue is aggrieved against the impugned order and filed the present appeal before the Tribunal. 5. In this case, Notice of hearing to the parties were sent, in spite of the same, Department Representative not appeared to prosecute the matter in dispute, nor filed any application for adjournment by the Department. Keeping in view the facts and circumstances of the present case and th .....

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accordingly, the appeal of the Revenue may be dismissed. 7. I have heard the Ld. Counsel of the assessee and perused the records, especially the impugned order passed by the Ld. CIT(A). I find that Ld. First Appellate Authority has elaborately discussed the issue in dispute by considering the submissions of the assessee and adjudicated the issue vide pages 4 to 9 of the impugned order. The said relevant paras are reproduced as under:- 5.3 I have carefully considered the assessment order and subm .....

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w Kirti Nagar, New Delhi. 4. That a total of ₹ 36, 14,384 was found deposited during the relevant period. 5. that the appellant, during the course of assessment proceedings had claimed that she was doing business of trading in auto tyres. And 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 .....

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ount 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 relied upon in the Hon'ble ITAT Delhi bench judgment in the case of I.T.A. No. 2410 .....

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ANo.1155/Ahd/2011 [Asstt.Year: 2007-2008] Smt. Manjulaben Champak!al 3. IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI ITA no. 893, 894, 895, 896 & 1487/Mum.l2011 (AYs : 2003-04, 2005-06, 2006-07, 2008-09 & 2007-08) 3. Mr. Alpesh B Gada In the Income Tax Appellate Tribunal Delhi Bench : A: New Delhi ITA No. 1159/Del/2011 Assessment year 2005-06 If we treat the cash receipts as business receipts and take the peak cash of the bank accounts i.e PNB- 014S000100595294, ͅ .....

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In this regard it is worthwhile to take a cue from the judgment in the case of THE INCOME TAX APPELLA TE TRIBUNAL (DELHI BENCH 'D " NEW DELHI) I.T.A. No. 2410/Del/2013 Assessment year: 2009-10 Shri Kayyum Ahamed, Date of pronouncement: 22.05.2015 During the year under consideration, the assessee claimed that due to fault in the data in computer, the balance sheet and P & L account prepared and submitted to income tax Department contained wrong figures. We find that the A.O. on the .....

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ses 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' .....

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gh Court we hold that entire turnover cannot be added to the income of assessee and profits embedded in the turnover can only be taxed. The assessee did not produce vouchers / bills to support the increase in expenditure in his revised P & L account. Therefore, instead of 8% of turnover to be included as profits on undisclosed turnover, we hold that an amount equivalent to 12% of turnover be included in the income of the assessee. In view of the above, the A O. is directed to delete the addi .....

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