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2016 (11) TMI 450 - ITAT AHMEDABAD

2016 (11) TMI 450 - ITAT AHMEDABAD - TMI - Adoption of profit @10% of the undisclosed contract receipt - Held that:- The impugned undisclosed receipt was on account of payments directly made by the parties of assessee to the truck owners and tax was deducted at source in the name of assessee. There was a reasonable cause on the part of assessee in not being able to enter such direct payments to truck owners in its books of account. Further the impugned gross receipt cannot be treated as income a .....

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reflected in the related account in the books and the closing bank balance of SB account is also shown in the audited balance sheet as observed by ld. CIT(A). Certainly there is no element of unexplained cash credit so as to invoke provisions of section 68 of the Act as the impugned amount of ₹ 39,21,381/- is duly explained either as business receipt or out of regular cash withdrawal. We therefore, find no reason to interfere with the order of ld. CIT(A) and uphold the same. - Decided aga .....

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/2011 by ITO Wd-9(4), Ahmedabad. 2. Briefly stated facts of the case are that the assessee is an individual engaged in the business of Transport contractor. Return of income for Asst. Year 2009-10 was filed on 24.9.2009 declaring total income at ₹ 2,03,290/-. The case was selected for scrutiny assessment and notices u/s 143(2) & 142(1) of the Act along with questionnaire were issued which were duly replied by the assessee and ld. AR attended from time to time and submitted audited book .....

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of the view that assessee has suppressed receipts of ₹ 16,02,907/- and accordingly made addition of this undisclosed receipts. It was also observed that cash on various dates was deposited in S.B. a/c with ICICI bank Ahmedabad totaling to ₹ 39,12,381/- and in lack of necessary details and evidences from assessee, ld. Assessing Officer invoked the provisions of section 68 and made addition on account of unexplained cash credit at ₹ 39,21,381/-. In total after making an addition .....

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e-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts in adopting the profit @10% of the undisclosed contract receipt. 8. Ld. DR supported the order of Assessing Officer. 9. We have heard ld. DR and gone through the records placed before us. On going through the order of ld. CIT(A) we find that detailed speaking order taking into account all the facts has been passed by ld. CIT(A) sustaining 10% of the undisclosed receipt of ₹ 16,02,907/- by observing as under :- 5. The A.O. on the b .....

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flected by appellant. The appellant has not submitted any explanation before the A.O. and therefore he made addition of this entire amount. During appeal proceeding, appellant contended that his books of account are audited duly supported by bills & vouchers for which A.O. has not given any adverse findings. It was contended that, one of the payer party has paid the freight for transportation directly to the truck owner, who transported the goods of that company and the appellant was to rece .....

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ences to support his contention i.e. from which such party, the said receipt were not accounted. To verify the facts and contention of the appellant, Form No. 26AS as available in the case of appellant for previous year was examined (A print out copy is enclosed with this order as Ann. -A for ready reference,) This form show details in the form of name of the payer/parties from whom appellant received transportation charges, total such received or credited, amount of TDS including surcharges etc .....

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India) Ltd. 16,16,816 36,618 Total ; 60,98,324 1,08,648 Shown by appellant 44,95,316 72,417 Balance 16,03,008 36,231 It is also gathered from the details of return of income filed by appellant that, TDS amount of ₹ 72,417/- was claimed by appellant and not ₹ 1,08,6487- as per this detail. Further the tax audit report in form 3CB & 3CD dt. 21/09/2009 in its profit & loss account shows that appellant credited ₹ 44,95,316/- (Not 44,95,417I- as taken by A.O.)as hire receipt .....

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Pvt. Ltd. 2052841, 46519 Total 4495316 72257 It is therefore, such discrepancy can be attributed for non recording of receipt from M/s Calchem Industries (India) Ltd. and Gulshan Sugar & Chemicals. It is therefore, I am partly inclined with the contention of the appellant that he was not informed nor given TDS certificate by M/s Calchem Industries (India) Ltd. in respect of freight paid by them directly to truck owner for transportation of Goods but name of appellant was included in the ret .....

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given credit of TDS of ₹ 1,08,648/- though it claimed only ₹ 72,417/-, the income from the corresponding receipt of ₹ 16,03,008/- has to be considered and not the entire receipt. The appellant also contended the same by relying on Hon'ble Gujarat high court order. It is in this regard, the P & L account of appellant reflect that out of total receipt of ₹ 44,95,316/-, the appellant claimed hire charges of ₹ 40,45,784/- i.e. the gross profit is shown at ₹ .....

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₹ 14,42,607/-(16,02,907 - 1,60,300) is directed to be deleted. The appellant gets relief accordingly. As per demand notice u/s 156 of the Act dt. 17/10/11, it is gathered that interest u/s 244A of ₹ 5,687/- is charged i.e. the appellant was granted refund while processing u/s 143(1) of the Act. Therefore though no such ground is made by appellant in grounds of appeal but the basis of addition is on account of form 26AS and TDS deduction, the A.O. is directed to verify about the credi .....

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n not being able to enter such direct payments to truck owners in its books of account. Further the impugned gross receipt cannot be treated as income as it is in the nature of freight charges and the profits element in the impugned receipt can only be taxed and not the gross amount. Therefore, ld. CIT(A) has rightly sustained the addition to the extent of 10% of the gross receipt. We find no reason to interfere with the finding of ld. CIT(A). We uphold the same. This ground of Revenue is dismis .....

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at the impugned bank account in which cash was deposited stands duly disclosed in the regular books which have been audited and all the transactions shown in this impugned bank account are duly accounted for in regular books. 13. We further observe that ld. CIT(A) has given a clear finding on this issue and has deleted the addition by observing as below :- Now coming to other ground against the addition of ₹ 39,21,381/- u/s 68 of the Act on the fact that appellant s bank account at ICICI b .....

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such decision, I am not inclined* with appellant that in spite of the fact that he had not offered any explanation for the source of such cash deposit in bank account, the A.O.'s finding which is in conformity of unexplained cash deposited in substance be setasided just on technical reason that he made addition u/s 68 of the Act. In my view, section 292B of the Act will take due care of such asstt. and I myself has the power coterminous with that of A.O. and to replace the part or portion o .....

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01518551 with ICICl bank, Maninagar branch was examined for the period 01/04/08 to 31/03/09. It is worth noting at this moment that this bank account is duly reflected by appellant in his books of account since the closing bank balance of ₹ 2,224/- is duly tallied in its audited balance sheet.ylt is verified that the appellant deposited ₹ 70,49,895/- (both cash & cheque including transfer entries) in this account and withdrawn ₹ 70.59.164/- (both cash & cheque includina .....

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appellant is in receipt of hire charges in cash also. Considering the contra entries out of such deposit and withdrawals, I am inclined with the contention of the appellant that all the entries as appearing in this disclosed bank account is from the business transactions of the appellant. The cash so deposited of ₹ 39,21,482/- (7049895 - 3128413) is either receipt of business or made out of the withdrawals from this account beside the contra entries. It is therefore such deposit is explain .....

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