TMI Blog2016 (12) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... t income of assessee @ 10% on the turnover of ₹ 23.05 lacs. Thus the appeal of the assessee is partly allowed. - ITA No. 594/JP/2016 - - - Dated:- 26-9-2016 - Bhagchand, Accountant Member Shrawan Kumar Gupta, Adv. for the Assessee R.A. Verma, Addl.CIT DR for the Revenue ORDER Per Bhagchand, AM The assessee has filed an appeal against the order of the ld. CIT(A)-III, Jaipur dated 29-03-2016 for the assessment year 2006-07 raising therein following grounds of appeal. 1.1. The impugned order u/s 144/147 dated 18-03-2014 is bad in law and on facts of the case for want of jurisdiction, barred by limitation and various other reasons and hence the same may kindly be quashed. 1.2 The action u/s 147 is bad in law and on facts of the case, for want to jurisdiction and various other reasons and hence the same may kindly be quashed. 2. ₹ 22,19,000/- The ld. CIT(A) has grossly erred in law as well as on the facts of the case in sustaining the addition of ₹ 22,19,000/- on account of cash deposits in the bank account which was from the business receipts or sale proceeds of assessee's business of building material supply. Hence, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 75/- is the bank account. On being asked to explain the same, the assessee did not appear nor filed return of income before the AO. So assessment was made u/s 144. Before me the assessee submitted that he is engaged in business of building material and filed a computation of income declaring total income of ₹ 1,05,756/- by declaring 5 % profit of total turnover of ₹ 23,05,000/- u/s 44 AF and further claimed deduction u/s 80C and field a challan of payment of ₹ 150/- on 10.02.2016. However no return of income was filed before AO or me. Only computation was filed. He further filed purchase / sale / account and cash flow statement. The AO in remand report stated that the assessee contention cannot be accepted in absence of purchase and sale bills. He said that the fact of business of building material has not been established / proved. Regarding the computation of income, the assessee has not made a claim in return therefore, this claim cannot be accepted because of Goetze India , 248 ITR 232 (2006) (SC) wherein the benefit cannot be given. Regarding the contention of the assessee that cash was deposited from the withdrawals made and that ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 2. Remand report not considered fully by the ld. CIT(A):- When the assessee has filed all the details and account before the ld. CIT(A) as an additional evidence and the ld. CIT(A) has send the same to the ld. AO for his comments. In the remand proceedings the A/R of the assessee appeared and explained full facts and details. Thereafter the ld. AO has send his remand report dated 25.02.2016(PB32). In which he has accepted our contents. He has stated at para 2 (PB32) that details and reply furnished by the assessee has been examined, in which the facts and return or reply stated by the assessee revels/seems correct. However he further stated that the assessee has not filed bills and vouchers and assessee is not a regular assessee. Hence additional evidence should not be accepted. In this regard it is submitted that the AO has accepted the contention of the assessee but he has stated further due to not available bills and vouchers, the same should not be accepted. The assessee is a retail trader and he is not required to keep books of accounts u/s 44AF. The business of the assessee has been proving from the bank statements itself. There is no adverse in the reman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atural justice. When from the copy of bank statement it is very clear that there were credit as well as debit entries related to cash deposited and withdrawn mostly through cheque respectively from such bank account. For example assessee made payment to M/s Bharat Agencies, from whom cement purchase, Bairabh Framing center, Santosh Building material suppliers, which shows nature of business. Vide copy of Bank statement or bank book(PB1-9). If we treat it as non books of accounts case than the profit on the total turnover of ₹ 23,05,000/- taking the entire cash deposits in bank account and other sales if any remained than the profit u/s 44AF comes to ₹ 115250/- which at the worst may kindly be treated income of the assessee not the entire sale of ₹ 23,05,0000/-. However the ld. CIT(A) has failed to compute the correct position in the best judgment appellate proceedings in this respect. In the present case the Ld. AO has not mentioned the section under which he has assessed the income treating the deposits as unexplained and out of undisclosed source of income. The arbitrary addition was made just on assumptions and presumptions only. The opinion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax under the head Profits and gains of business . However, the said provisions are applicable where the gross receipts paid or payable do not exceed ₹ 40 lacs. Para 7 .Once under the special provision, exemption from maintaining of books of account has been provided and presumptive tax @ 8 per cent of the gross receipts itself is the basis for determining the taxable income, the assessee was not under obligation to explain individual entry of cash deposit in the bank unless such entry had no nexus with the gross receipts. The stand of the assessee before CIT(A) and the Tribunal that the said amount of ₹ 14,95,300 was on account of business receipts had been accepted. Learned counsel for the appellant with reference to any material on record, could not show that the cash deposits amounting to ₹ 14,95,300 were unexplained or undisclosed income of the assessee. Here is the same position. 6.2 In the case of CIT v/s Pradeep Shanti Lal Patel 221 Taxman 436(Guj) it has been held that Learned CIT(A) had restricted addition to extent of ₹ 1.80 lacs by way of business income from retail trade of assessee. It had held that considerable force in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) held ...3. So far as the first question is concerned, the Tribunal found the fact that peak credit of the bank account cannot be treated as unexplained income of the assessee. However, while deleting the additions made as unexplained cash credit, the Tribunal restored the issue for all the four years to the file of the AO with the direction to give a fresh finding in the light of Tribunal's observations. The peak credit of the bank account cannot be held to be undisclosed income of the assessee. Obviously, the banking transaction in regular course of business cannot be considered as cash credit so as to invoke s. 68 of the Act and so far as whether the finding that bank transaction represents undisclosed income of the assessee, it is open to be inquired as has rightly been done by the Tribunal, therefore, this does not give rise to any substantial question of law. 4. So far as the second issue is concerned, s. 44AF in terms is clear that it applies only to wholesale (sic-retail) trader who is (sic-not) involved in wholesale trade. The Tribunal has come to the conclusion that Revenue has failed to prove that assessee was rightly assessed when he has produced document bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the Bank statements and narration in those bank statements, it is noticed that the purchases of the assessee was through cheque which establishes the trading business of the assessee. It is further noticed that assessee had furnished the sales accounts, purchase accounts and cash flow statements, bank A/c etc before the authorities below. It is further noted that the assessee is a retail trader and the assessee is not required to maintain books of account as per provision of Section 44AF and the case of the assessee fall u/s 44AF of the Act. Further the ld. AR has drawn the attention of the Bench to the decision of the Coordinate Bench in the case of ITO Kishangarh vs. Shri Pushpendra Kumar Jain in ITA No. 289/JP/2012 dated 01.01.2016 wherein the ITAT Bench had followed the decision of Smt. Anita Choudhary in ITA No. 733/JP/2009 dated 07.05.2010 and the same had been affirmed by the Hon'ble Jurisdictional High Court in DBIT No. 289/2010 in the case of Smt. Anita Choudhary. It is also noted that in the case of ITO Kishangarh vs. Sh. Pushpendra Kumar Jain (supra), the ITAT Jaipur Bench had treated the cash deposit in the bank account of the assessee as undisclosed turnover o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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