TMI Blog2020 (10) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... nd evidence produced by the assessee, the addition made by the AO is not sustainable. Accordingly, the said addition made by the AO on account of turnover of the assessee is deleted. Net profit rate applied by the AO at 8%, since the main issue of enhancing the turnover of the assessee is decided in favour of the assessee, therefore, this issue becomes infructuous. We may clarify that the AO has not enhanced the NP rate but applied the same NP rate which was declared by the assessee in the return of income. Therefore, the assessee has no merit on this issue. Appeal of the assessee is allowed. - ITA No. 594/JP/2019 (Assessment Year : 2015-16) - - - Dated:- 11-8-2020 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted that part of the cash deposit is representing the sales of the assessee and part is earlier withdrawals of cash from the bank account. The AO was not satisfied with the explanation of the assessee and took the entire credit in the bank account of ₹ 79,74,414/- as the turnover of the assessee and applied NP rate of 8%. Accordingly, the AO has arrived at the total income of the assessee at ₹ 10,50,729/- as against the income declared by the assessee at ₹ 5,00,400/-. The assessee challenged the action of the AO before the LD. CIT (A) and submitted that the credit and deposits made in the bank account are mainly representing the loans taken from family members and earlier withdrawals of the assessee. Further, some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 16,89,100/- from Ms Padma Mundra, sister of the assessee and the details of the said loan was furnished before the AO as part of the cash book, ledger account and bank statements. Further the loan of ₹ 6,47,500/- was taken from Shri Gopal Mundra which is also reflected in the documents produced by the assessee before the AO. Thus the loan taken from the family members is the amount representing the deposits and credits in the bank account. The ld. A/R has further pointed out that a sum of ₹ 12,18,000/- is representing the transfers from one bank account to another bank account. This is a matter of record but the AO has ignored all these facts. These items which include the turnover, salary income, loans taken from the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the rival submissions and considered the relevant material on record. There is no dispute that the assessee has declared the Net Profit on presumptive basis under section 44AD of the IT Act @ 8%. The assessee has declared the turnover of ₹ 10,95,300/- on which NP of ₹ 87,624/- was declared in the return of income, though the assessee has also declared the income from salary and income from other sources total of ₹ 5,00,400/-. During the limited scrutiny assessment the AO asked the assessee to explain the cash deposit in the bank account of ₹ 55,41,481/-. This fact has been recorded by the AO in para 3 of the assessment order as under :- 3. During the proceedings, assessee was asked to furnish explanation in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and bank statements are duly matched and reconciled. Even the AO has not pointed out any discrepancy in respect of any transaction shown in the loan ledger account, cash book and bank account statements of the assessee. The assessee has given each and every transaction datewise, bank account details in the narration of the transaction in the ledger and the corresponding entries are also recorded in the cash book and matching with the assessee s bank account statements. Therefore, once these amounts are reflected in the bank account statements, ledger account and cash book produced by the assessee, then in the absence of any contrary material brought on record by the AO by conducting an enquiry, the source explained by the assessee cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource to the extent of said amount were needed. Therefore, we find that since the assessee has already explained the source of amount of turnover declared by the assessee, salary income and loans from the relatives, then the action of the AO by taking the entire bank amount as turnover of the assessee is contrary to the facts. Accordingly, in the facts and circumstances of the case when the assessee has discharged his onus of explaining the source of deposit in the bank account and the AO has failed to conduct any further enquiry or bring any contrary material on record to disprove the explanation and evidence produced by the assessee, the addition made by the AO is not sustainable. Accordingly, the said addition made by the AO on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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