TMI Blog2021 (5) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... tement filed by the Assessee - CIT deleted the addition - HELD THAT:- Commissioner has held to the effects that at the time of survey of the business premises of the Assessee, no unaccounted investment or expenses were found and the Assessee submitted cash flow statement and also furnished all the details and receipts for the year under consideration and even otherwise, no specific defect was pointed out by the AO. The AO assumed that the amount drawn in small amounts cannot be considered as available for redeposit, however, no such cogent material to substantiate the same. Commissioner also observed that on a careful perusal of the cash flow statement, he found that the Assessee had cash balance in hand for every deposit made. Further, the other payments shown in the cash flow statement are also found to be from the cash balance available to the Assessee. Revenue Department failed to contradict the finding of the ld. Commissioner for the issue in hand, hence the same does not require any interference. Consequently, the ground No.3 stands dismissed. Addition of unsubstantiated gifts - CIT-A deleted the addition - HELD THAT:- As clear from the record that both the donors fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stands dismissed. Revenue appeal dismissed. - I.T.A. No. 449/VIZ/2019, C.O.No. 154/VIZ/2019 (Arising out I.T.A. No. 449/VIZ/2019) - - - Dated:- 13-5-2021 - Shri N.K. Choudhry, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon'ble Accountant Member For the Assessee : Shri G.V.N. Hari, Advocate. For the Department : Shri N. Gopi Krishan, Sr. DR ORDER PER N.K. CHOUDHRY, JUDICIAL MEMBER The instant appeal has been preferred by the Revenue Department, whereas the cross objection by the Assessee against the order dated 15/03/2019 impugned herein passed by the ld. Commissioner of Income Tax (Appeals)-1 [for short, ld. Commissioner ], Visakhapatnam u/sec. 250(6) of the Income Tax Act, 1961 (hereinafter referred to as Act ) for the A.Y. 2012-13. 2. At the outset we observe that there is delay of 33 days in filing the appeal. The Revenue Department has filed an application for condonation of delay and narrated the facts that the Pr.CIT-1, Visakhapatnam is holding additional charge of Pr.CIT -2, Visakhapatnam and Pr.CIT, Rajahmundry. Further, due to his daughter s marriage held in the month of May, 2019 there was little delay in issuing authoriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of the alleged gift in the case of Snit. Alia Begum, she had no source to make gift ₹ 10,00,000/- and except the alleged gift transaction, the assessee's balances in her bank account are running in thousands of rupees only. 5. Tile ld.CIT(A) is not justified in deleting the addition of ₹ 48.0,217/- made towards unsubstantiated expenditure on the ground that the assessee admitted his income u/s.44AD of the Act, ignoring and not appreciating that these provisions are not applicable to assessee's case as the gross receipts of the assessee being ₹ 1,00,44,218/ - which exceeded the threshold limit of Rs. Sixty Lakhs. 6. The appellant craves leave to add or amend or alter or substitute any ground at the time of hearing of the appeal. 7. For these and other grounds that may be urged at the time of appeal hearing, the appellant prays that the addition made by the Assessing Officer oil tile aforesaid issues be restored. 5.2. We will decide the appeal under consideration, grounds-wise. 6. Ground Nos. 1, 6 7 are formal in nature, hence, needs no separate adjudication. 7. Ground No.2 relates to the addition of ₹ 46,60,000/- mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Hon'ble ITAT, Visakhapatnam Bench. Further, the appellant submitted that his only business is that of Interior Decors and he has no other source. I have carefully perused the assessment order, submissions of the appellant and the order of ITAT, Visakhapatnam. The issue before the ITAT, Visakhapatnam for A.Y.2011-12 was the addition towards unexplained deposits in the very same bank account of the appellant with HDFC, Bellary. The Hon'ble ITAT held as under in their order dt.20.09.2017 in ITA No.399/Viz/2015: We have gone through the bank account which was filed along with paper book. In the bank account, the amounts were deposited in Bellary and subsequently withdrawn. The operation in the account appears that the transactions are related to the business but not the investments. Therefore, we are of the opinion that the deposits made in the bank account are related to the business of the assessee and only the profit should be taxed in the hands of the assessee. However, the bank account is an undisclosed asset outstanding at the end of the year should be taxed as undisclosed asset after giving due credit or opening balance if any. Accordingly, we dire the A.O. t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the A.Y. 2011-12 and considering the peculiar facts and circumstances. Neither any material is available on record nor brought to our notice by the Revenue Department to controvert the finding of the ld. Commissioner, consequently, ground No.2 stands dismissed. 8. Ground No.3 relates to the deletion of addition of ₹ 49,84,800/- on the basis of mere cash flow statement filed by the Assessee. Before the AO it was submitted by the Assessee that the said deposits are work receipts and also cash withdrawals, rental income at ₹ 2,40,000/- and agricultural income at ₹ 15,000/-. Further, it was also claimed by the Assessee that the cash deposits and withdrawals are accounted , however, the AO did not accept the claim of the Assessee and made the addition by observing as under: That the Assessee did not produce any verifiable new evidence to substantiate the cash deposits in the bank account. a) Merely making entries in the books of accounts, without source documents and actual evidences does not mean that they can be, per se, acceptable. b) Survey, has been conducted, findings confronted with the Assessee and the Assessee was given ample opportunitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement and also furnished all the details and receipts for the year under consideration and even otherwise, no specific defect was pointed out by the AO. The AO assumed that the amount drawn in small amounts cannot be considered as available for redeposit, however, no such cogent material to substantiate the same. The ld. Commissioner also observed that on a careful perusal of the cash flow statement, he found that the Assessee had cash balance in hand for every deposit made. Further, the other payments shown in the cash flow statement are also found to be from the cash balance available to the Assessee. We may observe that Revenue Department failed to contradict the finding of the ld. Commissioner for the issue in hand, hence the same does not require any interference. Consequently, the ground No.3 stands dismissed. 9. Coming to the next ground No.4 which relates to the deletion of addition of ₹ 20,00,000/- representing unsubstantiated gifts. This is clear from the record that both the donors from whom the Assessee has taken the loan are close relatives and money has been routed through banking channel and both the donors have disclosed the transactions in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not automatically mean that the department has agreed for presumptive taxation. e) As the income is not established as business income at all, the provisions of sec. 44AD are not applicable. Hence, the expenditure claimed at ₹ 48,20,217/-, which is not genuine, is hereby disallowed and added back to total income. 10.1 The said addition also came into consideration before the ld. Commissioner who directed the AO to delete the same, by holding as under:- 6.5) Ground No.8 9: Assessment of business of income: The assessing officer examined the profit and loss account of the appellant and disallowed expenditure to the extent of ₹ 48,20,217. The assessing officer observed that the appellant failed to establish that the source of income is business income and therefore declined to compute the income u/s 44AD of the Act. I have carefully perused the profit and loss account, assessment order and the submissions of the appellant. On a perusal of the computation and the profit and loss account, it is noticed that the appellant admitted income from business of interior decors @8% of the turnover. As the appellant has opted for the provisions of S.44 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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