TMI Blog2021 (7) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as unexplained investment. Accordingly, in view of the fact that the income of the assessee was estimated by the A.O by applying G.P rate after rejection of books of accounts u/s 145(3) of the Act the addition made by the A.O on account unexplained/unaccounted purchases is not sustainable and the same is liable to be deleted. - Decided in favour of assessee. Reassessment proceedings - addition on account of unexplained deposits made in the bank account - HELD THAT:- As manifest from the details and explanation furnished by the assessee that the assessee has shown the deposits made in the bank account on various dates and also the corresponding payment through cheques and demand draft which were subsequently cancelled in some instance. It is pertinent to note that if the sale proceeds of the assessee are not deposits in any other bank account then the explanation of the assessee that the deposits made by the assessee in the bank account maintained with Bank of Baroda cannot be rejected without verifying these details. Accordingly, in the facts and circumstances of the case and in the interest of justice this issue is set aside to the record of A.O for proper verification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R with the assessee has submitted that once the Assessing Officer has rejected the books of accounts and estimated the income by applying G.P Rate no further addition could be made on account of unexplained purchases. He has further contended and that the A.O has made the addition on account of unexplained investment for purchase of ₹ 1,51,386/-. However, this fact is not in dispute that the payment for the said purchases has been made through bank account of one Ms. Sikha Jaisawal. He has further explained the reasons about the payment made through the bank account of Sikha Jaisawal due to serious illness of the daughter of the assessee who was admitted in AIIMS Delhi. Therefore, the assessee was out of station to attend her ailing daughter in AIIMS and during that period the shop of the assessee was being run by Sikha Jaisawal. He has further pointed out that in the ledger account of the supplier the payment is reflected through the HDFC bank account of Sikha Jaisawal which is not in dispute. This is not the only payment for purchases from the bank account of Sikha Jaisawal but all the payments from January 2012 onwards till the end of the February, 2012 were made through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s estimated by G.P rate no further addition can be made on account of expenditure which is part of the trading account. As far as the unexplained investment is concerned the source of payment is not in dispute as it is clearly made through bank account of one Sikha Jaisawal and the assessee has explained the reasons for such payment through bank account of Sikha Jaisawal. It is pertinent to note that it is not the isolated transaction of payment for purchases through bank account of Sikha Jaisawal but all the transactions from January, 2012 to February, 2012 were made from the bank account of Sikha Jaisawal. The A.O has accepted all other transactions of purchases and payment made through bank account of Sikha Jaisawal but pick up this transaction of ₹ 1,51,386/- due to the reasons that the same is not recorded in the books of accounts of the assessee. Once, the source of the payment of the purchases is not in dispute then the same cannot be treated as unexplained investment. Accordingly, in view of the fact that the income of the assessee was estimated by the A.O by applying G.P rate after rejection of books of accounts u/s 145(3) of the Act the addition made by the A.O on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise department. He has further, submitted that the deposits as well as the payments made by the assessee are part of the books of accounts and particularly shown in the balance sheet of the assessee. Therefore, the license fee paid by the assessee from this bank account to the excise department are duly reflected in the books of accounts. The assessee has furnished all these details before the CIT(A) which are reproduced in the impugned order at Page No. 4 5. However, this explanation and details furnished by the assessee were rejected by the CIT(A) while confirming the addition. Hence, the ld. A.R has submitted that the issue may be set aside to the record of A.O for verification of this fact of source of deposits from the sale proceeds and the payment made by the assessee towards the license fee to the excise department of the State Government and then decide the issue. On the other hand the ld. D.R has submitted that despite sufficient opportunity given by the A.O the assessee has failed to produce any explanation or supporting evidence to explain the source of deposits made in the bank account. Thus, the ld. D.R submitted that the assessee does not deserve any further oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 394901000000022 on made on 03/12/2011 or amounts credited on cancellation of drafts on 26/12/2011, the segregation is as under :- Source Amount Credit Cash Transfer Cancelled DD Cheque Other Total Credits Rajendra- 022 5000 1000 Cash 10000 10000 5500 Pawan Pandey 5500 11000 Pawan Pandey 11000 Cash 550000 550000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 154500 25000 41000 16500 1105000 That the copy of Bank Statement of A/C No. 39490100000022 of Rajendra Kumar Kesarwani form where Transfer has been made is enclosed as Annexure 6 and the copy of Bank Statements of A/c No 06980100007271 of the Appellant which is reflected in the Balance sheet from where Transfer has been is enclosed as Annexure 7. The Ld. Assessing Officer has wrongly arrived at ₹ 11, 05,000/- as Cash Deposits and has made the addition as unexplained Investment. That in view of above facts, submissions and law the additions made u/s 69 by the Ld. Assessing officer deserves to be deleted because the amounts deposited are Business Receipts which have been used for running the business and not Unexplained Investments u/s 69, it is prayed that the Appeal be allowed, additions be deleted and such other Orders as deemed fit be passed. It is manifest from the details and explanation furnished by the assessee that the assessee has shown the deposits made in the bank account on various dates and also the corresponding payment through cheques and demand draft which wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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