TMI Blog2022 (9) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... restricted the addition on ad hoc basis, therefore, the penalty levied on entire credit entry addition would not survive. Further, it is settled position of law that no penalty is leviable on the addition made on ad hoc basis, therefore, we direct the Assessing Officer to delete the entire addition. - ITA No. 67 & 68/Srt/2019 - - - Dated:- 27-7-2022 - SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER For the Appellant : Shri P M Jagasheth, AR For the Respondent : Shri Abhishek Gautam, Sr. DR Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the assessee are directed against the separate orders of learned Commissioner of Income Tax (Appeals)-3, Surat [in short, the ld. CIT(A)] dated 03/12/2018 and 04/12/2018, one of the appeal is with regard to quantum addition and another one is against the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 (in short the Act) for the Assessment year (AY) 2008-09. 2. Facts in both the appeals are common, therefore, both the appeals are clubbed and heard together and for the sake of convenience, a common order is being pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had deposited cash of Rs. 19,97,000/- in his bank account maintained with Varachha Co-Operative Bank, Surat. On further investigation, it was revealed that the assessee has not filed return of his income for the A.Y. 2008-09. Accordingly, the case of assessee was reopened as the income of this assessment year has escaped assessment to the extent of deposit in the bank account. Notice under Section 148 of the Act dated 30/03/2015 was served upon the assessee. The Assessing Officer recorded that despite serving of number of notices as recorded in para 4 and 5 of assessment order, the assessee has not furnished any detail nor filed return of income. Accordingly, the Assessing Officer completed the assessment under Section 144 of the Act on the basis of information available with him and gathered from the Varachha Co-Operative Bank, Surat. On perusal of details with the assessing officer, he noted that there was credit entry of Rs. 27,98,735/- in bank account No. 100010066460. The Assessing Officer has made addition of Rs. 27,98,735/- in assessment order dated 15/02/2016 passed under Section 144 r.w.s. 147 of the Act. 4. Aggrieved by the order of assessment, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer made addition for want of compliance. In absence of any detail, the Assessing Officer added Rs. 27,98,735/- in his savings bank account as no return of income was filed. The ld. CIT(A) noted that on perusal of deposits and withdrawal during the appellate proceedings, the assessee was asked to produce he evidence about his business of Sarees and dress material and the evidence like registration with various agencies like VAT registration under Shop and Establishment Act or confirmation from seller and purchaser. The assessee could not produce any evidence. The assessee is filing return from the A.Y. 2011-12. The Assessing Officer noted that no books of account or vouchers and bills were maintained by the assesse regarding the retail business. The ld. CIT(A) accordingly upheld the order of Assessing officer by referring that Rules and Regulations of Reserve Bank of India about savings bank account that savings bank account should be used only for non-business or for non-commercial transaction. Further aggrieved, the assessee has filed the present appeal before this Tribunal. 6. We have heard the submissions of ld. authorised representative (AR) of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee has relied on the following decisions: Smt. Krushangi Keyur Bhagat Vs ITO, Ward 3(3), Surat ITA No. 1434/Ahd/2013 (ITAT, Surat), Shri Mukesh Gamanlal Patel Vs ITO, Ward 6(3), Surat ITA No. 1636/Ahd/2013 (ITAT Surat), Shashikant Tansukhlal Mandlesara Vs ITO, Ward 5(4), Surat ITA No. 571 572/Ahd/2015 (ITAT, Surat), Pravinchandra Ishwarlal Rana vs. ITO, Ward 2(3), Surat ITA No. 133/Ahd/2016 (ITAT, Surat), Pr.CIT-3 Vs Shri Indrajeet Zandusing Tomar Tax appeal No. 908 of 2015 (Gujarat HC), Semadri Bhagvan Pradhan Vs ITO, Ward 9(4), Surat ITA No. 3133/Ahd/2014 and 307/Ahd/2015 (ITAT, Surat), Shri Arvindbhai D. Bhandari Vs ITO, Ward 2(3), Surat ITA No. 1577/Ahd/2013 and ITA No. 2454/Ahd/2015 (ITAT, Surat). 9. On the other hand, the ld. Sr. DR for the revenue has vehemently supported the orders of the authorities below. The ld. Sr. DR for the revenue submits that despite granting number of opportunities, before the assessing officer, the assessee failed to respond various notices and to produce any evidence to substantiate the cash credit. Before ld. CIT(A), the assessee claimed that he was engaged in small business of sarees and dress material, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he books, ongoing through such statement and frequent transactions in cash as well as cheque, the entire deposit in the bank account cannot be considered for addition. It was further held that such frequent deposit and withdrawal shows that there is every likely that account had been used for unrecorded business transaction and thereby restricted the addition to the extent of 5%. 13. Further in Shahshikant Tansukhlal Mandlesara Vs ITO (supra), on similar addition, cash credit in the bank account, addition was restricted to 10%. In Pravinchandra Ishwarlal Rana Vs ITO (supra), similar unexplained cash deposit in savings bank account was restricted to 10% of the turnover. 14. Considering the aforesaid factual and legal discussion and on perusal of details in the bank account, we find that there are frequent debit and credit entries by way of cheque as well as cash, thus the entire credit entry cannot be considered as income of assessee. Considering the various decisions of Tribunal including the Hon ble Jurisdictional High Court either peak credit or presumption income from unaccounted business can be added. Considering the overall facts and circumstances of the case, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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