9911796707
TMI Blog2023 (2) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Assessment Year (A.Y.) 2007-08. 2. Brief facts of the case are that the assessee, an individual and proprietor of M/s Sarada Enterprises is carrying on the business of supplying grocery items to Central Prison and GVMC, sale of vegetables, dry fish etc. The assessee filed his return of income, admitting total income of Rs.1,48,610/- for the A.Y.2007-08 on 31.10.2007. Based on the information received, that the assessee has purchased a property along with his wife Smt.Patnayakuni Satyavathi, during the F.Y.2006-07 for Rs.24 lakhs, which was not reported by the assessee in the return of income, the Ld.AO considered it as income escaping assessment and reopened the assessment u/s 148 of the Act and a notice dated 14.03.2014 was served ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld.CIT(A), the assessee filed written submissions before the Ld.CIT(A), explaining the source of cash deposits and cash sales. The Ld.CIT(A) granted relief to the extent of Rs.6,50,000/- and treated the balance amount of Rs.21,98,025/- as unexplained source for cash deposits. Further, the Ld.CIT(A) also directed the AO to estimate the profit at 3.5% on the turnover. 4. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us and raised the following grounds : 1. That the learned Commissioner of Income-Tax (Appeals)-1 [for short CIT(a)-1] erred in dismissing the appellant's contention that initiation of proceedings under section 147 of the Income Tax Act, 1961 ("the Act") are bad in law and arbitrary. 1.1. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the grounds of appeal on or before the time of hearing. The Ld.AR argued that the assessee is a kirana dealer and the sales are made by receipt of cash. The Ld.AR further submitted that the assessee is engaged in the sale of vegetables, dry fish and grocery items and is regular in filing of his return of income. The Ld.AR further submitted that out of the cash receipts from the sales, the assessee has purchased immovable property during the impugned assessment year. The Ld.AR further submitted that these details are verified by the Ld.AO during the original assessment. The Ld.AR submitted that on being satisfied, the Ld.AO estimated the business profit at 5% which was disputed by the assessee before the Ld CIT(A). 5. Per contra, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.AO has not disputed the fact of cash deposits in the assessee's bank account. In the absence of any dispute regarding the cash deposits are arising out of the cash sales by the Ld.AO in the original assessment and in the absence of any contrary findings by the Ld.AO, cash deposits cannot be treated as unexplained. Further Smt. Satyavati, wife of the assessee is also a regular filer of income tax returns who has paid Rs 2,00,000/- to the assessee, as per findings of Ld.CIT(A). In view of the above discussions, considering peculiarity of the trade in which the assessee is engaged, we find that the assessee has source for the cash deposits made for the purpose of investment in residential property for Rs.24 lakhs. Additions cannot be made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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