TMI Blog2023 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... emanated from the sale proceeds, which is already included in the total turnover disclosed by the assessee and the revenue accepted that as a revenue receipt, once again invoking the provisions of section 68 of the Act towards the said cash deposit into bank account would result in double taxation, which cannot be permitted. Accordingly, the addition is deleted. This view of ours is supported by case of Anantpur Kalpana [ 2021 (12) TMI 599 - ITAT BANGALORE ] On this count also, addition cannot be sustained. Accordingly, we allow the grounds taken by the assessee. - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER For the Appellant : Shri Shivaprasada Reddy, ITP For the Respondent : Shri Nischal B, Addl. CIT (DR) ORDER PER MADHUMITA ROY, JUDICIAL MEMBER The instant appeal filed by the assessee is directed against the order dated 22/02/2023 passed by the National Faceless Appeal Centre vide DIN and Order No. ITBA/NFAC/S/250/2022- 23/1050014504(1) arising out of the order dated 12/12/2008 passed by the ld.AO u/s 143(3) of the Income-tax Act 1961 (the Act) for the assessment year 2017-18. 2. The assessee, an individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axed and in that view of the matter taxing on the sales i.e. bank deposits against an unexplained cash credits under section 69 of the Act is not sustainable in the eye of law and liable to be deleted as the same suffers from double taxation. Further, the settled principle of law that the bank account is not books of accounts and the deposits in the bank account cannot be added under section 68 of the Act. On this aspect, the ld.Counsel appearing for the assessee submitted that the judgement passed by Cochin Bench in the case of Shri Thomas Eapen in ITA No.451/COCH/2019 for the Asst. Year 2015-16, a copy has also been handed over to us. 6. On the other hand, the ld. Representative of the Department relied upon the order passed by the authorities below. 7. The crux of the matter is that the ld.AO in assessee s case has applied section 44AD of the Act and estimated profit at 8% of the turnover and in that view of the matter no further addition under section 68/69A of the Act is permissible. Furthermore, the admitted fact is that the subject cash deposits are sale proceeds of pharmaceuticals and medicines declared in the VAT returns filed. The income embedded in the subject cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it is not an unreasonable inference to draw that it is a receipt from business . In view of the above, the Ld. AR prayed that the addition of Rs. 27,94,306/- made in respect of total income should be deleted. 8. The Ld. DR submitted that there is no prohibition for making addition u/s. 68 or 69A of the I.T. Act, though the assessee offered income u/s. 44AD of the I.T. Act. 9. We have heard the rival submissions ad perused the record. The assessee offered income u/s. 44AD, the assessee being a small trader in medicine. There is no dispute that the assessee falls under the provision of sec. 44AD since the turnover of the assessee is less than Rs. 1 crore from eligible business. The Assessing Officer also accepted that the assessee s case falls under the purview of section 44AD and computed the income declared by the assessee at Rs. 3,37,160/- and thereafter made addition towards undisclosed profit u/s. 68 of the Act. In other words, the Assessing Officer has not at all rejected the books of accounts of the assessee. Section 44AD provides that where the assessee is engaged in eligible business as proprietor under that section, a sum equal to 8% of the gross receipts sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cash deposit in the bank unless such entry had no nexus with the gross receipts. The stand of the assessee before the Commissioner of Income-tax (Appeals) and the Tribunal that the said amount of Rs. 14,95,300 was on account of business receipts had been accepted. The Ld. AR with reference to any material on record, could not show that the cash deposits amounting to Rs. 14,95,300 were unexplained or undisclosed income of the assessee. 9. In view of the above position, we are unable to hold that any substantial question of law arises in this appeal. 10. The appeal is dismissed. 9.2 The Chandigarh Bench of the Tribunal in the case of Nand Lal Popli vs. DC1T in ITA Nos. 1161 1162/Chd/2013, order dt. 14/06/2016, held as follows:- 9. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. The issue to be decided by us is whether accepting the case of the assessee as taxable under the presumptive taxation as provided under section 44AD of the Act, the Assessing Officer can make addition under section 69C of the Act making the cash flow statement provided b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have earned income @ 8% or above of the gross receipts. In that case, the provisions of sub-section (5) of the said section will be applicable to it, which reads as under: 44AD (5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in subsection (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB. 13. From the combined reading of sub-section (1) and sub-section (5), it is apparent that the obligation to maintain the books of account and get them audited is only on the assessee who opts to claim the income being less than 8% of the gross receipts. 9.3 . Now, applying the above to the facts of the present case, we observe that the Assessing Officer, for making the impugned addition has stated that there was total deposit of Rs. 94,04,685/- and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'any financial year an assessee has incurred any expenditure. But can we say on the facts and circumstances of the present case that the assessee has incurred any expenses. From an analysis of section 44AD of the Act contained hereinabove, we have already held that the assessee had not incurred the expenses to the extent of 92% of the gross receipts. Therefore, in the present case, the provisions of section 69A of the Act cannot be applied. Asking the assessee to prove to the satisfaction of the Assessing Officer, the expenditure to the extent of 92% of gross receipts, would also defeat the purpose of presumptive taxation as provided under section 44AD of the Act or other such provision. Since the scheme of presumptive taxation has been formed in order to avoid the long drawn process of assessment in cases of small traders or in cases of those businesses where the incomes are almost of static quantum of all the businesses, the Assessing Officer could have made the addition under section 69A of the Act, once he had carved out the case out of the glitches of the provisions of section 44AD of the Act. No such exercise has been done by the Assessing Officer in this case. 9.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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