SHRI HARI PRASAD PANDIT,BHILWARA. vs. ITO, WARD-3, BHILWARA

ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals), Ajmer [in brevity the ‘CIT (A)’], order passed u/s 250(6) of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2014-15. The impugned order was emanated from the order of the ld. ITO, Ward – 3, Bhilwara [in brevity ‘the AO’] order passed u/s 143(3) of the Act.

3. The brief facts of the case is that assessee is proprietor of M/s Gayatri Communication and M/s Gayatri Trading in which he dealt as an agent of Mobile Handset,sale of Sim Card and Mobile Recharge. The scrutiny was initiated by the ld. AO. The assessee was assessed for depositing cash in bank accounts and accordingly the ld. AO had taken the peak credit amount of Rs.8,00,000/- as unexplained income and calculated net profit on the total deposits in ICICI Bank, Bhilwara amount of Rs. 96,96,339/- on which the net profit was calculated @8% which works out to Rs.5,56,327/-. Both the amounts were added back with the total income of the assessee. Aggrieved assessee filed appeal before the CIT(A). After considering the submissions of the assessee, the Ld. CIT(A) had reduced the peak credit amount to Rs.3,00,014/- by allowing opening balance in bank amount of Rs.5,18,289/- and recalculated the net profit amount to Rs.2,65,437/-. The assessee made the grievance that assessee deposited the cash from sale of Sim card and declared the net profit @8% on sale of Mobiles amount of Rs.3,68,786/- which was works out amount to Rs.29,503/- and on the sale of recharge coupon, the assessee earned fixed commission amount to Rs.1,89,877/-. Accordingly, the total amount of Rs.2,19,380/- declared in the return of income u/s. 139(1). But the assessee’s submission was never be considered. Being dis-satisfied on the appeal order, the assessee filed an appeal before us.

Name of Bank Purchases of Mobile Purchases of Recharge Coupon Sale of Mobile phones 3,68,786.00 29,503.00 (Profit being declared at 8% of sales u/sec. 44AD) Sale of recharge coupons 93,27,553.00 1,89,877 (net and others commission being declared on recharge business by assessee) Total 96,96,339.00 2,19,380.00 6.1. In this respect, the assessee has submitted copies of computation and balance sheet from APB page no. 1 to 4. The copies of distributor agreement and billing systemAPB page no. 8 to 29, Analysis of ICICI Bank deposits APB page nos. 30 to 35, copy of cash book APB page nos. 36 to 45. The assessee has also submitted the copy of account of M/s. Pragati Telecome and M/s HexacomAPB page nos. 58 to 77. The entire cash deposited in the bank was transferred to these two parties from whom the assessee purchased mobile phone and the re-charged coupons and others. The assessee only sold mobile phone amount to Rs.3,68,786/- and the entire amount was deposited in ICICI Bank bearing account no. 0334 in the name of M/s Gayatri Communication. Accordingly, the assessee offered net profit @8% on sale amount of Rs.3,68,786/- which works out to Rs.29,503/-, which was offered to Tax in the returned income. As per the assessee, there is no undeclared bank account in his return of income and amount was duly declared and the tax was offered during filing of return u/s. 139(1), copy of return for assessment year 2014-15,APB page no.6. The ld. DR had not placed any contrary fact against the submissions of the assessee. We find that assessee declared the bank and cash in the return of income and the tax was offered tothe income earned by the assessee during the impugned assessment year. Accordingly, we set aside the appeal order and all the addition are duly quashed. In the result all the grounds of assessee is allowed.