SHRI DULA RAM MEENA,JAIPUR vs. INCOME TAX OFFICER, WARD-6-1, JAIPUR

This appeal by the assessee is directed against the order dated 13.03.2018 of ld. CIT (A) for the assessment year 2014-15. The assessee has raised the following grounds :-

The assessee is an Individual and filed his return of income on 27.03.2015 declaring total income of Rs. 2,77,080/-. The assessee has declared the income from Job work from JCB & Tractor under the presumptive provisions of section 44AD of the IT Act. During the course of scrutiny assessment, the AO noted that the assessee has deposited cash in the bank account of Rs. 26,78,300/- which remains unexplained. The statement of the assessee was also recorded under section 131 of the Act in respect of the assessee’s explanation of source of cash deposit in the bank account. Since the assessee was not maintaining any record of the job charges income from hiring of JCB machine and Tractor total amounting to Rs. 26,78,300/-, therefore, the AO has treated the said amount of Rs. 26,78,300/- as income from undisclosed sources. The assessee challenged the action of the AO before the ld. CIT (A) but could not succeed.

Before us, the ld. A/R of the assessee has submitted that the assessee has declared the income from job charges from hiring of JCB machine and Tractor to the tune of Rs. 23,64,200/- and Rs. 3,14,100/- respectively total amounting to Rs. 26,78,300/-. Thus the assessee has explained the source of deposit as the job charges received by the assessee on which the assessee has declared the income under the provisions of section 44AD. The ld. A/R further submitted that apart from the job charges, the assessee was also having other source of income which is as under :-

We have considered the rival submissions as well as the relevant material on record. There is no dispute that the assessee has declared the income under the presumptive provisions of section 44AD in respect of job charges received by the assessee from hiring of JCB and Tractor. The AO has not disputed the fact that the assessee is having the JCB machine and Tractor and, therefore, the income from hiring of these machines cannot be ruled out. The assessee has declared the gross receipts from JCB and Tractor at Rs. 26,78,300/- which is the amount found deposited in the bank account of the assessee. During the course of assessment proceedings, the AO has examined the assessee and recorded his statement under section 131 of the IT Act wherein the assessee has accepted the fact that he is not keeping any document or issuing any bill to the parties/customers from whom job charges were received by the assessee. It is also correct to say that the number of transactions and receipts on account of job charges cannot be remembered by an Individual in the absence of any record containing the details of all transactions. The assessee though accepted the fact that he is maintaining the diary for the purposes of recording the receipts on account of job charges, however, he has not produced the alleged diary either before the authorities below or before us. Therefore it appears that the assessee has deliberately concealed the correct facts regarding the income from job charges. However, the entire deposit in the bank account cannot be treated as unexplained income of the assessee when the AO has not disturbed the income of the assessee from job charges. Hence the income declared by the assessee from job work on hiring of JCB and Tractor as well as other income being agricultural income etc. as claimed by the assessee is also required to be considered while treating the cash deposit made in the bank account as unexplained income of the assessee. Therefore, in the facts and circumstances of the case, we set aside this issue to the record of the AO to examine the availability of the source of cash deposit made in the bank account by considering all sources of income of the assessee including agricultural income, rental income and any receipt on sale of land, if any.

The AO has made the addition of Rs. 6,01,000/- by rejecting the explanation of the assessee that the said amount was received by the assessee from one Shri Lala Ram Meena to whom the assessee has sold his vehicle, namely, Scorpio for a consideration of Rs. 9,51,000/-. The AO declined to accept the said explanation on the ground that the notice issued to Shri Lala Ram Meena remained unserved. The ld. CIT (A) has confirmed the action of the AO.

Before us, the ld. A/R of the assessee, on the direction of the Bench produced all the documentary evidences regarding the ownership of the Scorpio by the assessee, repayment of the loan of HDFC Bank Ltd. which was availed by the assessee to finance the vehicle and subsequent sale document of the said vehicle in favour of Shri Lala Ram Meena for a total consideration of Rs. 9,51,000/- out of which the assessee received Rs. 6,01,000/- in cash during the year under consideration. The ld. A/R has also produced the copies of sale documents, certificate of the bank of repayment of loan and discharge of hypothecation on the vehicle as well as transfer of the said vehicle in the name of Shri Lal Ram Meena.

On the other hand, the ld. D/R has relied on the orders of the authorities below.

In the result, appeal of the assessee is partly allowed.