SHRI VIRENDER KUMAR,ALWAR vs. INCOME TAX OFFICER, WARD-1-1, ALWAR

Briefly stated, the facts of the case are that the assessee is proprietor of Mohan Dairy, Tijara, Alwar and is in diary business. As per ITS details available with the Department, it was found that the assessee had made cash deposit of Rs. 4,00,000/- during the F.Y 2010-11 relevant

During the course of hearing, the ld. AR submitted that source of cash and other deposits in the bank account is out of assessee’s dairy business and the Assessing Officer has not brought on record any source of income other than the daily business which was carried on by the assessee. It was submitted that once the return of income disclosing gross receipts of Rs. 14,56,230/- from dairy business has been accepted as per provisions of section 44AD of the Act, no separate addition can be made on the basis of bank deposits especially where the credits made in the bank account is less than gross receipts declared in the return of income. In support, the reliance was placed on the decision of the Hon’ble Punjab and Haryana High Court in case of CIT v. Surinder Pal Anand (in of 2010 dated 29th June, 2010) and the decision of the Co- ordinate Benches in case of Nand Lal Popli v. DCIT (ITA No. 1161,

Per contra, the ld. DR submitted that it is not disputed that the assessee has declared gross receipts of Rs. 14,56,230/- from his dairy business and return of income has been filed u/s 44AD of the Act. However, during the course of assessment proceedings, the assessee was required to file documentary evidence to substantiate his claim regarding diary business and in absence of any such evidence furnished before the Assessing Officer, it was not possible to verify that the receipt so declared amounting to Rs. 14,56,230/- is from the business of dairy. The ld. DR further submitted that the amount of cash and other credits in the bank account remain unverified as the assessee has not filed any reply regarding the source of such deposits and the additions were accordingly made by the AO which were rightly confirmed by the ld CIT(A). She thus relied on the finding of the lower authorities.

We have heard the rival contentions and purused the material available on record. It is noted that the assessee is in the diary business in the name and style of M/s Mohan Diary, Tijara and in pursuant to notice u/s 148, he has filed his return of income u/s 44AD declaring gross receipts from his diary business amounting to Rs 14,56,230/-. The return so filed u/s 44AD has been accepted by the Assessing officer which in effect means the declarations and disclosure so made by the assessee in terms of carrying on diary business, non-maintenance of books of accounts and gross receipts from such business amounting to Rs 14,56,230/- has since been accepted by the Assessing officer. In such a scenario, where there are cash and other credits in the bank account maintained by the assessee amounting to Rs 11,38,000/- which are less

We therefore find force in the contention so advanced by the ld AR that the source of cash and other deposits in the bank account is out of assessee’s dairy business and gross receipts thereof have already been offered in the return of income. In light of the aforesaid discussion, the addition so made by the Assessing officer is hereby directed to be deleted.

In view of our decision on merits of the addition made by the Assessing Officer, the other legal grounds raised by the assessee have become infructuous and hence the same have not been adjudicated upon.