SARIKA MALHOTRA,DELHI vs. ITO WARD-34(5), NEW DELHI

This appeal by the assessee is preferred against the order of the CIT(A)-12, New Delhi dated 18.06.2021 pertaining to A.Y. 2011-12.

The sum and substance of the grievance of the assessee is that the CIT(A) erred in confirming the addition of Rs.1057065/- made by the AO on account of deposit of cash in the savings bank account with Punjab National Bank.

Briefly stated that the facts of the case are that the AO was seized with the information of cash deposit of Rs.1057067/- in the Savings Bank account with Punjab National Bank. Since no return was found to be filed by the assessee, the AO issued notice u/s. 148 of the Act. requiring the assessee to furnish the return of income. Assessee filed her return of income under presumptive scheme of taxation u/s. 44AD of the Act. The AO allowed opportunities to the assessee to explain the source of cash deposit and on receiving no plausible reply the AO completed the assessment by making addition of Rs.1057065/-.

Assessee carried the matter before the CIT(A) and explained that the assessee is running small handloom and textile business from which the assessee made a total turnover of Rs.14,55,550/- during the year under consideration and has returned profit of 12% on the same which is much higher than the presumptive rate of tax u/s. 44 AD of the Act. It was explained that the cash deposit of Rs.1057065/- has come out of the total turnover of Rs.1455550/-. The CIT(A) confirmed the addition by stating that the assessee did not file any reply during the assessment proceedings.

I am of the considered view that the assessee should get one more opportunity to substantiate her claim that she is running handloom and textile business from which she had a turnover of Rs.14 lacs during the year under consideration which is the source of the cash deposit of Rs.10 lacs.

I, therefore, restore this issue to the files of the AO. The assessee is directed to furnish necessary evidences in support of her claim of business and the source of cash deposit there on.

The AO is directed to verify the same and decide the issue afresh after giving a reasonable and sufficient opportunity of being heard to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purpose.

Decision announced in the open court in the presence of both the representatives on 30.09.2021.