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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
PAN/GIR No. : AJFPK0293H Appellant .. Respondent Appellant by : Shri Dharn Gandhi.AR Respondent by : Shri RP Veena.DR Date of Hearing 25.08.2022 Date of Pronouncement 29.08.2022 आदेश / O R D E R
PER PAVAN KUMAR GADALE JM:
The assessee has filed the appeal against the order of the CIT(A)-National Faceless Appeal Centre (NFAC), Delhi passed u/s 144 r.w.s 147 and 250 of the Act. The assessee has raised the following grounds of appeal:
Sameer Moin Khan., Mumbai. - 2 -
1.On the facts and in the circumstances of the case and in law, NA the reassessment proceeding initiated in case of the Appellant vide notice u/s 148 of the Act dated 27.03.2018 is bad in law.
2. On the facts and in the circumstances of the case and in law, the impugned order u/s 250 of the Act dated 18.03.2021. passed by Ld. NFAC is bad in law
3.. On the facts and in the circumstances of the case and in law, Rs. the Ld. NFAC erred in upholding the addition of entire cash deposit of Rs. 33,26,199/- in the bank account of the Appellant.
On the facts and in the circumstances of the case and in law, the Ld. NFAC erred in upholding the addition without considering the submission and documentary evidence filed by the Appellant and without giving benefit of the cash withdrawal from the said bank account.
On the facts and in the circumstances of the case and in law, the Ld. NFAC erred in not taxing 8% of the total cash deposit of Rs. 33,26,199/- in the bank account of the Sameer Moin Khan., Mumbai. - 3 -
Appellant, though the Appellant proved beyond reasonable doubt that he was engaged in the business of trading in readymade garments.
6. The above grounds should be considered as independent and NA without prejudice to each other
7. The Appellant craves leave to add, amend, modify or delete any grounds of appeal.
The brief facts of the case are that the assessee is engaged in the business of trading in readymade cloths and hosiery items and the assessee has not filed the return of income for the A.Y 2011-12. The Assessing Officer (A.O) has received the information in ITS statement that during the F.Y 2010-11 the assessee has made cash deposits of Rs. 33,26,199/- in savings bank account. Therefore the A.O has reason to believe that income has escaped the assessment and after recording the reasons for reopening has issued notice u/s 148 of the Act and there was no compliance. Subsequently, the A.O. has issued notice u/s 133(6) of Sameer Moin Khan., Mumbai. - 4 - the Act on the assessee’s bank to provide the details and bank statement of the assessee. In the absence of explanation of source of cash deposits as per the bank statement, the A.O. has treated the deposits as unexplained cash credits u/s 68 of the Act and assessed the total income of Rs.33,26,199/- and passed the order u/s 144 r.w.s 147 of the Act dated 12.12.2018.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and the findings of the scrutiny assessment but was not satisfied with the explanations on the transactions were the assessee has made cash deposits and cash with drawls for purchase of the hosiery items/goods from the traders at Tirupur, Coimbatore and has confirmed the action of the A.O. and dismissed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Honble Tribunal.
4. At the time of hearing the Ld. AR of the assessee submitted that the CIT(A) erred in confirming the Sameer Moin Khan., Mumbai. - 5 - addition of the AO in treating the cash deposits as unexplained cash credits without considering the withdrawals. The Ld. AR emphasized that the assessee is a small trader and was involved in purchasing of the readymade /hosiery goods at various places and the cash withdrawals were made for purchase of goods. Further, The Ld.AR mentioned that the assessee has opted for the presumptive taxation under section 44AD of the Act in the subsequent asseseement years and same be applied . The Ld. AR has substantiated the submissions with the factual paper book with the bank account statement and the details of income tax returns filed for the earlier and subsequent assesseement years and prayed for allowing the appeal. Contra, the Ld. DR supported the order of the CIT(A).
5. We heard the rival submissions and perused the material on record. The sole grievance of the Ld.AR that the CIT(A) has erred in confirming the addition of cash deposits in the bank account overlooking the cash withdrawals of the asseessee and the A.O. has passed the order under 144 r.w.s 147 of the Act of the Act. The contentions of the Ld.AR that the assessee is a small trader dealing in readymade and hosiery items
Sameer Moin Khan., Mumbai. - 6 - and filing the return of income regularly under the presumptive taxation U/sec44AD of the Act. The Ld. AR demonstrated the bank statement at page 1 to13 of the paper book explaining that the assessee was depositing cash out of sales receipts and made cash withdrawals for purchase of goods at Tirupur and Coimbatore. The assessee purchases the goods and supply to the other places and the assessee has not maintained books of accounts except bank statements.
We find the submissions of the Ld. AR are supported with evidences and bank statements and prima-facie the assessee has filed the return of income for A.Y 2012-13, 2013-14 and 2014-15 opting for presumptive taxation/income @ 8% of Gross Turnover/Gross Receipts u/sec44AD of the Act which cannot be disputed and the Ld.AR has demonstrated the details at page 23 to 52 of the paper book. We considering the overall facts, circumstances, submissions and the assessee has opted for the provisions of Sec.44AD of the Act and the transactions are related to business activities of the assesse, direct the Assessing officer to treat the cash deposits as a business gross receipts/turnover and apply the provisions of Sec.
Sameer Moin Khan., Mumbai. - 7 - 44AD of the Act and determine the income @ 8%. Accordingly, we set-aside the order of the CIT(A) and allow the grounds of appeal in favour of the assessee.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 29.08.2022.