KANDASAMY RASU,NAMAKKAL vs. ITO, WARD-2,, NAMAKKAL

The effective ground of appeal in this appeal of assessee is against in confirming addition of credit of Rs. 44,60,130/- in the bank account u/s. 69A of the Act.

1. 3. The assessee is an individual and engaged in the business of sale and purchase of eggs. The assessee has deposited cash of Rs.36,01,670/- in his saving bank account, but has not filed return of income. The A.O therefore, has reopened the assessment and made the addition of issued the total credit of Rs. 44,60,130/- including the cash deposits of Rs. 36,01,670/- u/s. 69A of the Act in the ex-parte order passed u/s. 144 r.w.s 147 of the Act. The assessee before the Ld. CIT(A) has submitted that he has engaged in the business of sale and purchase of eggs and the cash deposits were out of receipt from sundry debtors and cash withdrawn from his bank account. The assessee has also submitted a copy of bank statement in support of its contention. However, the Ld. CIT(A) did not accept the assessee’s explanation stating that there is only ATM cash withdrawal and the assessee has not submitted evidence in support of his claim that cash deposited were sourced from sundry debtor.

The Ld. Authorized Representative (A.R) of the assessee has argued that the Ld. CIT(A) has not accepted the source of cash deposit from the ATM withdrawal though the withdrawal were available with the assessee for deposit in the bank account. The Ld. AR has also submitted that the deposits were proceeds from sales and in any case the peak credits balance which could have been added was only Rs. 4,05,667/-.

The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities.

We have heard the rival submissions, and perused the materials available on record. The assessee is engaged in the business of sale and purchase of eggs and has explained the source of cash deposit, as ATM cash withdrawals and proceeds from sales. The Ld. CIT(A) has not accepted the explanation regarding ATM cash withdrawals, without providing any specific reasons. We note that the assessee is engaged in the trading of eggs and has not maintained any books of accounts. After considering the facts of the case, we are of the opinion that the assessee’s income should be estimated @ 12% of the deposit of Rs.44,60,130/-in the bank statement. Accordingly, the income is :- 4 -: confirmed to the extent of Rs.5,35,215/-. And balance addition is deleted. In view of the above, the appeal filed by the assessee is partly allowed.

In the result, the appeal filed by the assessee is partly allowed.