Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCHES “SMC”: DELHI
Before: SHRI BHAVNESH SAINI
This appeal by assessee has been directed against the order of Ld. CIT(Appeals)-Ghaziabad dated 28.09.2018 for AY 2010-11, challenging the addition of Rs. 20,08,131/-.
Briefly the facts as noted in the impugned order are that assessee challenged the assessment order dated 10.10.2017 u/s 147/144 of the I.T. Act. It is noted that assessee made
2 ITA.No.7204/Del./2018 cash deposits of Rs. 37,74,110/- in his bank account during assessment year under appeal. The assessee did not explain source of the cash deposits before AO. Therefore, entire amount was added to his income. The assessee submitted before Ld. CIT(A) that he reside in a remote village namely Amirpur Badiala, Modinagar, Ghaziabad, where he is engaged as a small dealer dealing in waste items like agriculture waste, scrap or whatsoever was available for sale. The assessee visited to various locations to procure these waste items and try to sell the items at nearby areas so that transportation cost may be avoided. The profit margin is very low. Apart from it assessee is having an inheritance agricultural land. It was submitted that AO considered the entire cash deposits in the bank account but did not consider cash withdrawals for the same period was of Rs. 45,45,480/-. The AO completed the assessment for AY 2008-09 taking the deposits at turnover and assessed the profit u/s 44AF @ 5% of the turnover u/s 143(3)/147 of the Act. This can be added to the income of the assessee. The assessee relied upon several decisions also. The 3 ITA.No.7204/Del./2018 Ld. CIT(A) called for the remand report from AO in which the AO has stated that as per computation of income assessee has computed income from business and profession u/s 44AF of the Act at Rs. 1,12,945/- on sales/turnover of Rs. 22,58,900/- , whereas there are cash deposits in the bank account of Rs. 37,74,110/-. Therefore, total bank deposits at Rs. 37,74,110/- should be considered as sales on which income may be computed u/s 44AF at Rs. 1,88,710/-. The Ld. CIT(A), however, did not accept the contention of assessee as well as of the AO and made the addition of the peak credit in a sum of Rs. 20,08,131/-.
After considering the rival submissions, I am of the view that matter requires reconsideration at the level of the Ld. CIT(A). Ld. Counsel for assessee submitted that AO in the remand report has specifically agreed that profit may be computed as per section 44AF of the Act. He has, therefore, submitted that matter may be remanded back to the Ld. CIT(A) with a direction to re-decide the matter accordingly. I
4 ITA.No.7204/Del./2018 may also note that in AY 2008-09 the AO passed the assessment order u/s 143(3)/147 of the Act dated 08/01/2014 which is prior to passing the assessment order for assessment year under appeal. The AO in this year considered the bank deposits as total sales and accepted the version of the assessee for dealing in sale of waste material.
The AO on the same line in the remand report requested the Ld. CIT(A) to consider the entire cash deposits of Rs. 37,74,110/- as sales of assessee and requested to compute the deemed income u/s 44AF of the Act. In this view of the matter, there was no justification for the Ld. CIT(A) to make addition on account of peak credit. I, accordingly, set aside the order of Ld. CIT(A) and restore the appeal of assessee to his file with direction to re-decide the appeal of the assessee as
per history of the assessee considered by AO in earlier year as well as in the remand report filed before Ld. CIT(A). Ld. CIT(A) shall give reasonable, sufficient opportunity of being heard to the assessee.
5 ITA.No.7204/Del./2018
In the result, the appeal of assessee is allowed for statistical purposes.
Order pronounced in the open Court.