ITO, NEW DELHI vs. SH. RAKESH BHATIA, NEW DELHI

The brief facts shows that assessee is an individual who filed his return of income on 31/10/2005 declaring income of INR 2 34248/–. The case of the assessee was selected for scrutiny Page | 1 under CASS based on the annual information return information that assessee has deposited INR 6351500/– in cash in bank account of the assessee. Notice under section 143 (2) was issued and served on the assessee on 10/8/2006. During the course of assessment proceedings the assessee did not comply with the many of the notices and therefore, the assessing officer passed order under section 144 of the income tax act, 1961.

The brief facts of the case shows that assessee has deposited cash of INR 9 125500/– with the syndicate bank. The learned assessing officer obtained the information under section 133 (6) from the syndicate bank also the learned assessing officer noted that assessee has shown business income from trading of electronic items and total turnover is only INR 1 7853924/– and the gross profit of the assessee is only INR 6 32779/–. Therefore, the order under section 144 of the income tax act was passed on 11/12/2007 determining the total taxable income of the assessee of INR 9359750/– against the returned income of INR 2 34250/–, wherein the income from undisclosed sources of the cash deposited in syndicate bank has been added of INR 9 125500/–. 5. Aggrieved with the order, the assessee preferred an appeal before the Commissioner of income tax (appeals) – 14, New Delhi. The learned Commissioner appeals vide order dated 29/1/2015 sustained the addition to the extent of INR 5 60, 000/–. Therefore the learned AO aggrieved with the order has preferred an appeal before us.

The learned departmental representative vehemently stated that assessee has deposited a sum of INR 91 lakhs in the bank account in cash and the learned Commissioner of income tax has confirmed the addition only to the extent of INR 560,000 deleting the balance addition merely on the basis of the cash flow statement submitted by the assessee.

Despite notice servd through the income tax officer, none appeared on behalf of the assessee and therefore the issue is decided on the merits of the case, based on the information available on record. 8. We have carefully considered the contentions of the learned departmental representative in the orders of the lower authorities. The brief facts admittedly shows that assessee has deposited 91,00,000 in the syndicate bank account of the assessee in cash. Before the learned Commissioner of income tax appeals, It was stated that assessee could not remain present before the learned assessing officer. However, on the basis of the bank statement appellant submitted that assessee is a proprietor of S.R.Electronics for which he has maintained the current account in syndicate bank. The appellant used to give cheques to the proprietary concern, which used to be discounted from the bank and the funds were utilised for the proprietary business. Those cheques were shown in its capital account of the proprietary concern and in turn, he used to get cash from the proprietary concern, which were re-deposited in his personal account. Assessee was adopting this practice because of the reason that appellant could take the benefit of 3 to 4 days when the cheques were presented for encashment.