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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER
PER R.S.SYAL, VP :
This appeal by the assessee is directed against the order passed by the CIT(A)-5, Pune on 21-12-2017 in relation to the assessment year 2013-14.
The only issue raised in this appeal is against the confirmation of addition of Rs.30,00,525/- u/s. 68 of the Income-tax Act, 1961 (hereinafter also called as ‘the Act’). In the alternate, the assessee has prayed that the addition be restricted to 8% profit as per section 44AD of the Income-tax Act, 1961 (hereinafter also called `the Act’).
2 ITA No.515/PUN/2018 Arun P. Raina
Briefly stated, the facts of the case are, that the assessee
is an individual who filed his return declaring total income of
Rs.1,88,119/-. During the course of assessment proceedings, it
was observed that the assessee deposited cash in his bank
account on several dates. On being called upon to furnish the
source of deposits, the assessee submitted that he was in the
business of ‘coco-pani’ under the banner of M/s. Alekha
Hospitality Venture and these were the receipts from such
business which were deposited in the bank account. He
furnished copies of certain e-mails sent by the assessee to
various software and other companies showing the carrying on
of business of coco-pani and also submitted the brochure of
coco-pani vehicles etc. The AO required the assessee to
substantiate the purchases of coconut from market and supply
of the same to various outlets. The assessee submitted that he
had closed down his business and did not have any
sale/purchase bills. The AO opined that the assessee did not
prove the genuineness of purchases/sales of coco-pani. He,
therefore, held that the assessee did not successfully explain
the source of deposit of Rs.30.00 lakhs and odd in his HDFC
bank account. Invoking the provisions of section 68 of the
3 ITA No.515/PUN/2018 Arun P. Raina
Act, he made an addition of Rs.30,00,525/-, which came to be
approved in the first appeal.
After considering the rival submissions and perusing the
relevant material on record, it is observed that the AO initiated
the process by examining the amount of cash deposits by the
assessee in his HDFC account. The assessee submitted that he
was carrying on the business of coco-pani and receipts from
such business were deposited in this bank account, for which
no detailed particulars were maintained/furnished. The AO
refused to accept the factum of the assessee carrying on this
business. I have gone through the copy of bank account of the
assessee in which deposits were made. There are several
entries with varying amounts spread over throughout the year
which totalled up to Rs.30,00,525/-. The amounts vary from
as low as Rs.1,980/- and as high as Rs.58,000/-. Along with
such deposits, there are several withdrawals as well. The
assessee submitted an explanation that he was carrying on the
business of coco-pani, which the authorities have refused to
accept. Page 22 of the paper book is a copy of licence dated
15-06-2012 granted by Mumbai Shops and Establishment Act,
1948 to the assessee for carrying on `Coconut Retail Trade’.
4 ITA No.515/PUN/2018 Arun P. Raina
Page 52 of the paper book is a copy of registration of
Trademark by the assessee for carrying on the business of
`coco-pani’. Such registration was granted in 2012. Page 23
of the paper book is a copy of `Letter of intent’ dated 28-06-
2012 issued by Quadron Business Park Limited to the assessee
for setting up Food and Beverages Kiosk with the brand ‘coco-
pani’. Page 64 of the paper book is a copy of e-mail between
the assessee and some officials of Infosys to whom the
assessee was supplying coco-pani. There is a reference to
certain transactions of coco-pani in it. In similar way, there
are certain other copies of e-mails between the assessee and
other companies to whose staff the assessee was regularly
selling coco-pani. During the course of remand proceedings,
the assessee produced one Mr. Rashid Ajiz Bagwan who
supplied coconut to the assessee. The AO during the remand
proceedings recorded the statement of
Mr. Rashid Ajiz Bagwan and also mentioned this fact in his
report dated 27-09-2017, whose copy is available at page 84 of
the paper book. In his remand report, the AO has
acknowledged that Mr. Rashid Ajiz Bagwan admitted to have
supplied the coconut to the assessee. The view point was not
5 ITA No.515/PUN/2018 Arun P. Raina
accepted because no supporting documentary evidence was
placed on record. Varying nature of bank deposits throughout
the year indicate that the assessee was depositing cash receipts
in the bank account at regular intervals and simultaneously
there are certain debits also at the same frequency from the
same bank account. Thus, it becomes patent beyond an iota of
doubt that the assessee was, in fact, carrying on the business of
coco-pani during the year relevant to the assessment year
under consideration and the deposits in the bank account were
generated from the said business only.
Admittedly, the assessee did not maintain regular books of
account of such a business. In view of the fact that the
assessee did not disclose income from such business of coco-
pani in his return, such income is definitely required to be
computed. In my considered opinion and taking into
consideration all the relevant facts and circumstances of the
case, I am of the considered opinion that it would be in the
fitness of things if 8% of gross receipts of Rs.30,00,525/- is
held to be an amount of income includable in the total income
of the assessee. The ld. AR did not object to the inclusion of
the income @ 8% from such business which is assessee’s
6 ITA No.515/PUN/2018 Arun P. Raina
contention also raised through ground no. 4 of the appeal
before the Tribunal. I, therefore, direct to delete the addition
of Rs.30,00,525/- made u/s. 68 of the Act and to make an
addition @ 8% of gross receipts at Rs.2,40,042/-.
In the result, the appeal is partly allowed.
Order pronounced in the Open Court on 11th December, 2018.
Sd/- (R.S.SYAL) उपा�य� उपा�य�/ VICE PRESIDENT उपा�य� उपा�य�
पुणे Pune; �दनांक Dated : 11th December, 2018 सतीश आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. 2. ��यथ� / The Respondent; आयकर आयु�(अपील) / 3. The CIT (Appeals)-5, Pune आयकर आयु� / The Pr. CIT-4, Pune 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. // True copy // 6.
आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA No.515/PUN/2018 Arun P. Raina
Date 1. Draft dictated on 10-12-18 Sr.PS 2. Draft placed before author 11-12-18 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.
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