BHAVESH C JAIN,MUMBAI vs. ITO 14(1)(4), MUMBAI

In this appeal the assessee is aggrieved for the addition of `15,95,038/-.

Rival contentions have been heard and record perused. Briefly stated, the assessee filed return of income for A.Y. 2009-10 on 30.11.2009 declaring total income of `1,40,778/-. The return was processed under Section 143(1) of the Act. The case was selected for scrutiny under CASS and notices under Section 143(2) and 142(1) were issued and served on the assessee. The order under Section 143(3) was passed on 30.12.2011, making addition of cash deposits of `15,95,000/- under Section 69 of the Shri Bhavesh C. Jain Act and thereby determining the total income at `17,35,778/-. By the impugned order the CIT(A) confirmed the action of the AO, against which the assessee is in further appeal before us.

We have considered the rival contentions carefully and gone through the orders of the Authorities below and found from record that the assessee is carrying on business of discounting of cheques, wherein cash was accepted and after deducting his commission assessee was issuing cheques to the parties. Similarly, while making payments the assessee was accepting cheques and after deducting his commission used to pay the cash to the parties. During the course of assessment the AO did not agree with the assessee’s nature of business and therefore added the entire amount of cash deposit in assessee’s account. It was the contention of the learned A.R. that all the business transactions pertaining to the addition of `1,95,000/- are properly reflected in the books of account/cash book filed before the AO, therefore the addition is not warranted under Section 69 of the Act. He further submitted that the assessee has filed his return of income on 30th November, 2009 vide Machine No. 1414004087 showing details of all items of Profit & Loss Account, Balance Sheet and the Capital Account, etc. The assessee’s Profit & Loss Account is based on the transactions recorded in the books of accounts, copy of which has been filed before your goodself by way of Paper Book comprising pages 1 to 41. Copy of cash book for the period 1st April, 2008 to 31st March, 2009 appears at pages 13 to 18 of the Paper Book.

From the record we find that small cash was deposited by the assessee against which he used to issue cheques. Income on account of discount and commission was offered to tax in the return but since the assessee did not file any confirmation from the persons from whom cash was received, the AO made addition in respect of the entire cash deposited in the bank. We find that there was also withdrawal of cash from the very same bank account, accordingly credit for the same was required to be given to by the assessee. Keeping in view the totality of facts and circumstances of the case and nature of business of the assessee we

In the result, the appeal filed by the assessee is allowed for statistical purposes.