THE ITO, 2(4), BHOPAL vs. SMT. MANJU RAJ, BHOPAL

आदेश /O R D E R

PER SHRI C.M. GARG, JM

This appeal has been filed by the Revenue against the order of

the learned CIT(A)-II, Bhopal, dated 26.5.2016 in First Appeal No.

CIT(A)-BPL-227/2014-15 for the assessment year 2011-12.

which notice of hearing was sent to the assessee at the address 1

ITO vs. Manju Raj ITDA No. 841/Ind/2016 given in Form No. 36 but the assessee refused to receive the notice.

Thereafter, the case was again fixed for hearing on 30.1.2017 but

the case was adjourned to 20.3.2017 for which date the notice for

hearing was again sent through ITO 2(4), Bhopal, but the same was

returned unserved with the remark “Not in Gulmohar, hence

returned.” At the time of hearing, there was neither any written

submission nor any-body appeared before the Tribunal. The

learned Departmental Representative (for short ‘DR’) was heard.

CIT(A) was not justified in restricting the addition of Rs.

40,98,050/- made by the Assessing Officer on account of

unexplained deposits in bank account to Rs.3,00,000/- thereby

granting relief of Rs.37,98,050/- to the assessee holding that only

peak credit balance of Rs.3,00,000/- should have been added to the

income of the assessee.

furnisher her return of income declaring total income of Rs.

2,26,000/-. The case was selected for scrutiny through CASS.

Accordingly notice u/s 143(2) was issued on 10.9.2012 which was

duly served upon the assessee. During the course of assessment 2

ITO vs. Manju Raj ITDA No. 841/Ind/2016 proceedings notices u/s 142(1) of the Act have been issued at the

addresses available on record. Another notice was also sent on

6.3.2014 at Shahjapur Petrol Pump fixing the date of hearing on

10.3.2014 but neither any compliance was made by the assessee

nor any-body attended the assessment proceedings.

that the assessee had deposited cash amounting to Rs.40,98,050/-

in her bank account maintained with Bank of India, TT Nagar

Branch, Bhopal. Since the assessee did not comply with the above

notices, therefore, vide notice u/s 142(1) of the Act dated 12.3.2014

the assessee was specifically asked to furnish source of cash

deposited in the bank account along with documentary evidence.

The assessee furnished copy of bank account only. Vide order sheet

entry dated 24.3.2014 the assessee was asked to furnish reply on

26.3.2014 of the balance queries as also source and nature of the

amount deposited in the bank account. The assessee did not

furnish the required information but sought for adjournment and at

the request of the assessee the Assessing Officer again fixed the

case for hearing on 27.3.2014. On this date also neither the

assessee attended nor any written reply was furnished. In this 3

ITO vs. Manju Raj ITDA No. 841/Ind/2016

scenario, the Assessing Officer was left with no option but to

presume that the assessee has no explanation to offer in respect of

the source of the cash deposited as also other deposits in her bank

account. From the above conduct of the assessee, the Assessing

Officer came to the conclusion that “it is clear that the assessee has

failed to furnish documentary evidences in respect of deposition of

cash amounting to Rs.40,98,050/- in her bank account, therefore, the

amount of Rs. 40,98,050/- remain unexplained as per the provision

of section 69 of Income Tax Act, 1961”. The Assessing Officer,

therefore, added Rs.40,98,050/- to the total income of the assessee

u/s 69 of the Act.

Officer, the assessee preferred first appeal before the learned CIT(A).

The learned CIT(A) after considering the submissions of the

assessee, restricted the addition to Rs.3,00,000/- with the following

observations :-

“7.4 I have considered the facts of the case and the

written submissions of the appellant. While the appellant

argued for total deletion of the addition of Rs.40,98,050/- 4

ITO vs. Manju Raj ITDA No. 841/Ind/2016

he also alternatively argued that the A.O. has erred in

taking into account only the cash deposits and not

considering the cash withdrawals being made at the

same time. He should have taken the cash withdrawals

into account and only the peak of the cash credits should

have been brought to tax.

It is seen that the A.O. has treated the entire receipts of

Rs.1,41,57,362/- as business turnover of the assessee

and assessed N.P. @ 8% thereon. Having included the

cash credits of Rs.40,98,050 in the business turnover,

there was no rationale to again add the sum to the total

income of the assessee as unexplained cash credit. There

is merit in the submission of the assessee that in view of

the facts of the case and the repeated cash deposits and

withdrawals made from the bank account, only the peak

credit balance should have been added to the income of

the assessee. Accordingly, the peak cash credit of

Rs.3,00,000/- (deposited on 22.11.2010) is directed to be

ITO vs. Manju Raj ITDA No. 841/Ind/2016

added to the income of the assessee. The addition of

Rs.40,98,050 is restricted to Rs.3,00,000/-.”

come up before the Tribunal.

her representative attended the proceedings and there was no

application or request for adjournment. However, on perusal of

appeal record and CIT(A) order along with the order of the Assessing

Officer, we find it appropriate to decide the appeal in the absence of

the assessee after hearing the arguments of the learned DR. We

proceed accordingly to decide the appeal.

the assessment order, inspite of providing adequate opportunities,

the assessee failed to furnish source of cash of Rs. 40,98,050/-

deposited in the bank account along with documentary evidence

before the Assessing Officer. In such a situation, the Assessing

Officer had no alternate but to add Rs. 40,98,050/- to the total

income of the assessee as unexplained income under section 69 of

the Act. The learned DR further submitted that even before the 6

ITO vs. Manju Raj ITDA No. 841/Ind/2016

learned CIT(A), the assessee failed to submit any evidence in

support of deposit of Rs.40,98,050/- in the bank account and as

such the learned CIT(A) was totally unjustified in restricted the

addition to Rs. 3 lacs. The learned DR, therefore, prayed that the

order of the learned CIT(A) deserves to be annulled and that of the

Assessing Officer restored.

learned counsel for the assessee submitted that the learned

Assessing Officer was not justified in taking into account only the

cash deposits and not considering the cash withdrawals made at

the same time. Then learned counsel for the assessee, therefore,

submitted before the first appellate authority that only the peak

credit balance should have been added to the total income of the

assessee.

parties in the wake of the facts of the case, we are of the considered

view that the Assessing Officer has made the addition on account of

net profit rate of 8% of entire receipts treating the same as business

turnover of the assessee which includes the impugned cash 7

ITO vs. Manju Raj ITDA No. 841/Ind/2016

deposits/credits of Rs.40,98,050/-. In this factual situation, when

the cash credits/deposits have been treated as turnover of the

assessee then the addition of the same amount would amount to

double addition which is not permissible as per the provisions of

the Act. We further observe that the learned CIT(A) by taking a

justified and correct approach, added the peak cash credit amount

of Rs.3 lacs as on 22.11.2010 and restricted the addition to Rs. 3

lacs. In view of the above, we are inclined to hold that the amount

of cash credits which have already been considered as turnover of

the assessee for calculating net profit @ 8% of the turnover then the

addition of the same amount cannot be held as sustainable and the

learned CIT(A) while restricting the addition to Rs. 3 lacs, has

rightly picked up the amount of peak cash credit. In view of the

above, we are unable to see any valid reason to interfere with the

order of the learned CIT(A) and there is no ambiguity, perversity or

any other reason to interfere with the same and, hence, we uphold

the same. The sole ground of the revenue, being de void of merit, is

dismissed.

ITO vs. Manju Raj ITDA No. 841/Ind/2016 The order has been pronounced in open Court on 21st March, 2017.

Sd/- sd/- लेखा सद�य �या�यक सद�य (O.P.Meena) (C.M. Garg) Accountant Member Judicial Member

March 21st 2017.

Dn/