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Income Tax Appellate Tribunal, C/“SMC” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI
: 10.07.2017 सुनवाई क� तार�ख/ Date of hearing : 24.07.2017 घोषणा क� तार�ख /Date of Pronouncement आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal is filed by the assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A)-7, Chennai dated 28.04.2016 pertaining to assessment year 2009-10.
The assessee raised the grounds with regard to sustaining addition of `6,01,489/-, which is for cash deposited into savings bank account and a sum of `9,40,000/-, which is being the amount deposited into current account of the assessee.
The facts of the case are that the assessee is an individual, earning income from Snack Bar Business and trading in edible essences. Subsequently, the case was selected for scrutiny and notice u/s.143(2) was issued on 14.06.2011. In response, the ld.A.R submitted P&L account and Balance sheet of the Assessee. During the assessment proceedings, the AO found that as per the AIR information, the assessee has made cash deposits of `41,80,050/- during the year 2008-09 in SB account with M/s.Axis Bank and has made some cash deposits in his current account with ICICI bank and paid an amount of `2,38,373/- for credit card expenses. As per the balance sheet submitted by the assessee, it is seen that only the SB account balance is appearing in it and not the current account balance. The turnover disclosed by the assessee is `36,95,366/-.
On verification of the bank account of the assessee at Axix Bank, the AO found total deposits of `42,96,735/-, out of which `41,80,050/- was deposited in cash. The AO has treated an amount of `6,01,489/- being the difference in the amount credited in the bank and the amount shown as turnover as cash credits. Further, according to AO, the deposit of cash into the ICICI Bank of assessee aggregating to `9,40,000/- was added to the total income of assessee , in the absence of production of bank statement, books of account and any credible information with regard to the source of the aforesaid deposits. Another amount of `66,728/- was added to the total income of assessee on account of insufficient drawings. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).
3.1 On appeal, the CIT(A) confirmed the order of the AO by observing that this is being an unexplained bank deposit and the assessee could not produce any cogent evidence to explain the source of the same. Against the order of Ld.CIT(A), now the Revenue/Assessee is in appeal before us.
Before us, the ld.A.R submitted that these deposits were made out of disclosed sales turnover, being so, only GP on it to be estimated. Further, he submitted that in terms of Sec.285A of the Act, annual Information Return should report only the cash deposits in a Savings Bank account for assessment purposes and any cash deposits into the current account cannot be considered for making assessment as unexplained investment.
On the other hand, ld.D.R relied on the order of lower authorities and submitted that these deposits is undisclosed sales turnover of the assessee and the assessee has already accounted for purchase and expenses relating to these turnovers and hence, the entire amount of unexplained deposits into savings bank account as well as current account is to be considered as unexplained income of assessee u/s.69 of the Act.
We have heard both the parties and perused the material on record. In the present case, the amount of `6,01,489/- represents the unexplained deposit into Saving Bank account of the assessee and another amount of `9,40,000/- represents the unexplained cash deposit into Current account of assessee. Section-69 makes it clear that onus is on the assessee as regards furnishing of explanation relating to deposits, which is not recorded in the books of accounts, if any, maintained by the assessee. Where the assessee offers no explanation or where the explanation offered by the assessee is not satisfactory in the AO’s opinion, the value of the unexplained investments, the value of the unexplained investments would be treated as income of the financial year in question. Whenever explanation offered by the assessee were not fully relied upon by the Department, it cannot be said that the Department had any further burden to prove that this was an income of assessee. Where the assessee had failed to prove the source of investments to the satisfaction of the AO, the AO should be justified in treating the same as unexplained investment u/s.69 of the Act.
6.1 In the present case, the plea of assessee is that it is the part of the undisclosed turnover and being so, only GP of such to be estimated as income of assessee. The assessee, before us, was not able to show the details of the sales made by the assessee with reference to any purchase. In other words, in my opinion, as rightly pointed out by the ld.D.R, all the purchases and expenditure already recorded by the assessee in its books of accounts and once the purchases and expenses were already recorded by the assessee in his books of accounts, there is no question of estimating any income.
On such deposits made into bank account, the entire unaccounted deposits to be considered as unexplained income of assessee u/s.69of the Account. 6.2 Another argument of the ld.A.R is that Sec.285A provides only information with regard to cash deposit into SB A/c and it does not authorize the AO to collect information with reference to current account. In my opinion, addition made by the AO u/s.69 of the Act as explained earlier. Section 69 authorizes the AO to consider unexplained deposits into bank account, whenever assessee failed to explain the source of such deposits. Being so, I do not find any infirmity in the order of lower authorities and the same is confirmed. Hence, the grounds raised by the assessee stand rejected.
7. In the result, the appeal of assessee is dismissed. Order pronounced in the open court on 24th July, 2017. Sd/-
(चं� पूजार�) (CHANDRA POOJARI) लेखा सद�य /ACCOUNTANT MEMBER