INCOME TAX OFFICER WARD-1(2), RAIGARH(CG) vs. SHRI SANJAY JADWANI, RAIPUR (CG)

Per Pavan Kumar Gadale, JM

This is an appeal filed by the Revenue against the order of the CIT(A)-

Raipur, dated 7.5.2012 for the assessment year 2009-2010.

was called for hearing. Therefore, we proceed to decide the appeal of the

revenue exparte-qua-respondent-assessee after hearing ld D.R. and on the

basis of material available on record.

2 ITA No.95/Rpr/2012 Assessment Year : 2009-2010

“1. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.4,48,799/- on account of unaccounted cash sales.” 2. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.29,86,105/- made by the AO on account of peak credit balance of undisclosed bank account with IDBI bank. 3. Whether in law and on facts & circumstances of the case, the CIT(A) was justified in admitting additional evidence in violation of Rule 46A of I.T.Rules, 1962.”

stockiest of Hero Honda spare parts. The Assessing Officer found that the

assessed has shown gross profit and net profit at Rs.35,89,692/-(3.65%)

and Rs.9,74,667/-(0.99%) as against total sales of Rs.9,83,47,730/- as

against gross profit shown and net profit shown of Rs.20,05,,873/-(2.86%)

and Rs.6,72,267/-(0.96%) in the immediately preceding assessment year.

The Assessing Officer also noticed that the assessee has been maintaining

two bank accounts i.e. with State Bank of India and IDI Bank. He observed

that the bank account maintained by the assessee with State Bank of India

is mentioned in the balance sheet whereas the bank account maintained with

IDBI bank is missing. Since the total cash deposits in both the bank

accounts comes to Rs.1,22,95,861/- and the assessee has not submitted

any explanation regarding the same, the Assessing Officer treated

3 ITA No.95/Rpr/2012 Assessment Year : 2009-2010

Rs.,1,22,95,861/- as undisclosed cash sales of the assessee. The Assessing

Officer also calculated the gross profit rate at 3.65% of undisclosed cash

sales and added Rs.4,48,799/- to the income of the assessee. The

Assessing Officer added Rs.29,86,105/- on account of peak credit balance.

the CIT(A), the assessee explained that the cash deposits and withdrawn

with the IDBI account could not be furnished to the Assessing officer within

the time given by him i.e.22.12.2011 as the account was not operational

The assessee filed bank statement of IDBI bank, Civil Lines, Raipur and

personal balance sheet of the assessee, explanation of source of cash

deposits and nature of payment entries in IDBI bank account before the

CIT(A).

Assessing Officer for his comments. The Assessing Officer sent his remand

report, stating as under:

“On verification, it is noticed that the cash deposits in the bank account maintained with the SBI has been incorporated in the books of account. Now that the appellant has furnished the copy of account of Hero Honda Motors Ltd. In the personal capacity and other documents in support of the profit and loss account from trading activity carried from IDBI bank, whereby the appellant has shown additional gross profit of Rs.2,53,430/- the same has been verified with the documents

4 ITA No.95/Rpr/2012 Assessment Year : 2009-2010

and IDBI bank statement in support of appellant’s claim, that it is therefore, requested to decide this issue on merits.” 7. The CIT(A) after considering the remand report and the submission of

the assessee deleted the addition observing as under:

“It is seen that the appellant has carried out his business activity in M/s. Sanjay Automobiles as stockiest of Hero Honda and that during the relevant year, he has also carried out some part of his business in his individual capacity in his personal saving account i.e. IDBI account. The appellant has placed before me the details of transactions carried out in the IDBI bank account, his personal balance sheet, P&L account, bank book of IDBI bank account, his personal cash book and invoices in respect of trading business. As the AO accepted that the bank account in the State Bank of India is duly reflected in the audited books of account and the transactions in bank account in IDBI has also been explained by the appellant inasmuch as the appellant had carried out trading business from the saving bank account in IDBI, the fact remains that both the bank accounts in respect of which additions were made by the AO stands explained by the appellant. Even in the remand report, the AO has not pointed out any adverse remark on the explanation putforth by the appellant. Therefore, according to the P&L account, of the assessee in personal capacity, there is a clear cut escapement of income to the tune of Rs.2,55,430/-, which has also been verified and accepted by the AO. Hence, the addition made by the AO on peak credit theory cannot be sustained, when the transaction of the IDBI bank account is explained by the appellant and has been accepted by the AO. Accordingly, the addition of Rs.4,48,,799/- and Rs.29,86,105/- are reduced to rs.2,55,430/-. The appellant in all gets relief of Rs.4,48,799/- and Rs.27,30,,675/- (Rs.29,86,105 – Rs.2,55,430/-).”

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lower authorities, we find that no specific error in the order of the CIT(A)

could be pointed out by ld D.R. Therefore, we do not find any good reason

to interfere with the order of the CIT(A), which is hereby confirmed and

grounds of appeal of the revenue is rejected.

Order pronounced on 11/01/2018.

Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Raipur; Dated 11/01/2018 B.K.Parida, SPS

Copy of the Order forwarded to : 1. The Appellant : Income Tax Officer, Ward - 1(2), Raipur 2. The Respondent. Shri Sanjay Jadwani, Sanjay Automobiles, M.G.Road, Raipur 3. The CIT(A)-Raipur 4. Pr.CIT- Raipur 5. DR, ITAT, Raipur 6. Guard file. //True Copy//

BY ORDER,

SR.PRIVATE SECRETARY ITAT, Raipur