SH. RUPINDER PAL SINGH,LUDHIANA vs. ITO, W-II(2), LUDHIANA

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ITA 1699/CHANDI/2017Status: DisposedITAT Chandigarh29 October 2018AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cash deposits represented total sale receipts of the trading business, not the entire income. They directed that the assessee be taxed at 5% on the turnover reflected in the bank account as per Section 44AF.

What were the facts?

The assessee had cash deposits of Rs. 27,35,000/- in their savings bank account. The Assessing Officer treated these as peak cash deposits and made an addition under Section 69. The CIT(A) confirmed this addition in an ex-parte order.

What were the issues?

Whether cash deposits in a bank account represent income or sale receipts of a business, and how to determine the profit element thereof.

Which sections of the Income-tax Act were involved?

Section 69,Section 44AF

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH BENCH

Before: SMT. DIVA SINGH, JM & Dr. B.R.R. KUMAR , AM

For Respondent: Smt. Chandrakanta
Hearing: 29/08/2018Pronounced: 29/10/2018

आदेश/Order PER DR. B.R.R. KUMAR, A.M.: The present appeal has been filed by the Assessee against the order of the Ld. CIT(A)-1, Ludhiana dt. 19/08/2016.

2.

The hand written grounds filed by the assessee (scanned copy ) are as under:

3.

The appeal has been barred by 31 days. The assessee submitted that owing to his ill health the appeal could not be filed in time. He produce the medical certificate to that extent, hence the delay is hereby condoned.

4.

The brief and straight facts of the case are that the assessee has cash deposits of Rs. 27,35,000/- in the savings bank account maintained with HDFC

Bank. Before the Assessing Officer it was explained that the assessee is in the business of whole sale trading of clothes and earned income out of the commission / brokerage / trading of clothes. The assessee has been filing returns under section 44AF of the Income Tax Act,1961 . The Assessing Officer has made addition of Rs. 20,14,370/- being the peak cash deposits under section 69 and levied tax of Rs. 8,63,830/-.

5.

The Ld. CIT(A) in an ex-parte order confirmed the addition made by the Assessing Officer.

6.

Before us, through the grounds of appeal the assessee has submitted that the cash deposits is not his total income but it is the total sale receipts of the trading business. The assessee has submitted that the 5% of the turnover can be at best treated as the profits of the business.

7.

The Ld. DR relied on the order of the lower authorities.

8.

The Revenue could not bring anything to controvert the plea of the assessee.

9.

Having gone through the facts of the case we feel that the ends of the justice would be met if the assessee is taxed @5% as per the provisions of Section 44AF on the total turnover as reflected in the bank account of the assessee.

10.

All the grounds are treated as heard.

11.

As a result the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court. Sd/- Sd/- �दवा �संह डा. बी.आर.आर. कुमार, (DIVA SINGH) (Dr. B.R.R. KUMAR) �या�यक सद�य/ Judicial Member लेखा सद�य/ Accountant Member AG Date: 29/10/2018

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

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