IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "D" : DELHI
BEFORE SHRI G.D. AGARWAL, VICE PRESIDENT
AND
SHRI BHAVNESH SAINI, JUDICIAL MEMBER
ITA.No.4753/Del./2015
Assessment Year 2011-2012
Mr. Ravinder Tyagi,
House No.271, Hastsal The Income Tax Officer,
Village, Uttam Nagar, vs. Ward 26(3),
New Delhi. New Delhi.
PAN AGWPT1442K
(Appellant) (Respondent)
Shri Ved Jain, Advocate,
For Assessee : Shri Ashish Goel,
Ms. Surbhi Goyal, C.As.
For Revenue : Shri J.K. Mishra, CIT.D.R.
Date of Hearing : 12.04.2019
Date of Pronouncement : 16.04.2019
ORDER
PER BHAVNESH SAINI, J.M.
This appeal by Assessee has been directed
against the Order of the Ld. CIT(A)-15, Delhi, Dated
25.05.2015, for the A.Y. 2011-2012, challenging the
addition of Rs.15,37,400/- on account of deposit in bank
account maintained with Oriental Bank of Commerce.
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
2. Briefly the facts of the case are that return of
income declaring income at Rs.1,82,070/- was filed by the
assessee on 31.07.2012. In this case, AIR information was
received about the assessee having made cash deposits of
Rs.15,37,400/- and Rs.11,61,500/- in his S.B. Account
with Oriental Bank of Commerce and Allahabad Bank
respectively. The same was not disclosed in his return of
income. Hence, the case was reopened and notice under
section 148 was served upon the assessee. The assessee
submitted that he was engaged in business of retail trading
of cotton fabrics and the cash deposits in his bank accounts
were out of sale turnover effected during the financial year
and payments received from outstanding debtors. However,
the assessee failed to furnish evidences to substantiate its
claim with regard to cash deposited in his bank accounts.
The A.O. accordingly made the addition of Rs.26,98,900/-
treating the same as unexplained cash deposits under
section 68 of the I.T. Act, 1961.
3. The assessee challenged the addition before the
Ld. CIT(A). Written submissions of the assessee is
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
reproduced in the appellate order, in which the assessee
briefly explained that assessee declared income of
Rs.1,82,070/- under different heads of income which
includes Income from Business and Profession
Rs.2,03,877/-, Income from other sources, Bank interest of
Rs.4,386/- and Miscellaneous Income of Rs.17,500/-,
totaling to Rs.2,25,763/- and after claiming deduction of
Rs.43,690/-, assessee declared income of Rs.1,82,073/-.
The assessee also declared agricultural income of
Rs.1,62,552/-. The assessee stated that cash deposits in the
Bank accounts is out of the sale turnover of the assessee
effected during the year and from payments received from
outstanding debtors. It was also submitted that A.O. has
failed to consider sufficient details filed on record, which are
copies of the Bank statements and both Bank Accounts,
income was declared under section 44AD, copy of the
computation of income, copy of the statement of affairs for
the year under appeal and preceding year, copy of cash flow
statement etc. Additionally, assessee also filed statement of
affairs for the assessment year under appeal as well as
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
preceding assessment year, details of turnover, details of
sales made in the year under appeal and preceding
assessment year along with purchases, supported by sale
bills, purchase bills, cash flow statement and summary of
the sundry debtors and creditors. The A.O. never asked for
any documents from the assessee and also failed to verify
the documents filed by assessee. It was submitted that
since assessee filed return of income under section 44AD of
the I.T. Act, 1961, therefore, he was not required to
maintain books of account. The assessee, therefore,
explained that both the additions are wholly unjustified. The
Ld. CIT(A), considering the explanation of assessee, deleted
the addition of Rs.11,61,500/-. The Ld. CIT(A), however,
confirmed the addition of Rs.15,37,400/-. The Ld. CIT(A)
noted that assessee failed to explain this addition and failed
to prove that it was collected with business activity of the
assessee.
4. Learned Counsel for the Assessee, reiterated the
submissions made before the authorities below and
submitted that assessee filed complete details i.e., sales,
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
purchases and details of debtors, which would prove that
assessee was doing business activities and declared income
under section 44AD of the I.T. Act, 1961, therefore, no
books of account were required to be maintained. In
preceding A.Y. 2010-2011, assessee had an income below
taxable limit, therefore, no return was filed. PB-2 is
computation of income to show bank interest which was
offered for taxation from both the Banks i.e., Allahabad
Bank and Oriental Bank of Commerce. PB-4 is balance-
sheet of the assessee for preceding A.Y. 2010-2011 in which
both the above accounts have been shown. PB-5 is details of
sales. PB-6 is cash flow statement in which also both Bank
Accounts have been shown. PB-9 is bank statement of
Oriental Bank of Commerce. Learned Counsel for the
Assessee submitted that A.O. made addition of the Bank
deposits, but, failed to consider that there are withdrawals
on several occasions, which includes the amount of
Rs.2,02,000/- and Rs.4 lakhs on different occasions for
which no benefit have been given. He has, therefore,
submitted that withdrawal should also been considered by
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
the A.O. as these Bank Accounts coming from earlier years
which pertains to business activities of the assessee. PB-19
is reply filed before A.O. along with complete details of sales,
purchases and debtors. PB-87 is details of the debtors. PB-
88 onwards are the confirmation of the accounts of the
debtors. PB-6 is cash flow statement. Learned Counsel for
the Assessee submitted that all the above documents were
filed with the return of income and the income tax return
gives an option to the assessee to disclose only one Bank
Account. Since, interest of both the Bank Accounts have
been disclosed to the Revenue Department, therefore, it
cannot be said that Bank Account have not been disclosed
to the Revenue Department. He has, therefore, submitted
that addition is wholly unjustified.
5. On the other hand, Ld. D.R. relied upon the
Orders of the authorities below and submitted that no
return for earlier year was filed. PB-27 is cash deposits in
the Bank Accounts which was mostly at the end of the year.
No source of the cash deposit have been explained. The Ld.
D.R. relied upon Judgment of the Hon'ble Punjab &
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
Haryana High Court in the case of Naresh Kumar vs. CIT,
Patiala [2017] 88 taxmann.com 547 (P & H).
6. We have considered the rival submissions and
perused the material available on record. Learned Counsel
for the Assessee has referred to computation of income for
earlier year as well as assessment year under appeal,
details of sales, purchase and debtors along with cash flow
statement, which would show that assessee has been filing
the return of income under section 44AD of the I.T. Act,
1961, as such, assessee was not required to maintain books
of account. The assessee has disclosed interest income in
the return of income from both the Bank Accounts,
therefore, it cannot be said that Oriental Bank of Commerce
have not been disclosed to the Revenue Department. The
material on record clearly suggest that assessee was doing
business activities and different sale proceeds amounts
received from the debtors, which have been deposited in the
Bank Accounts. One Bank account accepted by the Ld.
CIT(A) because it was disclosed in the return of income.
However, the fact is that interest from both the Bank
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
Accounts have been disclosed in the computation of income
filed with the return of income, as such, the Ld. CIT(A) on
the same reasoning should not have made the addition
against the assessee. The assessee has explained the source
of cash deposited in Oriental Bank of Commerce. Further,
A.O. has taken only the cash deposits in the Bank Account
ignoring the amounts withdrawn from the same Bank
account, which should have also been considered by the
authorities below. Thus, the assessee explained the source
of the Bank deposits through the evidences admitted on
record. We, therefore, do not find any justification to sustain
the addition. We, accordingly, set aside the Orders of the
authorities below and delete the entire addition.
7. In the result, appeal of Assessee allowed.
Order pronounced in the open Court.
Sd/- Sd/-
(G.D. AGARWAL) (BHAVNESH SAINI)
VICE PRESIDENT JUDICIAL MEMBER
Delhi, Dated 16th April, 2019
VBP/-
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ITA.No.4753/Del./2015 Mr. Ravinder
Tyagi, New Delhi.
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT "D" Bench
6. Guard File
//By Order//
Asst. Registrar : ITAT : Delhi Benches :
Delhi.
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