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Mr. Ravinder Tyagi, House No.271, Hastsal Village, Uttam Nagar, New Delhi. vs. The Income Tax Officer, Ward – 26(3), New Delhi.
April, 17th 2019
       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.
                               2
                                    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
                                     3
                                         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
                                  4
                                        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,
                             5
                                  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
                               6
                                    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 &
                             7
                                 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
                                8
                                    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/-
                              9
                                   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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