Dhani Ram, New Delhi V. ITO, Ward-38(2), New Delhi

ITA 2817/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4017 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Opportunity of being heard; Principle of natural justice; Peak credit; Source of fund; Additional evidence
• Section: 44AD; 143(3); 142(1); 143(2); 69A; 13; 22; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI [THROUGH VIDEO CONFERENCING] BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA.NO.2817/DEL./2019 ASSESSMENT YEAR 2009-2010 SHRI DHANI RAM, H.NO.156, PKT.B-9, DDA FLATS, SECTOR-5, ROHINI, NEW DELHI 110 085. PAN AENPR3894N VS. THE INCOME TAX OFFICER, WARD-38(2), ROOM NO. 1006, E-2 BLOCK, PRATYAKSHKAR BHAWAN, CIVIC CENTRE, DELHI -110002. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI KAPIL GOEL, ADVOCATE FOR REVENUE : SHRI R.K. GUPTA, SR. D.R. DATE OF HEARING : 03.08.2021 DATE OF PRONOUNCEMENT : 07 . 1 0.2021 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.01.2019 OF THE LD. CIT(A)-13, NEW DELHI, RELATING TO THE A.Y. 2009-2010. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE RETURN OF INCOME FOR THE A.Y. 2009-10 WAS FILED BY THE ASSESSEE ON 22.07.2009 AT A TOTAL INCOME OF RS.1,90,314/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT THROUGH 2 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. CASS ON THE BASIS OF AIR INFORMATION THAT THE ASSESSEE DURING THE F.Y. 2008-09 HAS DEPOSITED CASH OF RS. 39,15,000/- IN HIS SAVING BANK ACCOUNT NO. XXXX8338 MAINTAINED WITH THE AXIS BANK LTD., SECTOR-7, ROHINI, DELHI. THE STATUTORY NOTICE UNDER SECTION 143(2) WAS ACCORDINGLY ISSUED ON 19.08.2010 FIXING THE CASE FOR HEARING ON 31.08.2010. THE NOTICE WAS SERVED UPON THE ASSESSEE THROUGH SPEED POST AT HIS GIVEN ADDRESS. THE ASSESSEE DID NOT ATTEND THE CASE ON THE GIVEN DATE. SUBSEQUENTLY NOTICE U/S 142(1) WAS ISSUED ON VARIOUS DATES. THE SAID NOTICES ALSO REMAINED UN-COMPLIED WITH. HOWEVER, THE ASSESSEE HIMSELF ATTENDED THE ASSESSMENT PROCEEDINGS ON 17.10.2011. THE A.O. PROVIDED HIM A COPY OF NOTICE ISSUED ON 28.09.2011 U/S 142(1) OF THE ACT ALONG WITH A COPY OF AIR INFORMATION FOR NECESSARY COMPLIANCE. 2.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS SPECIFIC DETAILS REGARDING NATURE OF BUSINESS ACTIVITIES AND SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNTS WERE SOUGHT. THE REQUISITE INFORMATION WAS NOT PROVIDED BY THE ASSESSEE. AS THE REQUISITE DETAILS WERE NOT FILED BY THE ASSESSEE EVEN 3 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. AFTER GIVING ENOUGH OPPORTUNITIES AND THE CASE WAS GETTING BARRED BY LIMITATION ON 31.12.2011, THERE WAS NO OTHER OPTION WITH THE AO BUT TO PASS ASSESSMENT ORDER EX-PARTE ON THE MATERIAL ALREADY AVAILABLE ON RECORD OR PROVIDED BY THE ASSESSEE. THE A.O. ACCORDINGLY PASSED ASSESSMENT ORDER ON 26.12.2011 AT A TOTAL INCOME OF RS. 42,43,176/- AS AGAINST THE RETURNED INCOME OF RS. 1,90,314/-. THE AO ADDED AN AMOUNT OF RS.40,41,371/- ON ACCOUNT OF UN- EXPLAINED CASH CREDIT AND HAS ALSO ADDED RS.11,491/- ON ACCOUNT OF UNDISCLOSED INTEREST INCOME. 2.2. AGGRIEVED WITH SUCH ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). SINCE THE ASSESSEE DID NOT APPEAR BEFORE THE LD. CIT(A), HE PASSED THE EX-PARTE ORDER. 2.3. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL RESTORED THE ISSUE TO THE FILE OF LD. CIT(A) FOR PASSING A SPEAKING ORDER, AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. 2.4. DURING THE REMAND PROCEEDINGS, THE ASSESSEE FILED CERTAIN ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A), WHO CALLED FOR REMAND REPORT FROM THE A.O. AFTER CONSIDERING THE REMAND REPORT OF THE A.O. AND THE REJOINDER OF THE ASSESSEE TO SUCH REMAND REPORT, THE LD. CIT(A) SUSTAINED THE ADDITION OF RS.40,41,371/- MADE BY THE A.O. BY OBSERVING AS UNDER : 4.2. AS NARRATED IN THE FACTS ABOVE, IT IS CLEAR THAT DESPITE REPEATED OPPORTUNITIES GIVEN DURING THE STAGE OF ORIGINAL ASSESSMENT AS WELL AS ORIGINAL APPELLATE PROCEEDINGS, THE APPELLANT DID NOT AVAIL OF THE SAME, RESULTING IN AN EX- PARTE ORDER BY THE A.O. AS WELL AS DISMISSAL OF APPEAL, IN LIMINE BY CIT(A). IN SECOND APPEAL BEFORE HON'BLE ITAT DESPITE NON ATTENDANCE, BY THE ASSESSEE, BY WAY OF NATURAL JUSTICE, THE MATTER WAS REMITTED TO THE FILE OF CIT(A). 4.3. SINCE THE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT THE MATTER WAS REMANDED TO THE ASSESSING OFFICER CALLING FOR 5 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. SPECIFIC COMMENTS ON THE SOURCE OF CASH DEPOSITS. THE A.O. VIDE HIS REMAND REPORT SUBMITTED THAT ONCE AGAIN THE ASSESSEE HAD NOT FULLY AVAILED THE OPPORTUNITY GIVEN TO HIM. NEVERTHELESS, THE A.O. ON THE BASIS OF DOCUMENTS AND SUBMISSION PROVIDED TO CIT(A) AS ADDITIONAL EVIDENCE, EXAMINED THE SAME AND HELD THAT THE DIFFERENCE OF TOTAL CREDIT ENTRIES AND THE DECLARED BUSINESS RECEIPTS(RUNNING OF TAXI BUSINESS IN THE NAME OF KAMESHWAR TOUR & TRAVELS) THAT IS RS.62,62,048 RS.22,20,677/- = RS.40,41,371/- WERE THE UNEXPLAINED CASH CREDITS OF THE ASSESSEE. 4.4. THE APPELLANT WAS CONFRONTED WITH THE REMAND REPORT OF THE A.O. THE APPELLANT STATED THAT AS PER THE CASH SUMMARY FURNISHED, THE CASH DEPOSITS OF RS.51,17,000/- WERE OUT OF CASH WITHDRAWALS OF RS.34,97,500/-. 4.5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS POINTED OUT THAT THE CASH BOOK SHOWS AN ENTRY 'TEMPLE LAND COLLECTION A/C'. THE APPELLANT 6 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. SAID THAT HE WAS GOING TO PURCHASE SOME LAND. OUT OF THIS ALSO CASH WAS UTILIZED. IT WAS ALSO [POINTED OUT THAT HE HAS WITHDRAWN IN HIS OWN NAME RS 5 LACS CASH. THE SOURCE WAS STATED TO BE DONATIONS COLLECTED FROM VARIOUS PEOPLE. HE WAS ASKED WHY HE DID NOT PRODUCE BOOKS OF ACCOUNT BEFORE THE AO DURING ASSESSMENT PROCEEDINGS. HE REPLIED THAT HE HAD SUFFERED LOT OF BUSINESS LOSS AND HE WAS IN DIFFICULTY. FURTHER THAT HE HAS CLOSED DOWN THE BUSINESS OF TAXI HIRE. 4.6. IT IS NOTED THAT AS PER AFFIDAVIT THE APPELLANT HAS STATED THAT DURING THE RELEVANT FINANCIAL YEAR 2008-09 HE MAINTAINED 9 BANK ACCOUNTS, 1 OF WHICH WAS CLOSED. BUT WHILE PREPARING THE CASH SUMMARY CHART AND PREPARING A SUMMARY 01 PEAK BALANCE ONLY FOUR ACCOUNTS HAVE BEEN REFERRED TO. THE BALANCE SHEET ALSO DOES NOT REFLECT ALL THE BANK ACCOUNTS. WHILE THE APPELLANT HAS CLAIMED TOTAL CASH WITHDRAWALS OF RS.34,97,500/- AS AGAINST CASH DEPOSIT OF RS.51,17,000/-, HE HAS NOT 7 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. BEEN ABLE TO SHOW THE CASH FLOW IN TERMS OF INTRA BANK DEBIT AND CREDIT NOR THE MOVEMENT OF CASH BETWEEN THE VARIOUS BANK ACCOUNTS HELD. 4.7. IN LIGHT OF THE ABOVE FACTS IT IS CLEAR THAT DESPITE SEVERAL OPPORTUNITIES AT VARIOUS STAGES, HE HAS BEEN UNABLE TO DISCHARGE THE ONUS CAST UPON HIM TO PROVE OR SATISFACTORILY EXPLAIN THE SOURCES OF CASH CREDITS IN HIS ACCOUNT. HENCE, THE ADDITION OF RS.40,41,371/- IS HEREBY CONFIRMED. 2.5. SO FAR AS THE INTEREST INCOME OF RS.11,491/- IS CONCERNED, THE LD. CIT(A) ALSO SUSTAINED THE SAME TO THE EXTENT OF RS.6,840/- AND DELETED AN AMOUNT OF RS.4,651/- WHICH WAS OFFERED FOR TAXATION BY THE ASSESSEE. 3. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ORDER PASSED BY LD AO U/S 143(3) WITHOUT 8 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. APPRECIATING THAT ASSEESSE WAS CARRYING A BUSINESS OF RUNNING OF TAXI ON HIRE. 1.1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ORDER PASSED BY LD AO U/S 143(3), WITHOUT APPRECIATING THAT LD AO PASSED THE ORDER WITHOUT APPLICATION OF MIND AND TREATING ALL CREDIT ENTRIES IN THE VARIOUS BANK ACCOUNTS MAINTAINED BY THE ASSESSEE, AFTER CONSIDERING THE TURNOVER DECLARED BY THE ASSESSEE, AND TREATED THE DIFFERENCE AS UNEXPLAINED CASH CREDITS/CASH DEPOSITS FROM UNDISCLOSED SOURCES OF INCOME. 1.2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ORDER PASSED BY LD AO U/S 143(3) WITHOUT APPRECIATING THAT THERE ARE FREQUENT CASH WITHDRAWAL FROM THE BANKS FOR DAY TO DAY REQUIREMENT OF TAXI HIRE BUSINESS AND DEPOSITING BACK THE EXCESS CASH IN THE SAME/OTHER BANK ACCOUNT MAINTAINED BY THE ASSESSEE. 9 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. 1.3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ORDER PASSED BY LD AO U/S 143(3) WITHOUT APPRECIATING THAT NOTICE U/S 143(2) DATED 19/08/2010 STATUTORILY REQUIRED TO BE SERVED BEFORE 30/09/2010, WHICH WAS NOT SERVED TO THE ASSESSEE WITHIN TIME, HENCE ORDER PASSED U/S 143(3) WITHOUT JURISDICTION AND APPLICATION OF MIND. 1.4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ORDER PASSED BY LD AO U/S 143(3) AS NONE OF THE ASSESSEE SUBMISSION IS APPRECIATED WHILE ADJUDICATING THE APPEAL; 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN SUSTAINING THE ORDER PASSED BY LD AO U/S WITHOUT APPRECIATING THAT ALL THE ADDITIONS MADE ARE WITHOUT BRINGING LEGALLY ADMISSIBLE DOCUMENT ON RECORDS; 10 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN NOT RESTORING THE RETURNED INCOME DECLARED BY ASSESSEE IN ITS RETURN OF INCOME . 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, ID CIT-A ERRED IN NOT DELETING THE ADDITION MADE BY LD AO WHICH WAS ALSO UNLAWFUL AND MADE IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THAT THE APPELLANT CRAVES LEAVE TO ADD ADD/ALTER ANY/ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 4. LEARNED COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.40,41,371/-. HE SUBMITTED THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF TAXI PLYING. EVEN THE A.O. IN THE REMAND REPORT ALSO HAS ACCEPTED THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF OPERATION OF TAXIES WHICH HAS BEEN REPRODUCED BY THE LD. 11 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. CIT(A) AT PAGES 5 AND 6 OF HIS ORDER. FURTHER IN THE EARLIER AS WELL AS IN SUCCEEDING YEARS ALSO THE REVENUE HAS ACCEPTED THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TAXI OPERATION. FURTHER IN A.Y. 2010-11 IN THE ORDER PASSED UNDER SECTION 143(3) IT HAS BEEN MENTIONED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TAXI OPERATION. THEREFORE, ONCE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TAXI OPERATIONS WHICH IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE, THEREFORE, THE STATED CASH DEPOSIT IN THE INSTANT CASE CANNOT BE GIVEN ANOTHER COLOUR OTHER THAN THE BUSINESS RECEIPT. FURTHER, THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT AS FAR AS THE STATED BANK DEPOSITS ARE CONCERNED. THEREFORE, THE SAME CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT. RELYING ON VARIOUS DECISIONS PLACED IN THE WRITTEN SYNOPSIS FILED, HE SUBMITTED THAT SINCE IT IS ESTABLISHED THAT THE ONLY SOURCE OF INCOME OF THE ASSESSEE IS FROM TAXI OPERATION AND ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT AND THERE IS NO EVIDENCE OF ANY OTHER ACTIVITY BY THE ASSESSEE TO GENERATE SUCH BANK DEPOSITS, THEREFORE, THE DIFFERENCE IN THE RECEIPTS AS PER THE BANK ACCOUNT AND THE 12 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. RECEIPT ALREADY DECLARED IN THE P & L A/C CANNOT BE BROUGHT TO TAX UNDER SECTION 68 OF THE I.T. ACT, 1961 AND ONLY SOME PERCENTAGE OF PROFIT SHOULD BE ADOPTED. FOR THE ABOVE PROPOSITION, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF ITAT, DELHI BENCH IN THE CASE OF SHRI SOURABH KUMAR, NEW DELHI VS., ITO, WARD-46(4), NEW DELHI VIDE ITA.NO.113/DEL./2020 ORDER DATED 24.06.2021 AND VARIOUS OTHER DECISIONS. 4.1. REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LAKHMICHAND BAIJNATH VS. CIT [1959] 35 ITR 416 (SC), HE SUBMITTED THAT THE HONBLE SUPREME COURT IN THE SAID DECISION HAS HELD THAT WHEN THE AMOUNT IS CREDITED IN THE BUSINESS BOOKS, IT IS NOT AN UNREASONABLE INFERENCE TO DRAW THAT IT IS A RECEIPT FROM BUSINESS. RELYING ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF J.K. CHOKSHI VS., ACIT VIDE TAX APPEAL NO.149/ 2003 ORDER DATED 22.12.2014, HE SUBMITTED THAT THE HONBLE GUJARAT HIGH COURT IN THE SAID DECISION HAS HELD THAT ONCE IT IS ESTABLISHED THAT THE ASSESSEE HAD NO OTHER SOURCE OF INCOME 13 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. AT THE RELEVANT TIME OR IN THE PAST, IT COULD BE SAFELY CONCLUDED THAT THE ASSESSEE HAD NO OTHER INCOME OTHER THAN THE INCOME FROM BUSINESS. RELYING ON THE FOLLOWING DECISIONS, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE CASE OF UNACCOUNTED BUSINESS TRANSACTION, ONLY THE PROFIT ELEMENT CAN BE ADDED AS INCOME. CIT V. PRESIDENT INDUSTRIES, REPORTED IN (2002) 258 ITR 654. CIT V. GURUBACHHUN SINGH J. JUNEJA, REPORTED IN (2008) 302 ITR 63 (GUJ.). CIT V. SAMIR SYNTHETICS MILL, REPORTED IN (2010) 326 ITR 410. HONBLE GUJARAT HIGH COURT IN CASE OF CIT V. SATHYANARAYN P. RATHI REPORTED IN (2013) 38 TAXAMANN.COM 402. HONBLE HIGH COURT IN CASE OF CIT VS. BAHUL K DAGA REPORTED IN 79 TAXMANN.COM 337. MAN MOHAN SADANI V. CIT REPORTED IN (2008) 304 ITR 52. 14 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. HONBLE CALCUTTA HIGH COURT IN THE CASE OF PCIT VS., SUBARNA RICE MILL REPORTED IN (2018) 96 TAXMANN.COM 286. RELIANCE IS FURTHER PLACED ON THE DECISION OF THE HON'BLE MADHYA PRADESH HIGH COURT IN CIT V. BALCHAND AJIT KUMAR 263 ITR 610 (MP), WHEREIN IT WAS HELD THAT THE TOTAL SALE COULD NOT BE REGARDED AS PROFIT OF THE ASSESSEE. 4.2. HE ACCORDINGLY SUBMITTED THAT ONLY SOME PROFIT SHOULD BE ESTIMATED OF SUCH UNACCOUNTED RECEIPTS AND THE ENTIRE AMOUNT CANNOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE I.T. ACT, 1961. HE ALSO RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS., MAYAWATI [2011] 338 ITR 563 (DEL.). 5. THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORDERS OF THE A.O. AND LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE IS CHANGING HIS STAND FROM TIME TO TIME. HE SUBMITTED THAT THE ASSESSEE BEFORE THE LOWER AUTHORITIES HAD 15 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. STATED THAT THE CASH DEPOSITS WERE OUT OF CASH WITHDRAWAL FROM THE BANK EARLIER. NOW THE ASSESSEE IS SAYING THAT THE AMOUNT DEPOSITED IN THE BANK IS BUSINESS RECEIPT. HE SUBMITTED THAT THE ASSESSEE HAS MISERABLY FAILED TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF ANY OF THE AUTHORITIES REGARDING THE SOURCE OF DEPOSIT AND WHY HE HAS NOT DISCLOSED THE SAID RECEIPT IN THE RETURN OF INCOME. HE SUBMITTED THAT THE LD. CIT(A) HAS GIVEN VALID REASONS WHILE UPHOLDING THE ADDITION MADE BY THE A.O. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE LD. CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE ASSESSEE BE DISMISSED. 6. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. I FIND THE A.O. IN THE INSTANT CASE MADE AN ADDITION OF RS.40,41,371/- AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE I.T. ACT, 1961 SINCE THERE WAS DIFFERENCE BETWEEN THE DEPOSITS IN THE VARIOUS BANK ACCOUNTS MAINTAINED BY THE ASSESSEE AND THE RECEIPTS SHOWN IN THE P & L A/C. I FIND THE 16 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. LD. CIT(A) UPHELD THE ACTION OF THE A.O, THE REASONS OF WHICH HAVE ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPH. IT IS THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ONLY BUSINESS OF THE ASSESSEE IS THAT OF TAXI OPERATION AND THE ENTIRE DEPOSITS IN VARIOUS BANK ACCOUNTS ARE OUT OF TAXI PLYING. FURTHER THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT, THEREFORE, THE ADDITION, IF ANY, CAN BE MADE BY ESTIMATING THE DIFFERENCE IN THE BANK DEPOSITS AND THE ENTIRE DEPOSITS CANNOT BE ADDED UNDER SECTION 68 OF THE I.T. ACT, 1961. IT IS ALSO HIS SUBMISSION THAT PART OF THE DEPOSIT WAS MADE OUT OF THE PREVIOUS WITHDRAWALS FROM THE BANK ACCOUNT AND, THEREFORE, THE ENTIRE ADDITION CANNOT BE MADE UNDER SECTION 68 OF THE I.T. ACT, 1961. 6.1. I FIND SOME FORCE IN THE ABOVE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE. IT IS AN ADMITTED FACT THAT THE A.O. IN THE PRECEDING AS WELL AS SUCCEEDING ASSESSMENT YEARS AND ALSO IN THE REMAND REPORT FOR THE IMPUGNED ASSESSMENT YEAR HAS MENTIONED THAT ASSESSEE IS IN THE BUSINESS OF TAXI OPERATION. THERE IS NO OTHER EVIDENCE BEFORE 17 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. THE A.O. THAT THE ASSESSEE IS ENGAGED IN ANY OTHER ACTIVITY OTHER THAN TAXI PLYING. FURTHER THE ASSESSEE IS ALSO NOT MAINTAINING ANY BOOKS OF ACCOUNT. 6.2. I FIND IN THE A.Y. 2010-11 THE CASE OF THE ASSESSEE WAS REOPENED AND IN THE ORDER PASSED UNDER SECTION 143(3)/147 DATED 04.09.2014 THE A.O. HAS ACCEPTED THE RETURNED INCOME OF RS.2,23,820/- BY OBSERVING AS UNDER : IN THIS CASE, THE RETURN OF INCOME DECLARING INCOME OF RS.2,23,820/- AFTER CLAIMING DEDUCTION OF RS.72,453/- UNDER CHAPTER VIA WAS FILED ON 31.07.2010 THROUGH E-MODE. NOTICE U/S 148 OF I.T. ACT, 1961 WAS ISSUED ON 29.04.2013 AFTER RECORDING REASONS. IN RESPONSE THE ASSESSEE FILED A LETTER STATING THAT HIS RETURN OF INCOME DATED 31.07.2010 MAY BE TREATED AS HIS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148. IN RESPONSE TO VARIOUS STATUTORY NOTICES ISSUED U/S .143(2)/142(I) OF THE INCOME TAX ACT, 1961 ON DIFFERENT DATES, SHRI SANJEEV VERMA, ADVOCATE & AR OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS 18 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. FROM TIME TO TIME AND FURNISHED RELEVANT REQUISITE DETAILS, INFORMATION AND DOCUMENTS WHICH HAVE HEM EXAMINED AND PLACED ON FILE. THE CASE WAS DISCUSSED WITH HIM. 2. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF HIRING OF FOUR WHEELERS FOR TRANSPORTING AND TOURS OF PASSENGERS TO VARIOUS PLACE WITHIN DELHI AND OUTSIDE DELHI. A DISCUSSION THE RETURNED INCOME OF THE ASSESSEE IS HEREBY ACCEPTED. ISSUE NECESSARY FORMS. SD/- TH. TOMMY MONSANG INCOME TAX OFFICER, WARD-21(1), NEW DELHI. 6.3. I FIND THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI SORABH KUMAR, NEW DELHI VS., ITO, WARD-46(4), NEW DELHI VIDE ITA.NO.113/DEL./2020 DATED 24.06.2021 FOR THE A.Y. 2011-12 UNDER SOMEWHAT SIMILAR CIRCUMSTANCES HAS ESTIMATED THE PROFIT OF THE ASSESSEE AS AGAINST ADDITION 19 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. OF THE WHOLE AMOUNT UNDER SECTION 69A MADE BY THE A.O. AND UPHELD BY THE LD. CIT(A) BY OBSERVING AS UNDER : 11. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE LEARNED CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. I FIND THE AO IN THE INSTANT CASE MADE ADDITION OF 38,91,055/- U/S 69A OF THE ACT AS UNEXPLAINED MONEY ON THE GROUND THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE SOURCE OF CASH DEPOSITS OF THE ABOVE AMOUNT IN THE BANK ACCOUNT MAINTAINED WITH HDFC BANK, INDARPURI BRANCH. I FIND THE LEARNED CIT(A) UPHELD THE ACTION OF THE AO ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE THAT THE DEPOSITS AND WITHDRAWALS ARE ON ACCOUNT OF SALE AND PURCHASE, SINCE, THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENT OR EVIDENCE IN THE NATURE OF SALE BILLS, PURCHASE BILLS AND LEDGER ACCOUNT OF SALE AND PURCHASE. HE ALSO REJECTED THE THEORY OF PEAK CREDIT AND THEORY OF PREVIOUS CASH WITHDRAWALS ELIGIBLE FOR SUBSEQUENT DEPOSITS. IT IS THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS ENGAGED IN THE SMALL BUSINESS OF SALE AND 20 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. PURCHASE OF OLD DHOTI USED IN POLISHING OF FURNITURE AND PAINT. THE ASSESSEE IS NOT LIABLE FOR ANY REGISTRATION UNDER VAT AS THE GOODS IN WHICH THE ASSESSEE DEALS WITH FALL UNDER THE EXEMPTED GOODS UNDER THE ACT. SINCE, THE INCOME OF THE ASSESSEE IS BELOW THE TAXABLE LIMIT, THE ASSESSEE DID NOT FILE RETURN OF INCOME. IT IS ALSO THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT HE HAS PRODUCED THE NECESSARY PURCHASE AND SALE BILLS BEFORE THE AO AND THE CIT(A) AND IN THE SUBSEQUENT YEAR, THE AO HAD PASSED THE ORDER U/S 147/143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.1,70,800/- ON THE TOTAL CASH DEPOSITS OF RS.16,12,224/- WHICH COMES TO 10.57%. 12. I FIND SOME FORCE IN THE ABOVE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE. THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE SHOWS THAT THE ASSESSEE HAS FILED THE COPY OF SALE BILLS AND THE PURCHASE BILLS BEFORE THE LEARNED CIT(A) TO SUBSTANTIATE THE SALE AND PURCHASE. FURTHER IN THE SUBSEQUENT ASSESSMENT YEAR, THE CASE OF THE ASSESSEE WAS RE-OPENED ON ACCOUNT OF CASH DEPOSITS OF RS.16,12,224/- IN UNION BANK OF INDIA AND THE AO PASSED THE ORDER U/S 143(3) 21 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. OF THE ACT ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.1,70,800/- WHICH COMES TO 10.59% OF THE TOTAL DEPOSITS. THE RELEVANT ASSESSMENT ORDER PASSED BY THE SAME ASSESSING OFFICER WHO HAS PASSED THE ORDER FOR THE IMPUGNED ASSESSMENT YEAR READS AS UNDER:- 22 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. 13. SINCE, THE AO IN THE SUBSEQUENT YEAR HAS ACCEPTED THE SUBMISSION OF THE ASSESSEE THAT IT IS ENGAGED IN THE BUSINESS OF HARDWARE AND TOOLS, THEREFORE, CONSIDERING THE TOTALITY OF FACTS OF THE CASE, I AM OF THE CONSIDERED OPINION THAT BUSINESS ACTIVITIES CARRIED OUT BY THE ASSESSEE CANNOT BE SIMPLY REJECTED AND THE ENTIRE CASH DEPOSITS CANNOT BE BROUGHT TO TAX AS UNEXPLAINED INCOME. SINCE, THE ASSESSEE IN THE INSTANT CASE HAS FILED PURCHASE AND SALE BILLS BEFORE THE LEARNED CIT(A), THEREFORE, THE BUSINESS ACTIVITY IS ESTABLISHED. FURTHER, THERE IS NO QUERY EITHER BY THE AO OR BY THE LEARNED CIT(A) REGARDING THE UTILIZATION OF THE SUBSTANTIAL WITHDRAWALS FROM THE SAID BANK ACCOUNT TO THE EXTENT OF RS.37,40,100/-. LOOKING TO THE FACTS OF THE PRESENT CASE AND IN VIEW OF VARIOUS DOCUMENTS FILED IN THE PAPER BOOK CONTAINING SCANNED COPIES OF PURCHASE AND SALE BILLS, I AM OF THE CONSIDERED OPINION THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.38,91,055/- MADE BY THE AO ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNT. SINCE, THE SAME AO IN THE SUBSEQUENT ASSESSMENT YEAR HAS ACCEPTED THE PROFIT RATE OF 10.59% U/S 44AD OF THE ACT, 23 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, I AM OF THE CONSIDERED OPINION THAT ADOPTION OF NET PROFIT @ 11% ON THE TOTAL BANK DEPOSITS OF RS.38,91,055/- WILL MEET THE ENDS OF THE JUSTICE. I HOLD AND DIRECT ACCORDINGLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 6.4. SINCE THE ASSESSEE IN THE INSTANT CASE IS ENGAGED IN THE BUSINESS OF TAXI OPERATION AS PER THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS AND AS PER THE REMAND REPORT OF THE A.O. FOR THE IMPUGNED ASSESSMENT YEAR AND THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT, THEREFORE, THE ENTIRE DEPOSITS IN THE BANK ACCOUNTS, IN MY OPINION, IS THE BUSINESS RECEIPT OF THE ASSESSEE FROM TAXI OPERATION. SINCE THERE IS A DIFFERENCE OF RS.40,41,371/- BETWEEN THE BUSINESS RECEIPT SHOWN AT RS.22,20,677/- AND TOTAL DEPOSIT OF RS.62,62,048/-, THEREFORE, IN MY OPINION, ESTIMATION OF PROFIT @ 25% OF THE TOTAL DIFFERENCE OF RS.40,41,371/- AS AGAINST THE ADDITION OF RS.40,41,371/- WILL MEET THE ENDS OF 24 ITA.NO.2817/DEL./2019 SHRI DHANI RAM, DELHI. JUSTICE. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.10.2021. SD/- (R.K. PANDA) ACCOUNTANT MEMBER DELHI, DATED 07 TH OCTOBER, 2021 VBP/- COPY TO 1. THE APP ELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.