RAJESH MAHAWAR, Jaipur V. ITO, Alwar

ITA 564/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1935 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 07-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 27-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Keywords: Business income; Corroborative evidences; Revised return
• Section: 44AD; 80C; 139(5)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 564/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 RAJESH MAHAWAR, H.NO. 4/9, RAJASHTAN HOUSING BOARD, BHIWADI, TIJARA, ALWAR. CUKE VS. INCOME TAX OFFICER, WARD 2(2), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BAXPM 3024 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA). JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/09/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/11/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A), ALWAR DATED 10/03/2016 FOR THE A.Y. 2 011-12. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SUPPLY OF SAND, AGGREGATE AND STONE ETC. THE ASSESSEE HAS FILED ITS ORIGINAL RETURN OF INCOME ON 05/1/2011 DECLARING TOTAL INCOME OF RS. 1 ,48,000/- UNDER THE HEAD INCOME FROM SALARIES. DURING THE COURSE OF A SSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED A REVISED RETUR N ON 10/12/2013 ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 2 DECLARING TOTAL INCOME OF RS. 4,35,120/- UNDER THE HEAD BUSINESS AND PROFESSION. THE ASSESSING OFFICER OBSERVED THAT AS PER PROVISIONS OF SECTION 139(5) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), REVISED RETURN CAN BE FILED BEFORE EXPIRY OF ONE YEAR BUT I N THIS CASE THE REVISED RETURN HAD NOT BEEN FILED WITHIN TIME HENCE TREATED AS VOID AB INITIO. THE ASSESSING OFFICER HAS MADE VARIOUS ADDITIONS UNDER THE DIFFERENT HEADS. THE LD. CIT(A) HAS CONFIRMED THE ADDITIONS MADE BY TH E ASSESSING OFFICER. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT BY T AKING FOLLOWING GROUNDS OF APPEAL: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN ASSESS ING THE INCOME FROM BUSINESS AT RS.7,97,114/- AS AGAINST RS.2,87,1 92/- ACCEPTED BY THE ASSESSEE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN NOT ACCEPTING THE CASH BALANCE OF RS. 4,00,628/- AS ON 01.04.2010 AND THEREBY ENHANCING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH TO RS.4,00,000/-. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION ON ACCOUNT OF INTEREST INCOME AT RS.2,323/- AS AGAINST RS. 1,898/- AND ALS O NOT CONSIDERING IT AS A PART OF BUSINESS INCOME. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN DISALLOWING THE CLAIM OF DEDUCTION UN DER CHAPTER VI-A OF RS.5,000/-. ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 3 4. THE 1 ST GROUND OF ASSESSEES APPEAL IS AGAINST CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE IN COME FROM BUSINESS AT RS. 7,97,114/- AS AGAINST RS. 2,87,192/-. THE LD. CI T(A) HAS CONFIRMED THE ADDITION BY HOLDING AS UNDER: 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS.7,97,114 HAS BEEN MADE BY THE AO TO THE RETURNED INCOME OF RS. 1 ,48,000 DECLARED BY THE APPELLANT IN THE RETURN FILED. BASED ON THE INFORMATION AVAILABLE IN THE FORM 26AS OF THE APPELLANT, IT WAS FOUND BY THE AO THAT APPELLANT HAS TRANSACTIONS AMOUNTING TO RS.99,63,93 0 FOR THE PERIOD UNDER CONSIDERATION FOR WHICH NOTHING HAS BEEN DECL ARED IN THE RETURN OF INCOME. THE APPELLANT HAD FAILED TO DISCLOSE EVE N A SINGLE RUPEE OF INCOME ON ACCOUNT OF INCOME FROM BUSINESS. THE APPE LLANT HAD ONLY DECLARED AN INCOME OF RS. 1,48,000/- ON ACCOUNT OF INCOME FROM SALARIES. 5.4 THE APPELLANT HAS STATED IN THE COURSE OF ASSES SMENT PROCEEDINGS THAT THESE ARE THE PROCEEDS OF BUSINESS AND ACCORDINGLY A BELATED RETURN OF INCOME WAS SOUGHT TO BE FILED AFTER DECLARING INCOM E ON THESE RECEIPTS. AO HAS APPLIED A PROFIT RATE OF 8% AS PRO VIDED UNDER THE PROVISIONS OF SECTION 44AD OF THE IT ACT ON THIS AM OUNT OF RS. 99,63,930 AND ESTIMATED THE PROFITS OF THE BUSINESS AT RS. 7,97,114. THE ESTIMATED RATE OF PROFITS HAS TO BE APPLIED IN THE ABSENCE OF ANY INCOME BEING DECLARED BY THE APPELLANT AND ALSO IT SUGGESTS THAT NO BOOKS OF ACCOUNTS AND SUPPORTING VOUCHERS WERE MAIN TAINED. 5.5 THE APPELLANT HAS STATED THAT A TURNOVER OF RS. 58,38,975 HAS BEEN DECLARED IN THE REVISED RETURN WHICH WAS FILED ON 1 0.12.2013 AND PROFIT @ 4.91% WAS DECLARED AT RS.2,87,121 IN THE RETURN F ILED. IT IS FURTHER ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 4 STATED THAT AN AMOUNT OF RS.27,87,117 HAS BEEN RECE IVED ON ACCOUNT OF TRANSPORT CHARGES ON WHICH NO INCOME AND NO LOSS WAS INCURRED. FURTHER, AO HAS INCLUDED AN AMOUNT OF RS.13,37,838 ON ACCOUNT OF RECEIPTS FROM M/S ROHAN BUILDERS (INDIA) PVT. LTD. AND THIS AMOUNT HAS BEEN CONSIDERED IN THE NEXT FINANCIAL YEAR ON ACCRU AL BASIS. AO HAS ACCOUNTED FOR THESE RECEIPTS ON CASH BASIS. 5.6 HAVING CONSIDERED THE MATERIAL PLACED ON RECORD , I FIND THAT APPELLANT HAS FILED INACCURATE INFORMATION IN THE RETURN OF I NCOME FILED ON 05.11.2011 AS AN INCOME OF ONLY RS. 1,48,000 ON ACC OUNT OF SALARIES WAS DECLARED. BASED ON THE INFORMATION AVAILABLE IN THE ITD DATA BASE, IT WAS FOUND THAT APPELLANT HAS BUSINESS RECEIPTS O F RS. 99,63,930 FOR THE PERIOD UNDER CONSIDERATION. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, EFFORTS HAVE BEEN MADE BY THE APPELLAN T TO FURTHER MISLEAD AND TO FURNISH HALF INFORMATION. IT IS SUBM ITTED THAT TURNOVER OF THE BUSINESS WAS ONLY RS.58,38,975 AND REMAINING RECEIPTS OF RS.27.87,117 ARE ON ACCOUNT OF TRANSPORT RECEIPTS. THESE FACTS HAVE REMAINED UNSUBSTANTIATED AND NO SUPPORTING EVIDENCE WAS EVER BROUGHT ON RECORD EITHER BEFORE THE AO OR IN THE CO URSE OF APPELLANT PROCEEDINGS. NO EVIDENCE OF ANY TRANSPORT BUSINESS BEING CARRIED OUT IS AVAILABLE OR HAS BEEN PUT ON RECORD. THE THEORY OF EARNING OF NO PROFIT AND NO LOSS ON THESE RECEIPTS IS TO AVOID DE CLARATION OF BUSINESS PROFITS ON SUCH RECEIPTS. FURTHER, THE ONLY POSSIBL E LOGIC IS IF SUCH AMOUNT IS CONSIDERED AS TURNOVER BY THE APPELLANT T HEN THE PROVISIONS OF SECTION 44AB OF THE IT ACT ALSO GET ATTRACTED. T HEREFORE, THE APPELLANT HAS CHOSEN TO UNDER STATE THE QUANTUM OF BUSINESS RECEIPTS FOR THE PERIOD UNDER CONSIDERATION. 5.7 FURTHER, AS REGARDS THE CONTRACTUAL RECEIPTS OF RS. 13,37,838 RECEIVED FROM ROHAN BUILDERS ARE CONCERNED, NO EVIDENCE OR O THER RATIONAL WAS FILED AS TO WHY SUCH RECEIPTS HAVE BEEN ACCOUNTED F OR IN THE NEXT YEAR. ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 5 THE APPELLANT HAS ALSO FAILED TO SUBMIT ANY EVIDENC E IN THE COURSE OF PRESENT PROCEEDINGS TO SUBSTANTIATE THE CLAIM OF HA VING INCLUDED/DECLARED SUCH RECEIPTS IN THE RETURN OF IN COME FOR THE NEXT YEAR (EVEN THOUGH IT IS UNJUSTIFIED) AS CLAIMED BY THE APPELLANT. 5.8 THEREFORE, IN VIEW OF THE ABOVE FACTS, I HOLD T HAT IT IS A CLEAR CASE OF FURNISHING OF FALSE INFORMATION IN THE RETURN OF IN COME AND NO BOOKS OF ACCOUNTS WERE EVER MAINTAINED. THE INFORMATION FURN ISHED AS REGARDS BUSINESS TURNOVER, CONTRACTUAL RECEIPTS AND RECEIPT S FROM TRANSPORT BUSINESS ON WHICH NO PROFIT OR LOSS HAS BEEN INCURR ED IS AGAIN NOT SUPPORTED WITH ANY EVIDENCE BUT ONLY TO DEFEAT THE PROVISION OF IT ACT AND IS AIMED AT AVOIDING THE PAYMENT OF RIGHTFUL TA XES WHICH ARE DUE IN THIS CASE. THUS, I HOLD THAT AO WAS JUSTIFIED IN ES TIMATING THE PROFITS OF THE BUSINESS @ 8% OF THE TOTAL RECEIPTS OF RS.99,63 ,930. ACCORDINGLY, I CONFIRM THE TRADING ADDITION OF RS.7,97,114 MADE BY THE AO UNDER THIS HEAD. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. THE LD AR OF THE ASSESSEE HAS SUBMITTED AS UNDER: 1. IN COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE EXPLA INED THAT HIS TURNOVER FROM SUPPLY OF SAND, AGGREGATE, STONE, ETC., DURING THE YEAR IS RS.58,38,975/-. IN SUPPORT OF THE SAME BOOKS OF ACCOUNTS AND THE BI LL BOOK WAS PRODUCED. THE AO, HOWEVER, OBSERVED THAT BOOKS OF ACCOUNTS AR E DEFECTIVE AND THUS LIABLE TO BE REJECTED AND INCOME IS REQUIRED TO BE COMPUTED U/S 44AD. 2. THEREAFTER, THE AO OBSERVED THAT THE TURNOVER OF TH E ASSESSEE AS PER THE BANK ACCOUNT OF THE ASSESSEE IS RS.86,26,092/- AS PER TH E DETAILS MENTIONED AT PG 5 OF THE ORDER. FURTHER, AS PER FORM NO.26AS (PB 24) , ASSESSEE HAS BEEN CREDITED FOR RS.13,37,838/- BY M/S ROHAN BUILDERS I NDIA PVT. LTD. BUT NOT RECORDED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS. HE THUS, TOOK THE TOTAL ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 6 TURNOVER OF THE BUSINESS AT RS.99,63,930/- AS AGAIN ST RS.58,38,975/- DECLARED BY THE ASSESSEE BY NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE AND THUS ASSESSED THE INCOME UNDER THE HEAD BUSINESS U/S 44A D AT RS.7,97,114/- (8% OF RS.99,63,930/-). 3. THE LD. CIT(A) AT PG 8, PARA 5.6 TO 5.8 UPHELD THE FINDINGS OF AO BY HOLDING THAT ITS CLAIM THAT RECEIPT OF RS.27,87,117/- IS ON ACCOUNT OF TRANSPORTATION WHICH HAS BEEN PAID BACK TO THE TRANSPORTER REMAINS UNSUBSTANTIATED AND ITS CLAIM THAT RECEIPT OF RS.13,37,838/- FROM ROHAN BUI LDERS HAS BEEN ACCOUNTED FOR IN THE NEXT YEAR WHEN ACTUALLY RECEIVED ALSO RE MAINS UNSUBSTANTIATED. 4. IT IS SUBMITTED THAT DURING THE YEAR ASSESSEE CARRI ED OUT THE WORK OF SUPPLY/TRANSPORTATION OF SAND, AGGREGATE, STONE, ET C. FOR AAKRITI CONSTRUCTION, GOEL CONSTRUCTION AND GANNON DUNKELY. THE TRANSPORT ATION WORK WAS CARRIED OUT FOR GANNON DUNKLEY AND GOEL CONSTRUCTION ALONG WITH THE SUPPLY WORK. THE AMOUNT RECEIVED FOR TRANSPORTATION FROM THESE P ARTIES IS PAID TO THE VARIOUS TRANSPORTERS. THE RECEIPT FROM THESE PARTIE S ON ACCOUNT OF SUPPLY AND ON ACCOUNT OF TRANSPORTATION VIS-A-VIS THAT TAKEN B Y THE AO IS AS UNDER:- (IN RS.) NAME OF PARTY SUPPLY BILL RAISED TRANSPORTATIO N BILL RAISED TOTAL TURNOVER AS PER ASSESSEE TURNOVER AS PER AO REMARK AAKRITI CONSTRUCTION (PB 18) 29,55,174/- - 29,55,174/- 29,55,174/- 25,00,000/- AO TOOK RECEIPT IN THE BANK ACCOUNT AS TURNOVER GOEL CONSTRUCTION (PB 20-21) 28,81,767/- 11,37,504/- 40,19,271/- 28,81,767/- 22, 57,130/- HOW AO TOOK AMOUNT OF TURNOVER IS NOT ASCERTAINABLE GANNON DUNKLEY (PB 19-20) 2,034/- 18,27,371/- 18,29,405/- 2,034/- 38,68,962/- ------DO----- TOTAL 58,38,975/- 29,64,875/- 88,03,850/- 58,38,975 /- 86,26,092/- FROM THE ABOVE TABLE, IT CAN BE NOTED THAT THE AO T OOK THE RECEIPT IN THE BANK ACCOUNT AS TOTAL TURNOVER WHICH INCLUDES THE TRANSP ORTATION RECEIPT. THE TRANSPORTATION RECEIPT IS NOT THE TURNOVER OF THE A SSESSEE AS THE SAME IS PAID ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 7 BACK TO THE VARIOUS TRANSPORTERS WHO DID THE TRANSP ORTATION WORK. THIS IS EVIDENT FROM THE LEDGER ACCOUNT OF TRANSPORTATION (PB 22-23) WHERE THE AMOUNT RECEIVED FROM GANNON DUNKLEY AND GOEL CONSTR UCTION IS CREDITED AND THE SAME IS PAID TO THE VARIOUS TRANSPORTERS/FILLIN G STATIONS. THUS, THE TRANSPORTATION RECEIPT CANNOT BE INCLUDED IN THE TU RNOVER FOR ESTIMATING THE PRESUMPTIVE RATE U/S 44AD. THEREFORE, THE TURNOVER OF THE ASSESSEE SHOULD BE CONSIDERED AT RS.58,38,975/- AND BY APPLYING N.P. R ATE OF 8% ON THE SAME, THE PROFIT SHOULD BE ASSESSED AT RS.4,67,118/- 5. SO FAR AS RECEIPT AS PER FORM NO.26AS IN RESPECT OF M/S ROHAN BUILDERS INDIA PVT. LTD. IS CONSIDERED, THE SAME IS NOT RECEIVED D URING THE YEAR AND THEREFORE THE SAME SHOULD NOT BE CONSIDERED IN TURNOVER FOR E STIMATING THE INCOME U/S 44AD. IN VIEW OF ABOVE, THE AO BE DIRECTED TO ASSESS THE INCOME FROM BUSINESS AT RS.4,67,118/- AS CLAIMED BY ASSESSEE AS AGAINST RS. 7,97,114/- ASSESSED BY HIM. 6. ON THE OTHER HAND, THE LD SR. DR HAS RELIED ON T HE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE LD AR OF THE ASSESSEE HAS TRIED TO CONFUSE THE ISSUE BY PROVIDIN G A CHART WHEREIN TURNOVER AS PER THE ASSESSEE AND TURNOVER AS PER TH E ASSESSING OFFICER HAD BEEN SHOWN. HOWEVER, THE FACTS REMAINS THAT THE A SSESSEE HAS DECLARED TURNOVER OF RS. 58,38,975/- WHILE FILING TH E INVALID REVISED RETURN ON 10/12/2013. THE AMOUNT OF RS. 27,87,117/-, WHICH IS CLAIMED TOWARDS THE TRANSPORT CHARGE WAS ALSO PART OF THE TUR NOVER. FURTHER THE ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 8 RECEIPT OF RS. 13,37,838/- FROM M/S ROHAN BUILDERS INDIA PVT. LTD. WAS ALSO PART OF TURNOVER OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THUS, THE TOTAL BUSINESS RECEIPTS OF THE ASSESSEE TO BE CONSIDERED TO DETERMINE THE INCOME FOR THE YEAR SHALL BE OF RS. 9 9,63,930/-. SINCE THE ASSESSEE HAS NOT DISCLOSED ANY INCOME IN HIS RETURN OF INCOME FROM THE BUSINESS FOR WHICH THE TOTAL TURNOVER WAS RS. 99,63,9 30/-. THE ASSESSEE HAS FILED INVALID REVISED RETURN WHEREIN THE TURNOV ER DECLARED WAS ONLY OF AT RS. 58,38,975/-. THE ASSESSEE HAS NOT DECLARED ANY INCOME FROM THE BUSINESS IN HIS RETURN OF INCOME. EVEN WHILE FIL ING THE INVALID REVISED RETURN, THE ASSESSEE HAS NOT COME CLEAN. HE STILL C ONCEALED THE RECEIPTS UNDER THE GARB OF VARIOUS NON-SUSTAINABLE EXPLANATI ONS. THEREFORE, IN MY CONSIDERED VIEW, THE LD. CIT(A) HAS RIGHTLY SUSTA INED THE ESTIMATE OF PROFIT @ 8% ON THE TOTAL RECEIPTS. HENCE, I CONFIRM THE ADDITION OF RS. 7,97,114/-. THIS GROUND OF ASSESSEES APPEAL STANDS DISMISSED. 8. THE 2 ND GROUND OF THE APPEAL IS AGAINST NOT ACCEPT THE CAS H BALANCE OF RS. 4,00,628/- AS ON 01/4/2010 AND THERE BY ENHANCING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH TO RS. 4.00 LACS. THE LD. CIT(A) HAS ENHANCED THE ADDITION AS MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER: ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 9 6.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WE LL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 2,50,628 HAS BEEN MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH IN HAND. THE APPELLANT HAD IN THE COURSE OF ASSESSMENT PROCEEDIN GS SUBMITTED THAT CASH BALANCE OF RS. 4,00,628 AS ON 01-04-2010 MAY B E CONSIDERED AS EXPLAINED ON ACCOUNT OF PAST INCOME. THE APPELLANT HOWEVER FAILED TO FURNISH ANY EVIDENCE WITH REGARD TO THE SOURCES OF CASH. AO HAS AFTER CONSIDERING THE EXPLANATION FILED BY THE APPELLANT TREATED THE CASH BALANCE OF RS. 2,50,628 AS THE UNEXPLAINED CASH IN HAND. 6.4 IN THE COURSE OF APPELLATE PROCEEDINGS THE APPE LLANT HAS REITERATED THE SUBMISSIONS FILED EARLIER. THE INCOME DECLARED BY T HE APPELLANT IN THE RETURN FOR THIS YEAR AND FOR THE PRECEDING YEAR WAS EXAMINED AND IT WAS FOUND THAT ONLY AN INCOME OF RS. 1,80,000 HAS B EEN DECLARED FOR THIS YEAR AND NO RETURN OF INCOME FOR THE PRECEDING YEAR WAS FOUND TO HAVE BEEN FILED. ACCORDINGLY, A SHOW CAUSE NOTICE W AS ISSUED TO THE APPELLANT AS TO WHY NOT THE WHOLE AMOUNT OF OPENING CASH BALANCE OF RS. 4,00,627.56 BE TREATED AS UNEXPLAINED AS A RETU RN DECLARING AN INCOME OF ONLY RS. 1,80,000 WAS FILED FOR THE YEAR UNDER CONSIDERATION AND NO RETURN OF INCOME WAS FILED FOR THE PRECEDING YEAR I.E. AY 2010- 11. 6.5 IN RESPONSE TO THE SHOW CAUSE NOTICE, THE APPEL LANT HAS FAILED TO FURNISH ANY EVIDENCE OR SATISFACTORY EXPLANATION WI TH REGARD TO THE SOURCES OF CASH IN HAND TILL THE DATE OF THIS ORDER . ACCORDINGLY, I TREAT THE CASH BALANCE OF RS. 4,00,000 AS UNEXPLAINED CAS H IN HAND. 9. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. THE LD AR OF THE ASSESSEE HAS SUBMITTED AS UNDER: 1. AO OBSERVED THAT AS PER THE CASH BOOKS PRODUCED BY THE ASSESSEE HE HAS TAKEN OPENING CASH BALANCE AS ON 01.04.2010 AT RS.4 ,00,627/- WHICH IS ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 10 CLAIMED TO BE THE CASH BALANCE OF HIS BUSINESS WHIC H IS CARRYING FROM THE YEAR 2000. THE AO CONSIDERING THE SAME ESTIMATED THE CAS H BALANCE AS ON 01.04.2010 AT RS.1,50,000/- AND MADE ADDITION FOR R S.2,50,628/-. 2. THE LD. CIT(A) OBSERVED THAT ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCE WITH REGARD TO THE SOURCE OF CASH AND THEREFORE HE TREAT ED THE CASH BALANCE AS ON 01.04.2010 TO THE EXTENT OF RS.4 LACS AS UNEXPLAINE D AND THUS ENHANCED THE ADDITION. 3. IT IS SUBMITTED THAT THE LOWER AUTHORITIES HAVE NOT RELIED UPON THE CASH BOOK PRODUCED BY THE ASSESSEE AND HAVE COMPUTED THE INCO ME BY APPLYING THE PROVISION OF SEC. 44AD. THEREFORE, THE ADDITION MAD E BY THE AO AND ENHANCED BY CIT(A) ON THE BASIS OF THE SAME CASH BOOK IS UNC ALLED FOR. FURTHER, WHEN INCOME IS COMPUTED U/S 44AD, IT PRESUPPOSES THAT BO OKS OF ACCOUNT ARE NOT MAINTAINED AND THEREFORE ON THE BASIS OF SUCH CASH BOOK, NO ADDITION CAN BE MADE. OTHERWISE ALSO, THE ASSESSEE HAS BEEN CARRYIN G OUT THIS BUSINESS SINCE 2000, THE AVAILABILITY OF CASH AS ON 01.04.2010 OF RS.4,00,628/- CANNOT BE SAID TO BE UNREASONABLE AND THEREFORE ALSO THE ADDITION MADE BY CIT(A) IS UNJUSTIFIED. IN VIEW OF ABOVE, THE ADDITION CONFIRM ED BY LD. CIT(A) BE DIRECTED TO BE DELETED. 10. ON THE OTHER HAND, THE LD SR. DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 11. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE A SSESSING OFFICER MADE ADDITION OF RS. 2,50,628/- AS UNEXPLAINED CAS H IN HAND OF THE ASSESSEE. THE LD. CIT(A) HAS ENHANCED THE ADDITION TO RS. 4.00 LACS AS UNEXPLAINED CASH IN HAND OF THE ASSESSEE AS ON 01/4 /2010. AFTER ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 11 HEARING BOTH SIDES, I FIND THAT THE ASSESSEE IS CAR RYING ON BUSINESS SINCE 2000, HENCE THERE MUST BE SOME OPENING CASH BALANCE WITH THE ASSESSEE. I HAVE ESTIMATED THE INCOME FOR THE YEAR BY ESTIMATING THE PROFIT RATE @ 8% OF THE TOTAL RECEIPT DURING THE YEA R. THE BOOKS OF ACCOUNT ARE NOT MAINTAINED. THE ASSESSEE WAS DOING TH E BUSINESS SINCE LONG, THEREFORE, I AM OF THE VIEW THAT THE ENHANCEME NT BY THE LD. CIT(A) WAS NOT JUSTIFIED. I SUSTAIN THE ADDITION ONLY TO THE EXTENT OF RS. 2,50,628/- AS MADE BY THE ASSESSING OFFICER. THIS GR OUND OF APPEAL IS PARTLY ALLOWED. 12. THE 3 RD GROUND OF APPEAL IS AGAINST CONFIRMING THE ADDITIO N ON ACCOUNT OF INTEREST INCOME AT RS. 2,323/- AS AGAINS T RS. 1,898/-. THE LD. CIT(A) HAS UPHELD THE ACTION OF THE ASSESSING OFFICE R BY HOLDING AS UNDER: 7.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 2,32 3 HAS BEEN MADE BY THE AO ON ACCOUNT OF INTEREST INCOME EARNED BY THE APPELLA NT WHICH WAS FOUND TO HAVE NOT BEEN DECLARED IN THE RETURN OF INCOME FILE D. THE APPELLANT HAS FAILED TO JUSTIFY THE NON DISCLOSURE OF THIS INCOME AND HA S STATED THAT IT IS A PART OF BUSINESS INCOME. 7.4 THE CONTENTION OF THE APPELLANT IS FOUND TO BE NOT CORRECT AND IS DEVOID OF ANY MERIT AS THE BUSINESS INCOME ITSELF WAS NOT DIS CLOSED IN THE RETURN OF INCOME FILED. THEREFORE, I FIND THAT AO WAS JUSTIFI ED IN MAKING THE SAID ADDITION AND ACCORDINGLY CONFIRM THE ADDITION OF RS . 2,323 ON ACCOUNT OF INTEREST INCOME FROM BANKS. ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 12 13. ALTHOUGH, THE LD AR HAS FILED WRITTEN SUBMISSION S ON THIS ISSUE. HOWEVER, AT THE TIME OF HEARING, THIS GROUND OF APPE AL WAS NOT PRESSED BY THE LD AR DUE TO SMALL AMOUNT, THEREFORE, THE SA ME IS DISMISSED AS NOT PRESSED. 14. THE 4 TH GROUND OF APPEAL IS AGAINST DISALLOWING THE CLAIM O F DEDUCTION UNDER CHAPTER VI-A OF RS. 5,000/-. THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE BY HOLDING AS UNDER: 8.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS W ELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT A DISALLOWANCE OF RS. 3,050 HAS BEEN MADE BY THE AO ON ACCOUNT OF NON FURNISHING OF EVIDENCE FOR CLAIM OF DEDUCTION U/S 80C OF THE IT ACT. THE APPEL LANT HAS MERELY REITERATED THE SUBMISSIONS WITHOUT FILING ANY EVIDE NCE IN THE COURSE OF PRESENT PROCEEDINGS TO CONTROVERT THE FINDINGS O F THE AO AND HAS FAILED TO FURNISH ANY EVIDENCE OF HAVING MADE THE I NVESTMENTS, ELIGIBLE U/S 80C OF THE IT ACT. THEREFORE, I CONFIR M THE DISALLOWANCE OF RS. 3,050 MADE BY THE AO UNDER THIS HEAD. 15. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. THE LD AR OF THE ASSESSEE HAS SUBMITTED AS UNDER: 1. AO OBSERVED THAT ASSESSEE HAS CLAIMED DEDUCTION UND ER CHAPTER-VI AT RS.32,000/- BUT HAS FURNISHED PROOF OF RS.28,950/-. HE THEREFORE, DISALLOWED THE CLAIM OF DEDUCTION FOR RS.3,050/-. 2. BEFORE THE LD. CIT(A), THE ASSESSEE EXPLAINED THAT THE ACTUAL CLAIM OF DEDUCTION UNDER CHAPTER VI-A IS RS.33,950/- COMPRIS ING OF RS.5,000/- TOWARDS EQUITY LINK SAVING SCHEME AND RS.28,950/- TOWARDS S CHOOL FEES AND LIC FOR ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 13 WHICH EVIDENCE IS ALREADY SUBMITTED TO THE AO. THE LD. CIT(A), HOWEVER, CONFIRMED THE DISALLOWANCE MADE BY THE AO FOR WANT OF EVIDENCE. 3. IT IS SUBMITTED THAT ASSESSEE HAS FURNISHED THE EVI DENCE OF CONTRIBUTION MADE TO EQUITY LINK SAVING SCHEME FOR RS.5,000/- AND THE REFORE, THE AO BE DIRECTED TO ALLOW DEDUCTION UNDER CHAPTER VI-A ON THIS AMOUN T ALSO. 16. ON THE OTHER HAND, THE LD SR. DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 17. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. SINC E THE ASSESSEE CLAIMS THAT HE HAS FURNISHED EVIDENCE OF CONTRIBUTI ON TOWARDS THE EQUITY LINK SAVING SCHEME OF RS. 5,000/-, THE ISSUE IS RES TORED TO A.O. THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION UND ER CHAPTER VI-A OF THE ACT, IF FOUND IN ORDER. THIS GROUND OF ASSESSEE S APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/11/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08 TH NOVEMBER, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI RAJESH MAHAWAR, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD WARD 2(2), ALWAR. 3. VK;DJ VK;QDR @ CIT ITA 564/JP/2016_ RAJESH MAHAWAR VS ITO 14 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 564/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR