Harmeet Singh Sablok, Mumbai vs Assessee

The present appeal has been preferred by the assessee against the order dated 01.11.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10.

2. The assessee, through its grounds of appeal, has agitated the addition of Rs.18,23,034/- made by the Assessing Officer (hereinafter referred to as the AO) under section 69 of the Income Tax Act.

The brief facts of the case are that the AO got AIR information to the effect that the assessee had made cash deposits of Rs.1551600/- in Standard Chartered Bank on various dates. The assessee was show-caused by the AO to submit the details in this respect. The AO also called for details of the bank 2 ITA No.7580/M/2013 Mr. Harmeet Singh Sablok

account from the concerned bank also. After perusal of the bank statement, the AO observed that the assessee had deposited Rs.18,23,034/- in his bank account in cash during the period 01.04.2008 to 31.03.2009. The AO observed that the assessee had disclosed his three bank accounts in other banks, but the assessee had not disclosed the deposits in the Standard Chartered Bank. Even the assessee and his brother admitted before the AO that the transactions/deposits in the Standard Chartered Bank were not disclosed to the Department. The assessee submitted before the AO that he was carrying on the business of selling of auto spare parts and that the total deposits represent business receipts in course of trading in auto spare parts etc. He requested the AO to assess the income of the assessee as per the provision of the section 44AF of the Act and to estimate the income of the assessee on presumption basis at the rate of 5% on turnover of Rs.20,51,248/- which worked out at Rs.1,02,562/-. He further submitted that the assessee had already returned the income of Rs.2,55,633/- which was on higher side. However, the AO did not accept the contention of the assessee and he treated the amount of deposit of Rs.18,23,034/- in the Standard Chartered Bank as undisclosed investment of the assessee within the meaning of section 69 of the Act.

3. The Ld. CIT(A) confirmed the addition made by the AO. The assessee has, thus, come in appeal before us.

4. We have heard the rival contentions and have also gone through the records. Admittedly, the assessee is not maintaining any books of account. The assessee has explained the nature of source of income to the AO that he is a small time trader in the business of selling of auto spare parts. He has already returned the income of Rs.2,55,633/- from the said business. The assessee has disclosed his three accounts but the account with Standard Chartered Bank had not been disclosed. After considering the overall facts and 3 ITA No.7580/M/2013 Mr. Harmeet Singh Sablok

circumstances of the case and considering the nature of business of the assessee being a small time trader in sale of auto spare parts, the transactions relating to which are generally depending upon cash transactions basis, in our view, the entire deposit made in Standard Chartered Bank cannot be added as unexplained investment. The said deposits, in our view, can be related to the business transactions of the assessee and the reasonable income out of the total deposits was required to be assessed not the entire deposits at all. Hence, considering the overall facts and circumstances of the case, the additions in this respect are restricted to 25% of the total deposits of Rs.18,23,034/- in the Standard Chartered Bank. Orders accordingly.

5. In the result, the appeal of the assessee is allowed in part.

Order pronounced in the open court on 30.06.2015.

Sd/- Sd/- (G.S. Pannu) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 30.06.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.