Rohit Kharbanda, New Delhi vs Department Of Income Tax

ITO, Vs. Rohit Kharbanda, Ward 29(3), Prop. M/s Satguru Electricals, New Delhi. 17-A, Ground Floor, Kamal Nagar, New Delhi. PAN: AQRPK3666H

(Appellant) (Respondent)

Assessee By : Shri Rohit Kharbanda, Assessee Department By : Shri Vikram Sahay, Sr. DR

Date of Hearing : 12.03.2015 Date of Pronouncement : 12 .03.2015

ORDER PER R.S. SYAL, AM:

This appeal by the Revenue arises out of the order passed by the

CIT(A) on 29.2.2012 in relation to the assessment year 2008-09. ITA No.1904/Del/2013

2. The only issue raised in this appeal is against the deletion of

addition of Rs.13,80,515/- out of total addition of Rs.15,30,515/- made

by the AO on account of transactions recorded in the undisclosed bank

account.

3. Briefly stated, the facts of the case are that the AO got information

about the assessee depositing cash to the tune of Rs.14,84,000/- in his

undisclosed bank account maintained with Canara Bank , Shakti Nagar,

Delhi. A sum of Rs.46,415/- was also credited on account of other

clearing/interest. A copy of the bank statement was handed over to the

assessee for tendering explanation. The AO observed that the assessee

had shown gross receipts of Rs.4,10,000/- and, after claiming expenses

of Rs.2,33,800/-, net profit of Rs.1,76,200/- was declared in the return of

income, subject to deduction u/s 80C. On an analysis of the bank

statement, it was noticed that there were no withdrawals towards

business purpose. The AO, therefore, refused to accept the assessee's

contention that the cash and other deposits in the bank were from

declared business activities. It was also observed that the gross receipts

2 ITA No.1904/Del/2013

shown by the assessee at Rs.4,10,000/- did not justify total deposit of

Rs.15.30 lac in the bank account. He, therefore, made an addition for

the said sum of Rs.15,30,515/-. The ld. CIT(A) reduced the addition to

Rs.1,50,000/- by treating the amount deposited in the bank as part of

undisclosed business activity. That is how the Revenue has come up in

appeal before us against the deletion of addition to the tune of

Rs.13,80,515/-.

4. After considering the rival submissions and perusing the relevant

material on record, it is observed from the impugned order that some of

the payments made out of the said bank were to various parties like M/s

Goyal Cables, M/s Marine Impacts, M/s M.S. Plastic, M/s R.K. Trading

and M/s Ambey Enterprises, etc. Total of payments to such parties

amounts to Rs.11,27,589/-. These facts abundantly show that the

assessee utilized this bank account for the recording its business

transactions but outside the regular books of account. Since there are

both deposits and withdrawals, the addition cannot be made for the total

amounts deposited in the bank by completely ignoring the withdrawals.

3 ITA No.1904/Del/2013

In our considered opinion, the ld. CIT(A) was justified in treating the

entire deposits of Rs.15.30 lac in the assessee's bank account as part of

the undisclosed business activity and thereafter applying profit rate of

10% for sustaining addition to the tune of Rs.1,50,000/-. We, therefore,

uphold the view taken by the ld.CIT(A) on this issue.

5. In the result, the appeal is dismissed.

The order pronounced in the open court on 12.03.2015.

Sd/- Sd/-

[A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated, 12th March, 2015. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT

AR, ITAT, NEW DELHI.

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