INCOME TAX ACT, 1961

Section 143(3)

Assessment - Addition to income - Part of cash deposits in bank account accepted as turnover from business on presumptive basis under section 44AD and remaining amount treated as unexplained investments under section 69 -

Assessee had not disclosed her savings bank account maintained with Bank of India. When the case had been taken up for reassessment, assessee came out with explanation that cash deposits found in her bank account were out of contract receipts which were not disclosed to income-tax purpose, however, assessee admitted before AO that net profit could be estimated by applying provisions of section 44AD. AO accepted explanation furnished by assessee in part and accordingly divided cash deposits found in her bank account into two parts, i.e., one from unexplained investments and other from out of business receipts. In so far as unexplained investments, AO arrived at peak credit on a particular date and made addition under section 69 as unexplained investments. Balance amount of cash deposits was accepted as business receipts and AO estimated 8% net profit by applying presumptive profit under section 44AD. Held: AO accepted part of cash deposits as out of her business receipts and part of cash deposits as her unexplained investments, without bringing on record any cogent reasons to justify different view taken on cash deposits found in her bank account during the same financial year. Therefore, AO was directed to treat the total cash deposits found in her bank account maintained with Bank of India, receipts from her civil contract business and estimate 8% net profit on total receipts as per section 44AD.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10 to 2011-12

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