IN THE ITAT, KOLKATA BENCH

A.T. VARKEY, JM & M.BALAGANESH, AM_

Bijoy Shribastab & Anr. v. ITO

ITA No. 605/Kol/2013

23 May, 2018

Decision:    In assessee’s favour.

Income for undisclosed sources & Validity of Addition u/s 69 as Unexplained cash deposit

Assessee was a transport operator and did not maintain books of account of his business activities.

 Income from transport business was offered to tax by assessee under presumptive tax method prescribed under section 44AE.

 Assessee produced bank statements of 6 bank accounts held by him.

A current account in the name of M/s I was maintained and the said bank account was opened with intention to diversify the business of assessee.

 Assessee before AO did not disclose this bank account.

AO treated the one current account as undisclosed bank account of assessee and proceeded to arrive at the peak credit balance thereon as unexplained money.

Assessee contended that he acquired trucks out of finance from Financing institution to whom repayments were made by assessee in cash out of the business proceeds of transport business.

Assessee had offered income from transport business under section 44AE and duly explained that the deposits in all the bank accounts represents only business proceeds which were received in cash and deposited in the bank accounts.

Since the income of assessee was offered under section 44AE, there was no need to make addition towards cash deposits when the same were duly explained to be business proceeds.

Directions were given to AO to delete the addition made towards unexplained cash deposits in the bank accounts made on peak credit theory.

 Moreover, the repayment of loan to financial institution was made only in respect of trucks used in the transport business which were purchased out of loan from the said company.

Held – In favour of Assessee