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Assessee's Bank statement held not to be books of a/c, ITAT
Assessee's Bank statement held not to be books of a/c, ITAT
Assessee ran business of construction. It filed return of declaring total income which included remuneration & business profit u/s 44AD. AO treated cash deposits as unexplained cash credits. Assessee could not explain them. CIT(A) appeal was dismissed. On appeal, ITAT held, assessee estimates income & hence, there is no need to maintain books of a/c. It fails in first condit'n itself. Bank statement is not books of a/c. CIT(A) held Incorrectly.
Facts in brief:
1. Assessee an individual, engaged in the business of civil construction and also partners in the M/s BVM Constructions filed his return of income declaring total income of Rs. 4,83,600, which includes remuneration of Rs. 3,00,000 and business profit of Rs. 3,01,920 declared u/s 44AD.
2. AO noticed cash deposit of Rs. 31,04,179 into the bank M/s Karur Vysya Bank, which was treated as unexplained cash credit.
3. The assessee was summoned u/s 131 and sworn statement was recorded on 28/12/2011.
4. The assessee was not able to explain the above cash credit and agreed to submit the same seeking more time. The assessment was completed u/s 143(3) on 31/12/2011.
5. On appeal, CIT(A) has dismissed the appeal.
On appeal, ITAT held as under:
6. In the present, case assessee estimates the income and hence, there is no need to maintain books of account. It fails in the first condition itself. The bank statement is not the books of account. Not necessarily the gross receipts alone should be credited in the bank passbook, in the business, they also get advances for future contracts and assessee gets the benefit of doubt because of the small scale business and estimation of profit u/s 44AD.
7. In view of the above observations, we set aside the order of CIT(A) and allow the appeal of assessee.
8. In the result, appeal of assessee is allowed.
