COMMISSIONER OF INCOME TAX Vs. SURINDER PAL ANAND

JUDGEMENT

(1.) This appeal has been filed by the revenue under Section 260A of the Income-tax Act, 1961 (in short, "the Act") against the order of the Income-tax Appellate Tribunal (ITAT) dated 29-5-2009 (Annexure A-3) for assessment year 2005-06 proposing the following substantial question of law:

(2.) The assessee filed its return of income on 16-11-2005 declaring an income of Rs. 1,40,120. The said return had been filed showing the business income of Rs. 1,60,120 under Section 44AD of the Act. The Assessing Officer did not accept the return and made an addition of Rs. 14,95,300 in respect of the cash deposited in the bank account during the year. On appeal, the Commissioner of Income-tax (Appeals) accepted the appeal of the assessee vide order dated 28-1-2009 (Annexure A-2) holding that the assessee was not required to maintain regular books of account as the return had been filed under Section 44AD of the Act as the turnover was below Rs. 40 lakhs. Unless the turnover was disputed, the addition made by the Assessing Officer was not justified. It was also recorded that since the cash deposits in the bank statement were lower than the business receipts shown by the assessee and in the bank statement there were withdrawals as well as deposits, the addition was unjustified. The relevant observations of the Commissioner of Income-tax (Appeals) are as under:

(3.) On further appeal, the ITAT upheld the order of the Commissioner of Income-tax (Appeals).