Case Law Details
PCIT Vs Shitalben Saurabh Vora (Gujarat High Court)
The issue in the present case relates whether the amount deposited by the assessee in the form of cash/cheques represents the income of the assessee. Admittedly, there was huge deposit of cash/cheques in the bank account of the assessee. But on perusal of the bank statement, it is revealed that there were simultaneously withdrawals from the bank account leaving the negligible balance in the bank account of the assessee.
To our mind, the assessee has discharged her burden by furnishing the details stated above that she is engaged in the business activity and the transactions reflected in the bank statements are in connection with such business. As such, the onus shifted on the Revenue to negate the contentions of the assessee based on the documentary evidence. Therefore, the AO was to exercise the powers given under the statute to find out the veracity of the contentions of the assessee. The AO could have deputed the inspectors of the income tax to conduct the enquiries at the site of the parties fumished by the assessee. But he has not done so. Furthermore, the assessee cannot be penalized on account of non-response from the sales tax department.
We further note that, the Revenue has not brought anything on record suggesting that the assessee had so much of the income as computed by the AO. As such the AO was under the obligation to bring on record to demonstrate that the assessee has made some investment or incurred some expenses out of such income. But there is no such information available with the Revenue. Indeed, the assessee has certainly has violated the provisions of law by not maintaining the books of accounts, furnishing income tax return, providing sufficient details but that does not lead to reach the conclusion that the amount deposited in the bank represents the undisclosed income of the assessee. As such, the deposits in the bank cannot be treated as income on standalone basis without considering the withdrawal. Thus in the absence of any information demonstrating that the withdrawal from the bank has been utilized by the assessee either in the form of some investment or the same has been incurred as an expense, the deposits cannot be treated as income in the given facts and circumstances. Thus, in our considered view in such a situation the only option available to compute the income on some reasonable estimate.
We are also conscious to the fact that there is no standard jacket formula to work out the income of the assesse on estimated basis. One has to apply some guesswork based on some scientific method. In this regard we note that the assesses has made reference to certain orders of the ITAT where the income has been estimated with respect to the assessee engaged in the similar line of activities.
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