PER Dr. B.R.R. KUMAR A.M. This appeal has been filed by the Assessee against the order of the Ld. CIT(A)- 2, Ludhiana dt. 01/03/2016 on the following grounds:

1. That the order dated 01/03/2016 has been passed by the Learned Commissioner of Income Tax (Appeals)-II, Ludhiana without giving any notice and without giving any opportunity to the appellant. Therefore, order passed by the Learned Commissioner of Income Tax (Appeals)-II, Ludhiana is illegal, unwarranted, uncalled for and against the Law and Justice.

2. That the Learned Commissioner of Income Tax (Appeals)-II, Ludhiana has erred in sustaining the addition of Rs. 28,50,000/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 on account of Unexplained Credits in Bank account of the appellant without any reasons and without mentioned any reasons in her order. Therefore, addition of Rs. 28,50,000/- made by the Learned Assessing Officer and sustained by the Learned Commissioner of Income Tax (Appeals)-II, Ludhiana is illegal, unwarranted, uncalled for and may be deleted.

3. That the Learned Commissioner of Income Tax (Appeals)-II, Ludhiana has erred in sustaining the addition of Rs. 28,50,000/- made by the Learned Assessing Officer u/s 68 of the Income Tax Act, 1961 on account of Unexplained Credits in Bank account of the appellant without looking into the facts of the case and remand report called during the course of appellate proceedings in which the Learned Assessing Officer admits "That the assessees contention seems reasonable that some of the cash deposits in bank account were made after cash withdrawal from the same bank account. Therefore, addition of Rs. 28,50,000/- made by the Learned Assessing Officer and sustained by the Ld. CIT(A), Ludhiana is illegal, unwarranted, uncalled for and may be deleted.

2. Brief facts are that as per AIR information was available, the AO observed that the appellant and her husband Sh. Sukhwinder Singh had deposited Rs. 28,50,000/- in cash with Punjab & Sind Bank, New Janta Nagar, Ludhiana. In preliminary enquiry was made by the AO and after considering the reply the AO observed that the appellant had joint account with her husband Sh. Sukhwinder Kaur, therefore, the proceedings of the appellants husband Sh. Sukhwinder Singh was filed and further proceedings u/s 148 of the was started in the case of Smt. Satwant Kaur, the appellant. Subsquently, notice u/s 148 of the was issued after recording reasons. In response to notice u/s 148 of the the appellant filed its return of income on 24.03.2014 declaring income of Rs. 1,68,600/-. In response to the detailed questionnaire issued from the AO the appellant contended that the appellant was doing retail business and filed her return of income u/s 44AF of the i.e. declaring income @5% of the gross receipts and was not maintaining books of account. Further, the AO issued show cause in which the AO asked to verify the cash deposits of Rs. 28,50,000/- which was deposited in the joint account No. SB/6945 with Punjab & Sind Bank in the name of Smt. Satwant Kaur and Sh. Sukhwinder Kaur. The AO also asked to substantiate these deposits alongwith documentary/corroborative evidence, failing which these deposits in your saving bank account may be treated as unexplained deposits from undisclosed sources and added to the taxable income for the year under consideration. In response to show cause the appellant merely filed the cash flow statement and contended that she was doing retail business and cash deposited by her were out of cash flow chart furnished by her. The AO was of view that the appellant had completely failed to explain the source of cash deposits. Therefore, the disallowance of Rs. 28,50,000/- was made u/s 68 of the on account of unexplained cash deposits.

3. The AO placed the reliance of the following judgements:- Jaspal Singh Vs. CIT, Jalandhar [P&H High Court] CIT vs Durga Prasad More 82 ITR 540 [Supreme Court] Sumati Dayal vs CIT 214 ITR 801 [Supreme Court] Sreelekha Banerjee and others vs CIT (SC) 48 ITR 112

4. The Ld. CIT(A) confirmed the addition holding that it is not believable that the entire sale purchase have been made in cash. He held that the assessee has not maintained books of accounts with regard to these so called business transactions. Therefore, it was impossible for the Assessing Officer to make further headway for further investigation. The cash deposits found credited in the bank accounts can also not be linked with any business transaction. In a nut shell, the Ld. CIT(A) held that the nature of cash credits could not be fully explained. He held that the perusal of entries in bank account shows that there is no regular movement /transaction of purchase /sale. The Ld. CIT(A) further held that there were regular withdrawal against few of deposits only, therefore the deposits in cash cannot be attributed to cash withdrawl from time to time.

5. Before us the Ld. AR reiterated that the assessee was doing retail business and filed return of income under section 44AF of the Act, declaring income at 5% of the gross receipt and there was no need to maintain books of accounts. He further argued that a remand report has been obtained but the Ld. CIT(A) has failed to take cognizance of the remand report received wherein the Assessing Officer held that the assessees contention of withdrawal and deposits in the same bank accounts seems reasonable, thus grossly ignoring the business affairs of the assessee .

6. The Ld. DR strongly supported the arguments of the Assessing Officer and the Ld. CIT(A)

7. We have gone through the material placed before us. The assessee has shown 5% profit under section 44AF, and in the business of trading of cloths and shawls. The Ld. CIT(A) has completely ignored the remand report and to give due benefit to the withdrawals shown while deciding the addition. Hence we remand the matter back to the file of the Assessing Officer to estimate the profit of the assessee on a reasonable basis after giving benefit of debit entries in the bank account of the assessee.

8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court. Sd/- Sd/- (SANJAY GARG) (B.R.R.KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 29/11/2017 AG Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR