TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 151
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.... substantive ground challenges correctness of both the lower authorities' action treating his bank deposits of Rs. 1,57,65,000/- as unexplained cash credits during the course of assessment as affirmed in the lower appellate proceedings. The CIT(A)'s detailed discussion to this effect reads as under: "4.1 Addition of an amount of Rs. 1,57,65,000/- as unexplained cash credit The appellant firm engages in the business of being a distributor of consumer goods, in the business of sale of potatoes and claims to be a trader of fabrics sarees. During the previous year relevant to the assessment year, a survey operation was carried out in the business premises of the appellant on 18th of January 2012. During the survey it was noticed that even....
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....for in the books of accounts." During the course of assessment proceedings also the appellant was unable to produce any evidence in the nature of sales bills or challans to prove the claim of sales. Therefore, the Assessing Officer concluded that the appellant was only an entry operator in saree market and has given entry of purchase of saree only and hence, there was no corresponding sales bills of sarees and no physical stock of sarees as such. During the course of assessment proceedings, the AO further noted, that an, amount of Rs. 75,65,000 was deposited in cash in the Account Number 151502000000431 maintained with Indian Overseas Bank during the period from 21st of November 2011 to 31st of March 2012. All this amount has been subsequen....
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.... did not accept the explanation that the source of the cash deposited was in fact the alleged saree sale made in cash and treated the amount of cash deposits as unexplained. He proceeded to add the said unexplained cash credit of an amount of Rs. 1,57,65,000 under section 68 of the IT Act. During the appellate proceedings, the appellant reiterated its submissions made before the AO. It is further contended that as the survey team noted the bills of purchases, the purchases have been proved and therefore, the only way that the stocks could vanish at the time of survey was by way of sales. It is also contended as the Assessing Officer has not rejected the books of account, the contents of the books cannot be disbelieved in toto. The appellant....
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....s not come up with any proof as to who were the parties to whom such goods have been sent for approval. No proof with respect to movement register evidencing movement of goods, receipt acknowledgement or lorry/auto receipts evidencing such movement of goods to the purchase parties have ever been provided to the survey team, to the authorities below or even before me. The contention that purchases have been not controverted and therefore, sales must have taken place also is irrelevant to the issue under consideration because for addition under section 68 the onus is on the appellant to prove the identity of the creditor rather than to show by long-drawn conclusion as to how a transaction could have taken place. Thus, the appellant abysmally ....
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....d 18.01.2012, Profit & Loss A/c from 01.04.11 to 18.01.12, (upto survey date), inventory of saree purchases (RA-2), copy of VAT return, reply letter dated 16.02.2015, letter dated 12.01.2018 with sale bills, tax audit report and audited accounts up to 31.03.2012, Assessing Officer's ordersheet and another letter dated 22.09.2012 addressed him that the assessee had stopped business activities; respectively. He quotes accounting standard AS-9 regarding revenue recognition in support of the assessee's contention that it could not have recognized the challan amounts as income pending approval of the concerned customer parties. Learned counsel submits in light of the following detailed documents and assessee's explanation that both the learned l....
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....stock nor did he issue section 131 or 133(6) process on the assessee's supplier (supra) to this effect. His assessment order nowhere holds that either of the two components i.e. opening stock and purchases are not correct. The very factual position has continued in the CIT(A)'s above extracted lower appellate discussion as well. We hold in this factual backdrop that the assessee duly proved its saree stock during the relevant previous year amounting to Rs. 1,36,77,207/- as per its books of accounts including fabric stock of Rs. 1,03,87,762/-. 6. It further transpires that the survey authorities had sought to physically verify the assessee's stock of sarees on 18.01.2012. They could not find any such stock item at its premises. The only in....