TaxTMI 
TaxTMI 
2021 (11) TMI 700
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....foresaid addition on his sweet will without due application of mind even if not considering the pick credit of the bank accounts while determine unexplained cash deposits. b) For that the AO erred by invoking section 68 of the IT Act by taking figure from the bank account where as the bank accounts are not treated as books of account, thereby invoking section 68 is bad in law. c) For that in absence of cash book, the AO is erred by invoking section 68 of the I.T. Act by determining unexplained cash deposit, where as the cash deposits are very well explained from the sale of agricultural products being deposited in the bank account. 2. Addition of Rs. 1,15,028/-. For that the AO has failed to taking into c....
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....9;ble Gujarat High Court in the case of CIT (Exceptions) vs. Shree Nirman Foundation Charitable Trust in R/Tax Appeal No. 1335 of 2018 order dated 30.7.2019 in paras 16 & 17 of the said judgment held as under: "16. There is one another valid reason for us to say that ordinarily the matter should not be remitted by the Appellate Tribunal to the Ld. CIT(A) if the Appellate Tribunal is in a position to decide the appeal on its own merits having regard to the evidence on record. Such remand orders lead to unnecessary delays and cause prejudice to the revenue. The Supreme Court in the case of Ashwinkumar K Patel vs. Upendra J. Patel, reported in (1999) 3 SCC 161, in context with an order of remand passed by the High Court under order 41....
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.... 7. At the outset, Ld. A.R. of the assessee submitted that the Assessing Officer has invoked wrong section i.e. section 68, which is not attracted in the present case. Since the provisions of section 68 of the Act applied in this case is no more res integra, therefore, on technical ground, the appeal has to be allowed. 8. Even otherwise, on merits, Ld. A.R. of the assessee submitted that the AO called upon the assessee to substantiate the source of deposits of the alleged amount of Rs. 31,41,900/- and the assessee has submitted the confirmation regarding selling of paddy to M/s. Rameswar Agro Industries Pvt. Ltd., Nayapali, Bhubaneswar amounting to Rs. 24,55,250/- but the AO did not accept the contention of the assessee. Ld. A.R. of the ....
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....ptions. Ld. A.R. submitted that the assessee had furnished the evidence of sale of paddy at Rs. 24,55,250/- supported with confirmation certificate alongwith ledger A/c of M/s. Rameswar Agro Industries Pvt. Ltd., as a source of deposits in the bank accounts against the alleged cash deposits of Rs. 31,41,900/- after due adjustment of the same alongwith net agricultural income i.e. Rs. 31,41,900 - Rs. 24,55,250 + Rs. 1,85,000/-) = Rs. 5,01,650/-. He, therefore, submitted that the addition of Rs. 24,55,250/- made by the AO and confirmed by the Ld. CIT(A) is illegal and non-application of mind. 9. Ld. A.R. further submitted that in this case section 68 of the Act is not attracted at all. He relied on the following judicial pronouncements: ....
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....its in the bank are out of sale proceeds of paddy to M/s. Rameswar Agro Industries Pvt. Ltd., and in support of this, the assessee has furnished confirmation letter and ledger account of M/s. Rameswar Agro Industries Pvt. Ltd., which is not accepted by the AO. Section 68 of the I.T. Act is as follows: "Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." 13. Section 68 of the Act is attracted (a) when the assessee fai....
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....lish that the impugned amount was actually sale proceeds of paddy, which was purchased from open market/farmers and sold the same without maintaining any books of account to M/s. Rameswar Agro Industries Pvt. Ltd. Even as a man of ordinary prudent, one cannot disagree with the contention of the assessee that even if he is a director in the purchase company i.e. M/s. Rameswar Agro Industries Pvt. Ltd., he cannot be refrained from making sale of paddy to the company in which he is a director. However, I am cautious about the provisions of section 40A(2) & (3) of the Act, wherein, the department has right to examine the expenses and payments made to related parties by the related parties but it is not the allegation of the AO in the present ca....