TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 451
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.... Act, 1961 along with centric/specific questionnaire/query was issued by the A.O. The assessee in response to the same filed details as called for from time to time. 3.1. During the course of assessment proceedings, the A.O. noted that the assessee is involved in the business of manufacturing and wholesale dealing of footwear in the name and style of M/s. A.N. International. From the perusal of the bank account filed by the assessee, he noted that there was regular cash deposit into the bank account. On being questioned by the A.O. to explain the source of such cash deposit, the assessee explained that this cash were received from debtors from 01.04.2016 to 08.11.2016. However, the A.O. rejected the same on the ground that the last cash deposit before demonetization was made on 07.11.2016. Therefore, the claim of the assessee that he used to keep cash in hand for so long which was received from the debtors cannot be accepted. He, therefore, made addition of Rs. 39,60,000/- to the total income of the assessee. 3.2. In appeal, the Ld. CIT(A), NFAC upheld the action of the A.O. by observing as under : "4.1. Ground No. 1 and 2 relates to addition made on account of cash deposit to ....
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....quent year does not show cash deposit in such magnitude. d) The appellant has not furnished any authentic documents to explain it's source of cash deposit such as (i) identity & confirmations from debtors, (ii) cash book of current as well as last year & subsequent year to justify that such huge cash-in-hand is the feature of its cash book always, (iii) profit & loss accounts to justify its turnover in cash last year, current year and subsequent year, (iv) Balance Sheet to show the magnitude of sundry debtor as well as sundry creditors or source of granting such huge credit to sale parties, (v) details of receipts in cash and through cheque in the last year, current year and subsequent year, etc. e) It is very strange to note that an amount of cash of Rs. 15.58 lacs was deposited in first 8 months during FY 2016-17, Rs. 39.60 lacs in one month during the same FY 2016-17 and no cash deposit in FY 2017-18 by the appellant. f) The pattern of cash deposit transactions in ICICI Bank account shows substantial increase during demonetization quarter (i.e. Q3 of FY 2016-17). The details are as under:- F.Y. Quarter Total Deposit Amount Cash deposit by appellant as well as Parties....
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.... in ICICI Bank A/c, hence, addition on a/c of unexplained cash deposit is confirmed. Thus, this ground of appeal is dismissed." 4. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 5. Learned Counsel for the Assessee strongly challenged the order of the Ld. CIT(A) in confirming the addition of Rs. 39,60,000/- made by the A.O. He submitted that the assessee has filed its return of income under presumptive taxation by applying the provisions of Section 44AD of the I.T. Act, 1961 after computing 8% profit on the gross sales of Rs. 90,66,440/-. He submitted that cash deposit of Rs. 39,60,000/- made during the demonetization period represents the sale proceeds and realization of debtors. Referring to pages 35 to 48 of the PB, the Learned Counsel for the Assessee drew the attention of the Bench to the copy of cash book showing cash balance before demonetization period. He submitted that the cash deposit so made in the bank account arises out of two sources i.e., (a) cash sales made during the year and (b) an amount of Rs. 38,32,509/- received from debtors standing recoverable on 01.04.2017. Referring to the RBI Gazette Notification dated 08.11.....
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....nce with law, should be deleted and the grounds raised by the assessee should be allowed. 1 CIT vs., Patel Natverlal Chinubhai & Co. [2014] 220Taxman 168 (Gujarat). 2. DCIT vs., Sri R. Charuchandra [2017] 80 taxmann.com 182 (Karnataka HC). 3. CIT vs., Smt. Bimla Rani [2015] 230 Taxman 629 (P & H HC). 4. CIT vs., Jaora Flour and Foods (P.) Ltd., [2012] 344 ITR 294 (MP HC). 5. Vijay L. Bhawe vs., ACIT [2017] 81 taxmann.com 138 (Mumbai-Trib.). 6. Lalchand Bhagat Ambica Ram vs., CIT [1959] 37 ITR 288 (SC). 7. Shree Sanand Textile Industries Ltd., DCIT [ITA.No.995/Ahd/2014 dated 06.01.2020 ITATAhmedabad]. 8. M/s. Singhal Exim P. Ltd., vs., ITO [ITA.No.6520/Del./2018 dated 12.04.2019 ITATDelhi.]. 9. ACIT vs., Dewas Soya Ltd., Appeal No.337/IND/2012. 10. Kishore Jeram Bhai Khaniya vs., ITO [ITA.No.980, 1220/Del./2011 dated 13.05.2014 ITAT-Delhi]. 6. The Ld. D.R. on the other hand relied on the order of the A.O. and the Ld. CIT(A) 7. I have considered the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A), NFAC and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. I find....
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....but the various details furnished by the assessee and considering the fact that assessee has opted for presumptive tax under the provisions of Section 44AD, the A.O. should not have made the addition. 7.2. I find the Coordinate Bench of the Tribunal in the case of Kishore Jeram Bhai Khaniya vs., ITO (supra) while deleting the addition under section 68 of the I.T. Act, 1961 made by the A.O. on account of cash deposit has observed as under : "There is another dimension to this issue. The Assessing Officer made addition of Rs. 22.06 lacs u/s 68 of the Act, which contemplates the making of addition where any sum found credited in the books of the assessee is not proved to the satisfaction of the A.O. It is only when such a sum is not proved that the Assessing Officer proceeds to make addition u/s 68 of the Act. We are dealing with a situation in which the assessee has himself offered the amount of cash sales as his income by duly including it in his total sales. Once a particular amount is already offered for taxation, the same cannot be again considered u/s 68 of the Act. In fact, such addition has resulted into double addition." 7.3. Similarly, I find the Indore Bench of the Trib....
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....he same is deleted." 7.5. I find the Ahmedabad Bench of the Tribunal in the case of Shree Sanand Textile Industries Ltd., vs., DCIT (supra) while deleting the addition made by the A.O. under section 68 of the I.T. Act, 1961 on account of cash deposit has observed as under : "9.3. Admittedly, the amount of sale as claimed by the assessee was offered to tax by reflecting the same in the trading and profit and loss account. This fact has not been doubted by the authorities below. However, the existence of the parties was not proved by the assessee based on the documentary evidence during the proceedings. Accordingly, the learned CIT (A) treated the amount received from such parties as unexplained cash credit under section 68 of the Act. In this connection we note that the impugned amount has been taxed twice firstly the same was treated as sales and secondly the same was treated as unexplained cash credit under section 68 of the Act. Even if we assume that the action of the learned CIT (A) is correct i.e. the impugned amount is representing the cash credit as provided under section 68 of the Act. Then, the learned CIT (A) was duty-bound to reduce the same from the amount of sales a....