TaxTMI 
TaxTMI 
2022 (8) TMI 357
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....e tune of Rs. 82,50,000/- between the period 09.11.2016 and 30.12.2016 and the assessee was required by the Assessing Officer (AO) to explain the same. Thereafter, after considering the submissions of the assessee in this regard, the assessment was completed at an income of Rs. 1,05,50,120/- after making addition on account of cash credits u/s 68 and 69A read with section 115BBE of the Income Tax Act, 1961 (hereinafter called 'the Act') to the tune of Rs. 77,70,000/- 2.2 Aggrieved, the assessee preferred appeal before the NFAC which was dismissed and now the assessee has approached this Tribunal challenging the dismissal of his appeal be the NFAC by raising the following grounds of appeal: 1. That the Ld. CIT(A) has erred in confirming the order of the Assessing Officer in assessing the income at Rs. 1,05,50,120/- against the returned income of Rs. 27,80,120/- and, thereby, upholding the invoking of the provision of Section 115BBE on account of the alleged cash credits u/s 68a 69A of the Income Tax Act, 1961. 2.(a) That the Ld. CIT(A) has erred in confirming the addition of Rs. 1,20,000/- on account of the amount received from Sh. Deepak Sharma and Sh. Suresh K....
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....craves leave to add, amend, or alter any of the above ground or grounds of appeal during the course of appellate proceedings. 3.0 It was contended by the Ld. Authorised Representative (AR) that the assessee has been maintaining regular books of accounts and which are subject to audit and that the Return was filed based on such audited books of account only. At the very outset, it was brought to the notice of the Bench, that though the Assessing Officer had made certain additions to the returned income on account of the amount received from certain related parties, sales had been made subsequently against the amounts so received during the very same year and thus the sales had been adjusted against the advances received from them. It was submitted that no adverse view had been drawn by the authorities below in this regard and the books of accounts had also not been rejected u/s 145(3) of the Act. 3.1 The Ld. AR submitted that regarding the addition of Rs. 1,20,000/- on account of amount received from one Sh. Deepak Sharma and Sh. Suresh Kumar added u/s 68 of the Act, the Assessing Officer has discussed this issue in Para 7 of the order and referred to cash receipts of Rs. 20,0....
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.... the Paper Book consisting of confirmed copy of account of the party concerned, mentioning PAN Number, Sworn affidavit and evidence of filing the return for the Asstt. Year 201617 and complete cash summary of L.K. Mechanical Works as his per books. 4. Sh. Baijnath Gupta Prop. Ram & Co. (Nanaji of assessee). 4,60,000/- At pages 101 to 111 of the Paper Book, consisting of confirmed copy of account of the party, mentioning PAN Number, Sworn affidavit and evidence of filing the return of Income for the year 2016-17, and complete cash summary of Ram & Co. as per his books. 3.2.1 It was further argued by the Ld. AR that this issue has been dealt by the Assessing Officer at pages 4 & 5 of the assessment order and the Assessing Officer has not doubted anything in this regard and, accordingly, it was vehemently argued that the identity, credit worthiness and genuineness of the transactions, stand proved and even in the books of accounts of the assessee, no defects have been pointed out and even the affidavits of the parties concerned, duly attested, had been furnished and the said amounts, as received, had been adjusted against the sales made to the related parties and such s....
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....nst such sales, then the addition cannot be said to be justified. It was pleaded that the whole basis of confirming the addition was on conjectures and surmises. 3.3.0 with respect to ground Nos. 4(a) & 4(b), it was submitted that the same are related to addition of Rs. 48,50,000/- deposited against housing loan in the name of the assessee and which was squared up during the year under consideration by way of "cash deposits" into the said account by the respective HUFs of self and other two brothers who had in turn deposited the cash in the Housing Loan account of the assessee from their proven sources by withdrawing the amount from their respective concerns, which were being assessed to tax. 3.3.1 It was brought to the notice of the Bench that the assessee had submitted a detailed reply which has been reproduced at page no. 7 to 9 of the assessment order and the sources of the payment have been doubted only because of the fact that the said HUFs were not the co-borrowers. It has been submitted that the three HUFs who have provided the funds are as under: Arun Garg & Sons HUF Rs. 14,00,000/- Varun Garg & Sons HUF (brother HUF) Rs. 14,50,000/- Pawan Kumar & S....
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....ition. 4.2 With regard to the sustaining of addition of Rs. 48,50,000/-, it was argued that it was "unexplained cash" in the demonetized currency and, therefore, the AO had rightly made the addition as the assessee had raised fictitious cash in the books of accounts. 5.0 In the rejoinder, the Ld. Authorized Representative submitted that the documentary evidences, as furnished, have been doubted only on suspicion and such documentary evidences as furnished were based on the basis of returns of income filed in all the cases and no defects have been pointed out by the Authorities below in respect of the withdrawals made by the respective related parties and that all such parties were regularly assessed to tax and, as such, the rejection of the bona fide explanation being only on surmises & conjectures cannot be sustained in view of the judgment of the Hon'ble Apex Court in the case of Omar Salay Mohammad Sait vs. CIT reported in 37 ITR 151. 6.0 We have heard the rival contentions and have also perused records as well as paper books filed by the assessee in support of his argument that requisite documentary evidences have been furnished. 6.1 As regards the first ground of a....
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....pening stock, purchases and sales and closing stock, declared by the assessee has not been doubted, the sales were made by the assessee out of the opening stock and purchases and the resultant closing stock has been accepted, the sales had not been disturbed either by the Assessing Officer or by the Sales Tax/VAT Department and even there was no difference in the quantum figures of the stock at the time of search on April 12, 2017, therefore, the sales made by the assessee out of the existing stock were sufficient to explain the deposit of cash (obtained from realization of the sales) in the bank account and cannot be treated as undisclosed income of the assessee." XXXX "10.13 In the present case also the cash deposited postdemonetization by the assessee was out of the cash sales which had been accepted by the Sales Tax/VAT Department and not doubted by the Assessing Officer, there was sufficient stock available with the assessee to make cash sales and there was festive season in the month of October 2016 prior to the making of the cash deposit in the bank account out of the sales. So, respectfully following the aforesaid referred to orders by the various Hon'....