TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 402
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....d on 21.12.2019 by the Assessing Officer as upheld by the Ld. CIT(A) was further incorrect as wrong under the law and to the facts of the case, because the Assessing Officer and CIT(A) have altogether failed to adjudicate the reply filed by the appellant on 06.12.2019 before the Assessing Officer. 4. That the order passed as upheld by the Ld. CIT(A) was further unconstitutional against the law and to the facts of the case, because the entire turnover of purchase, which was sold subsequently, the appellant has already declared higher percentage of profit @ 22% u/s 44AD of the Income Tax Act, 1961 while filing his ITR for the A.Y. 2017-18, though under the said provisions of law, the appellant could have declared profit on the total turnover @ 8%, which has already been accepted as correct, as such no further illegal and impugned additions if any could be made in the same. 5. That the conclusion drawn for the purpose of doing further illegal and impugned additions of Rs. 1020000/- in the hands of the appellant was appears to be not supported with any cogent material either collected, confronted or ever placed upon records having any nexus to the illegal and impugned additions fur....
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.... to the Assessment Year 2017-18 on an income of Rs. 32,67,670/- against the declared income of Rs. 22,47,670/-. 12. That the Ld. CIT(A) has dismissed the appeal of the appellant in a very casual and routine manner without taking into consideration the proper facts and relevant provisions of law and to the reply filed by the appellant before the Assessing Officer and before him also during the course of appellate proceedings. 13. That the interest charged u/s 234B and initiation of penalty proceedings u/s 270A of the Act, are further illegal as against the law and to the facts of the case. 14. That the appellant assails his right to amend, alter or change any grounds of appeal at any time even during the course of hearing of this instant appeal. PRAYER:- It is, therefore, prayed: 1. That the assessment order passed on 21.12.2019, which was upheld by the Ld. CIT(A) on 01.06.2022 may please be.quashed or alternatively the illegal and impugned additions so made of Rs. 10,20,000/-, may please be deleted/quashed also 2. That the interest charged u/s 234B and penalty proceedings initiated u/s 270A of the Act, may also be waived being consequential to the illegal and impugned....
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....me during the demonetization period and concocted cash sales was booked through manipulation in the books of account and, therefore, it was found that the book results of the assessee were not reliable and the AO rejected the books of account u/s 145(3) of the Act by properly following the procedure and under the powers available to him under the relevant provisions of the Act. The ld. Sr. DR submitted that the AO was also correct and right in making the addition of 30% of the cash deposited in the bank during post demonetization period. Therefore, the addition made by the AO was rightly confirmed by the ld.CIT(A). 5. The ld. Sr. DR also drew our attention towards paras 7 to 7.5 of the first appellate order and submitted that the ld. First appellate authority, after considering the ratio of the judgements of the Hon'ble Supreme Court in the case of Roshan Di Hatti vs. CIT, 107 ITR 938 (SC); Kale Khan Mohammad Hanif vs. CIT, 50 ITR 1 (SC); Sumati Dayal vs. CIT, 214 ITR 801 (SC); Vasantibai N. Shah vs. CIT, 213 ITR 805; Sreelekha Banerjee & Ors. Vs. CIT, 49 ITR 112 (SC); and the judgement of the Hon'ble Punjan & Haryana High Court in the case of Parveen Kumar vs. CIT (2019) 110 taxm....
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.... cash sales have been booked through manipulation of books of account and for this reason, the assessee rejected the books of account of the assessee invoking the provisions of section 145(3) of the Act. Finally, the AO adjudicated the issue with a finding that the addition of 30% of cash deposit to the bank account of the assessee during post demonetization period as being manipulated will meet the ends of justice and made an addition of Rs.10,20,000/- to the returned income of the assessee. 8. The aggrieved assessee carried the matter before the ld.CIT(A) and filed the following submissions for the consideration of the ld. First appellate authority:- "1. Return of Income was filed declaring income of Rs.22,47,669/- on 30.11.2017 and the assessment was completed by making addition of Rs.10,20,000/- taking the 30% of cash deposit of Rs.34,00,000/- made during demonetization period during the F.Y 2016-17 relevant to AY2017-18 and creating a demand of Rs.4,29,769/-. Penalty under section 270A of the Act was initiated. 2. That the appellant has declared Income from business on the presumptive basis under section44AD of the Act. 3. During the year under relevant, appellant has b....
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....ned. Further, another mistake on the part of AO is that he never asked the books of accounts and rejection without pointing out any defect is another example of arbitrariness on the part of the AO. 5. That the Ld.AO has averted that the sales to Rs. 1,29,79,542/- but it is not comprehensible that the same amount of sales has been declared by the undersigned in his return so estimating the same on the part of the Ld.AO shows that he is not fully conversant with the facts of the case. 6. That the appellant has opted to file return u/s. 44AD is not obliged to explain individual entry of cash deposit in bank unless the AO proves that the said cash deposit has no nexus with gross receipts. 7. That the Cash in hand cannot be ascribed to concocted without bringing evidence on record, wren assessee had furnished the cogent material proving the sales, creditors, debtors, bank staiements and the AO had not made any further enquiry. 8. That the Ld.AO has also failed to mention the provision under which addition was made and initiated the penalty under section 270A of the Act which is for under reporting of income. Furthermore, Your kind attention is also drawn to the infra verdicts ....
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....g the appeal of the revenue the Court held that, all relevant particular such as identity details relating to depositors, their PAN numbers, addresses, and particulars relating to cheques paid were furnished by the assessee, however the AO has not carried out any enquiries under law from concerned banks, addition was held to be not justified. In view of the above mentioned facts, it conclusively proved that the Ld.AO has passed the order without examining the facts, on conjectures and surmises and in haste manner which is legally not correct and hence the addition made by the AO deserves to be deleted. We are hereby submitting the copy of VAT Returns, comparative chart of cash sales made during different financial years, GP and Ratio Chart, Bank Statements and our submission humbly requestinq that assesee has file its return of income u/s 44AD of the income tax act, 1961 and has considered all the cash deposits as sales while computing the turnover and has paid the tax due." 9. But, the assessee remained empty handed as the ld.CIT(A) dismissed the appeal with the following observations and findings:- "7. I have considered the facts and circumstances of the case, submissions ....
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....ion and the manner in which the sums were found credited in the books of accounts maintained by the assessee has been duly taken into consideration by the authorities below. The transactions though apparent were held to be not real one." 7.3 In the case of Vasantibai N. Shah Vs CIT 213 ITR 805 and Sreelekha Banerjee & lrs. Vs CIT(SC) 49 ITR 112 - Hon'ble Supreme Court held that where any sum is found credited in the books of the assessee for any previous year it may be charged to Income Tax as the income of the assessee for that previous year if the explanation offered by assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory.In the case of K.R.S. Suresh Vs ITO, ITAT Chennai, in ITA Nos. 1458 & 1459 (Mds) of 2012 / [2013] 37 taxman.com 259 (Chennai Trib), confirmed the additions made by the Assessing Officer towards unexplained cash credits as they were not proved with sources for such deposits by the assessees. 7.4 In ITA No. 453 of 2017 / [2019] 110 taxmann.com 256 (Punjab & Haryana) in the case of Parveen Kumar Vs. Commissioner of Income-tax, Ludhiana it was held that the evidence was not there to explain the cash deposits ....
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....btors for which complete details were filed before the AO as well as the ld. CIT(A), but, in the present case, it is not the argument of the assessee that the amount deposited to its bank account was partly realization from debtors. Regarding the explanation of the assessee that the amount deposited to bank account is proceeds of cash sales during November 2016 is concerned, the AO has called for the pattern of cash sales by the assessee for the relevant FY 2016-17 and compared the same with the immediately preceding two FYs, i.e., 2014-15 and 2015-16 and, thereafter, in para 6, concluded that the amount and percentage of cash sales during November, 2016 is not matching with the pattern and percentage of cash sales during the immediately preceding two financial periods especially during the month of November, 2015. Therefore, the facts and circumstances of the present case are quite dissimilar and distinguishable from the facts of the case of Shri Atish Singla (supra). 12. In the case of Shri Lateef Abdul Mohd. Vs. ITO (supra), the issue of cash deposit to the bank account of the assessee during post demonetization period was decided in favour of the assessee relying on the judgem....