TaxTMI 
TaxTMI 
2022 (12) TMI 750
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....see does not main day to day stock register as such the same could not been subject to the audit before auditor. Any stock register whatsoever was not furnished during the course of assessment proceedings to verify the quantitative sale made during the year whether the item shown by the assessee as sold was actually in stock of the assessee or not and quantity and value of the sale shown remains unverified. 3. The ld. CIT(A) has erred in law and on facts by ignoring the vital fact. 2.1 Brief facts of the case are that the assessee e-filed his return of income for the assessment year 2017-18 on 26-10-2017 declaring an income of Rs.47,52,660/- .The case of the assessee was taken up for ''complete scrutiny'' u/s 143(3) of the Act on the basis of CASS and statutory notice u/s 143(2) of the Act dated 21-09- 2018 was issued through ITBA and duly served upon the assessee. Information u/s 142(1) of the Act was called for vide questionnaire through ITBA. In compliance thereof, the assessee submitted details/information through e-proceedings which were examined by the AO and the AO thus noted that the assessee has declared income from business and other sources i.e. to say that t....
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....Visakhapatnam in the case of Asst. Commissioner of Income Tax, Central Circle-1 Visakhapatnam versus M/s Hirapanna Jewellers and (vice-versa)) (Copy at Case Law PB Page No. 181-184) held that:- Addition u/s 68 r.w.s 115BBE - Assessee had deposited the sum in high denominations of specified bank notes (SBNS) post demonetization CIT-A deleted the addition HELD THAT:- The assessee produced the newspaper clippings of The Hindu, The Tribune and demonstrated that there was huge rush of buying the jewellery in the cities consequent to declaration of demonetization of 1000 and Rs. 500 notes on 08.11.2016. As cash receipts represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to effect the sales and we do not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of Hon'ble Delhi High Court in the case of Kailash Jewellery House [2010 (4) TMI 1070 Delhi High Court] and Vishal Expo....
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....cy was found therein and the fact remains that the A.O. has accepted the cash sales as he accepted the sales, declared purchases and declared opening & closing stock and declared profits as well. The amount of cash sales is being reflected in its trading and profit and loss account. Thus the contention of the appellant that assessing the said cash sales as unexplained cash credit u/s 68 means that the impugned sales had been taxed twice, firstly the same was treated as sales and secondly the same was treated as unexplained cash credit/money under section 68 of the Act appears to be correct and therefore this would tantamount to double taxation of income, which is impermissible in law. Accordingly, the action of the AO in holding that the appellant could not substantiate the increase in sales with documentary evidences is not based on correct appreciation of the facts. Therefore, I find that the A.O. was not justified in making an addition of Rs.2,90,93,500/- under section 68 of the Act and consequently the aforesaid addition is directed to be deleted. The Ground of Appeal no. 2 & 4 are treated as allowed.'' 2.3 During the course of hearing, the ld. DR relied on the order of the ....
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....up of customers in a particular month, festivals & weddings etc. and it may happen that there may be no cash sales in a particular day(s), month(s) in the preceding year(s) and sales may be in the same day(s), month(s) in subsequent year(s). Thus the authenticity of making the cash deposits out of such cash sales cannot be disregarded and rejected merely on account of variation or deviation of cash sales, cash deposits of earlier year or the ratio of cash sales in the current period with that of an earlier period. The Hon'ble Delhi Tribunal in the case of AGSONS GLOBAL P LTDvs. ACIT (Appeal Nos. 3741 to 3746/Del/2019) have held that the addition being made on the sole ground of deviation in ratio of cash sales and cash deposits during the demonetization period with that of earlier period, is not proper and lawful. 1.3 It is submitted that demonetization was announced in the evening of 8th November, 2016 viz. Indian Currencies of the denomination of Rs. 500 and of Rs. 1000 were withdrawn vide the Hon'ble Prime Minister announcement through television channels effective after midnight i.e. from 9" November, 2016 and vide Gazette Notification 2653 dated 8th N....
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....d bank notes shall cease to be liabilities of the Reserve Bank under section 34 and shall cease to have the guarantee of the Central Government under sub-section (1) of section 26 of the said Act from the appointed date, i.e. 31st December, 2016. It is submitted that various persons after hearing the news of demonetization on television channels flooded to the shops of jewellers for the purpose of buying jewellery and bullions and dispensing with such SBN's. There was certain euphoria immediately after the announcement as the people having sums of money rushed to the jewellers to buy gold and other precious items. During such period gold worth crores of rupees was sold in few hours across the country and the jewellers have to do their business until midnight. This issue was also widely circulated in print media. Similarly, the comparative sales of other products across the country in various business segments also increased during such period. The effect of the same was that the sale figures of the demonetization period of the jewellery businesses was comparatively more than that of previous years. In case of assessee also the sales figures of November, 2016 increased ....
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....en taxed. It was because the sales receipt had already been shown in the books of accounts as income at the time of sale only and once the purchases had been accepted then the corresponding sales could not be rejected. In support of the above, reliance is placed on the following few decisions: CIT v. Vishal Exports Overseas Ltd. Tax Appeal No. 2471 (Guj) of 2009, wherein the Hon'ble High Court has observed as under: - "Revenue carried the matter in appeal before the Tribunal. The Tribunal did not address the question of correctness of the CIT (Appeal)'s conclusion that amount of Rs. 70 lakhs represented the genuine export sale of assessee. The Tribunal however, upheld the deletion of Rs. 70 lakhs under section 68 of the Act observing that when the assessee had already offered sales realisation and such income is accepted by the Assessing Officer to be the income of the assessee, addition of the same amount once again under section 68 of the Act would tantamount to double taxation of the same income. In view of the above situation, we do not find any reason to interfere with the Tribunal's order". Smt. Harshil Chordia v. ITO [2008] 298 ITR 349 ....
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....ng alleged ground that no stock register whatsoever was produced before auditor for audit and before Ld. Assessing Officer during the course of assessment proceeding it is submitted that said allegation is grossly wrong, far from facts of the case and without any conclusive evidence. The said allegation or ground of department is not supported by any documentary evidence/finding. The assessee during the course of assessment proceedings produced the stock register in physical and said facts is also mentioned in the reply filed by assessee vide letter dated 28-11-2019 in which it is specifically mentioned that stock register was also produced before Ld. AO. A copy of said letter filed attached with this submission.. The Ld. CIT(A) also given her findings on this issue in para no. 4.2 (vii) at page no. 7 of appeal order. For ready reference the finding of Ld. CIT(A) are reproduced herein below:- ''Though Ld. AO has stated that the stock register was not subject to audit and that the appellant has not shown the relevant stock register before the assessing officer, however on perusal of the details filed by the appellant before the A.O. as well as on perusal of the ass....
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....ertains period before enactment of Income Tax Act, 1961. Further in this case section 145 of the IT Act, 1961 (corresponding the section 13 of the India Income Tax. 1922) was applied by Ld. AO however in the case under appeal the Ld. AO neither applied the provisions of section 145(3) of the IT Act, 1961 nor rejected the books of accounts, 3. [1971] 82 ITR 540 (SC) CIT Vs Durga Prasad More:- In this case the issue before the Hon'ble Court to decide in which hand the income from property be taxed whether in individual assessee's hand or as trust property. Here the facts of the case are altogether and not at all relevant in present appellant's case. 4. [1995] 80 Taxmann 89 (SC) Sumati Dayal vs CIT: In this case assessee shown certain amounts in capital accounts in books claiming same to be winning from horse races. - For this contention she filed sworn statement. Assessing officer disbelieved her version and Settlement Commission upheld the assessment order holding that it was reasonable to infer, on facts that assessee did not participate in races but purchased winning tickets after events with unaccounted money. It is submitted that in the abo....
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....158 of Bangaluru and 110 to 216 of Koklata outlets before AO which were of 28-10-2016 and these were earlier produced before Investigation Wingh in F.Y. 2016-17 i.e. after the sales were made and same were verified by the Investigation Wing also. This view of the ld. CIT(A) indicates that the assessee has maintained regular books of accounts, bills, vouchers and day to day stock register having complete quantitative details and said books of accounts are audited. The assessee vide submission dated 27-09-2019 had produced stock record during the course of hearing. The cash sales transactions are recorded in regular books of accounts and the sale are made out of stock in trade for which no adverse finding had been observed by the AO except for the change in the methodology in issuing bills as mentioned at page 7 to 8 of the assessment order. Further the ld. CIT(A) observed that the AO had treated the cash deposited in the bank during the demonetization period in demonetized currency as unexplained cash credit u/s 68 of the Act although the nature and source of the cash deposits being proceeds arising out of cash sales etc. was evident from the entries in the audited books of accounts....