2023 (3) TMI 479

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....n of Rs.7,26,80,135/-. 2.3 The CIT(A) failed to insist the assessee to furnish the details in support of the source for cash deposits to allow the assessee's claim. 2.4 The CIT(A) failed to consider the fact that the assessee had furnished only the reconciliation statement that too confirms only the closing balance of trade receivables as per the books of accounts and the balance sheet of the assesses. 2.5 The CIT(A) ought to have appreciated the fact that the addition was made u/s.68 towards cash deposits for non-furnishing of evidence for the source for the same, whereas the assessee has tried to substantiate the above said claim only through reconciliation statement which is not acceptable. 2.6 The CIT(A) ought to have appreciated the fact that the addition was made by the AO after considering the very same reconciliation statement furnished during the course of assessment proceedings, which was not considered as a proof for assessee's claim of source for the cash deposits. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the Order of the learned Commissioner of Income Tax (Appeals) ....

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.....2012 plus sales as per P & A/c minus closing balance of trade receivables as on 31.03.2013, then, there is a receipt of Rs.14,71,51,480/- which includes a sum of Rs.5,14,32,192/- cash receipts from various parties. The assessee further submitted that the assessee had also filed confirmation from various parties, including M/s.Sri Baba Trading Co., to prove that advance has been received for supply of materials. The AO without appreciating facts, simply made additions towards cash deposits u/s.68 of the Act. The Ld.CIT(A) after considering relevant submissions of the assessee and also taken note of reconciliation filed by the assessee to explain the position of trade receivables as on 01.04.2012 & as on 31.03.2013 opined that the assessee has filed all evidences to prove cash receipts from various parties, including M/s.Sri Baba Trading Co. The Ld.CIT(A) further observed that the assessee has received a sum of Rs.5,14,32,192/- from various parties in cash has also received a sum of Rs.2.20 Crs. from M/s.Sri Baba Trading Co. Therefore, the Ld.CIT(A) opined that there is no basis for the AO to consider cash deposits u/s.68 of the Act, as unexplained cash credit and thus, direct the A....

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....t order. The AO in the assessment order has stated that the onus lies on the assessee to file evidence establishing source of cash deposits made into the bank by providing with cash book and trade receivables, individual ledger accounts and sales accounts of all the parties. He has further stated that appellant has failed to substantiate their claim, hence, he proceeded to consider cash deposits amounting to Rs.7,26,80,135/- as unexplained cash credit. For this purpose, he has given following working: Opening Balance of Trade Receivables 10,07,97,897 Addition: Sales during the year 9,77,30,840 Total 19,85,28,737 Less: Receivables received as stated by representative 5,14,32,192 Balance 14,70,96,545 Less: Cash receipts as stated by representative 2,20,00,000 Closing balance of Trade Receivables 12,50,96,454 AO has further stated that appellant has shown trade receivables as on 31.03.2014 at Rs.4,93,65,705/-. As per the AO, the closing balance of trade receivables as on 31.03.2014 should be at Rs.12,50,96,454/- but appellant has accounted for only Rs.4,93,65,705/-. Thus, he has held that there is a huge difference of Rs.7,57,30,749/-....

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....and trade receivables on 29.12.2016. However, on page 3 of assessment order, AO is found to have stated that copy of sale account ledger of other parties have not been submitted which is contradictory to his own admission of producing sales ledger and trade receivables account. Therefore, in my considered opinion, there is no basis to considered cash deposits u/s.68 as appellant has substantiated the source of cash deposits made in the bank account. In my considered opinion, appellant has explained entire cash deposits found in the bank account by way of producing evidences before the AO. in the circumstances, AO is directed to delete the addition made u/s.68. The grounds taken by the appellant are allowed. 4.6. During the appellate proceedings, Ld.AR has filed reconciliation statement with regard to trade receivables which is given as under: Particulars Rs. Rs. Opening Balance of Debtors as per Balance sheet 01.04.2012 - 10,07,97,897 Sales as per Profit & Loss A/c 2013 - 9,77,30,840 Total   19,85,28,737 Less: Collection - Cheques and Cash     (A) Cash from Debtors as per Assessment order 5,14,32,192 &nbs....

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....he fact simply accepted reconciliation filed by the assessee and allowed relief. 6. The Ld.Counsel for the assessee supporting the order of the Ld.CIT(A) submitted that the assessee has filed reconciliation statement explaining cash receipts from various parties including M/s.Sri Baba Trading Co. The assessee had also explained how the AO fundamentally went wrong in arriving at closing balance of trade receivables and as per which, the AO had considered only opening balance of trade receivables as on 01.04.2012 and closing balance of trade receivables as on 31.03.2013 by taking figures from the balance sheet without going into the individual ledger account copies in respect of parties which resulted in arriving at wrong conclusion that there is a difference between trade receivables. But, fact remains that while arriving at closing balance of trade receivables, the AO had omitted to consider sales made for FY 2013-14. The assessee has reconciled the figures and explained before the Ld.CIT(A). The Ld.CIT(A) after considering relevant facts has rightly deleted additions made by the AO and their orders should be upheld. 7. We have heard both the parties, perused the materials av....