AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1333
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....cash deposited was Rupees 1.41 crores. This amount of Rupees 1.41 crores was deposited in the bank after demonetization was announced and was in the form of old currency notes. It defies all logic as to why would a person who has a regular bank account hold such huge cash in hand without any satisfactory reason? 2.2 that the taxpayers had failed to submit details like name, address, PAN of the buyers to establish the genuineness of high cash sales. 2.3 while granting relief to the assessee, the learned CIT Appeals has ignored the test of human probability and surrounding circumstances as laid down by the Honorable Supreme Court in the cases of Sumati Dayal 214 ITR 801 SC, and Durga Prasad More 82 ITR 540 SC. 3. The learned CIT appeal has erred in law and on facts in holding the income to be not taxable as per provisions of Sec. 115BBE of IT Act, 1961. 4. The learned CIT Appeal while granting relief has ignored that the taxpayer was involved in an activity against public policy. 5. The Appellant crave, leave or reserving the right to amend modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this....
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....f cash book The summary of cash book of the assessee for the period from 03.11.2016 to 08.11.2016 is as under: - Particulars Amount (In Rs.) Opening Balance as on 01.09.2016 20,98,024.45 Add: - Amount received against/for sales during month of September-2016 17,22,424.00 Add: - Amount received against/for sales during month of October-2016 1,14,43,282.00 Add: - Amount received against/for sales during period01.11.2016 to 08.11.2016 14,37,830.00 Less: - Cash Deposited in bank (Net) during month of September-2016, October-2016 and during period 01.11.2016 to 08.11.2016 20,79,000.00 Less: - Cash Expenses/payments during month of September-2016, October-2016 and during period 01.11.2016 to 08.11.2016 4,51,639.00 Closing Balance as on 08.11.2016 1,41,70,921.45 Out of closing cash balance as on 08.11.2016 the amount of Rs. 38,921/- was in non-demonetized currency i.e. notes of 50, 100 etc. and the amount of Rs. 1,41,32,000/- was in demonetized currency. 3) Documents/Evidences filed during assessment proceedings:- As apparent above the assessee was having sufficient cash in hand out of amount received ....
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....gainst sales in FY 2015-16 was of Rs. 2,45,73,510/- while in the FY 2016-17 the year under consideration the same was of Rs. 2,57,31,459/-, which is more or less similar to the previous year cash sales. The month to month sales varies due to demand in market because of sentiments of customers according to fluctuation in gold prices, festive seasons etc. which is not in control of the assessee. b) Comparison of cash in hand when at the end of October-2015 and Nov-15 Further, having the huge in cash in hand in not happened in this year only but the same happened in previous year also when at the end of October- 2015 and Nov-15 the assessee was having cash balance of Rs. 1.35 Crore and 1.08 crore respectively. c) Comparison of cash deposited in bank during the period 09/11/15 to 31/12/15 vis a vis 09/11/2016 to 31/12/2016 In previous year also during the period 09.11.2015 to 31.12.2015 the assessee deposited total cash of Rs. 1,23,00,000/- in his bank accounts and in compare to that during the period 09.11.2016 to 31.12.2016 the assessee deposited total cash of Rs. 1,41,32,000/- which is only 14.89% increased from previous year which is quite reasonable look....
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....The assessee maintains regular books of account which were audited by reputed Chartered Accountant: - The assessee maintains regular books of account, which are audited by independent and reputed Auditor. The cash sales and the corresponding cash deposits in banks are duly reflected in books of the assessee in the respective years. The books of account and the entries pertaining to cash sales and cash deposits have been accepted by the Department in the assessments framed in the past years and also during this year (except to cash deposited in demonetized currency) and in subsequent year. The copy of assessment order of AY 2014-15 and AY 2018-19 are at PB Page 128 to 135. The audited financial statements form part of the regular returns filed by the assessee. The trend of cash sales and cash deposits existed in the past years as well as in the months prior & subsequent to the demonetization period. The entries pertaining to cash sales and corresponding cash deposits in banks were duly reflected in the books of account of the assessee. The audited books of account and the tax audit report for the impugned F.Y. 2016- 17 were also filed before the AO in course of the assessme....
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....was also not on a/c of excess stock but the same was on a/c of weight difference in stock as taken by the survey party, which was not accepted by the ld. AO and blindly relying on the inventory of stock prepared by survey party this addition was made. The addition of Rs. 2865/- was made on a/c of alleged excess cash by not accepting the submission of the assessee such cash is saved with the assessee out of withdrawals made for household expenses. Thus, actually no excess stock and cash from the business premises of the assessee was found to survey party. During the course of survey, no any positive material/evidence was found to prove that the cash deposited in demonetized currency was not from sales of goods but the same was from some other source. Had, the source of cash deposit in demonetized currency would be the undisclosed income of the assessee and not the sales made by assessee, then obviously during the course of survey the department must had found major discrepancies in to physical stock & cash with of the same as per books of accounts, which was not found. This also shows that the cash deposited in bank in demonetized currency is actually accumulated with asses....
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....ing the source of cash or has not shown the relevant stock register before the assessing officer or not having the sufficient stock for making the sales. Thus, it cannot be said that the figures of sales and purchases are not supported by the quantity details. The ld. AO did not make any enquiry on the material submitted by the assessee. She merely proceeded on presumption and assumption and make the addition on account of cash deposits without any reason. She neither found any positive and conclusive evidence of back dating of the entries of sale, evidence of bogus sales, evidence of bogus purchases, evidence of non-existing of stock as on the date of sales and non-existing cash in the books of account. The sales of the assessee is supported by the sales bill issued to customers and such sales bills are serially numbered. It cannot be denied that before announcement of demonetization the assessee was regularly making sales and issuing the sales bills to the customers, therefore the assessee was not having occasion for booking the bogus sales prior to announcement of demonetization as or such prior period the sales bills had already been issued. Therefore, it cannot be all....
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....ntries in genuinely accepted books of account and the assessee was having the sufficient stock for that much of sales. L) In Vat assessment the sales declared by the assessee was accepted:- It is further most importantly relevant to mention here that the Commercial Taxs Department had accepted the sales of the assessee declared in its VAT returns as genuine, therefore there remains no reason to doubt the genuineness of part of such sale by the ld. AO. (Copy at PB page 121-127) It is admitted position of law that no addition can be made in the income of the assessee only on the basis of suspicion. Suspicion howsoever strong but cannot partake the character of evidence. The reliance is placed on following decisions: - i) Dhakeswari Cotton Mills Ltd vs. Commissioner of Income-tax [1954] 26 ITR 775 (SC) Case Law PB page 83-89 ii) Umacharan Shaw & Bros vs. Commissioner of Income-tax [1959] 37 ITR 271 (SC) Case Law PB page 90-85 iii) CIT vs. Kapil Nagpal, DBITA 609/2014 (Delhi HC) Case Law PB page 96-104 iv) Goyal Gases (P.) Ltd vs. Commissioner of Income-tax [1997] 94 TAXMAN 57 (DELHI) Case Law PB page 105-106 It is....
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.... him, therefore such transactions cannot be examined with point of view of cash credits. Hon'ble Rajasthan High Court in the case of Smt. Harshila Chordia vs Income-tax Officer APPEAL NO. 4 OF 2002 NOVEMBER 7, 2006 [2008] 298 ITR 349 (Rajasthan) Case law Paper Book page 147-152 held that no addition could be made in respect of the amount standing in the books of the assessee, which was found to be the cash receipts from the customers and against which delivery of vehicle was made to them. 6) The name, address and PAN of the customers to whom cash sales was made is not furnished As regarding to finding of the ld. AO that the name, address and PAN of the customers to whom cash sales was made is not furnished it is submitted that:- a) It is not compulsory or mandatory under the I. Tax Act, 1961 to collect the information related to full name, address and PAN of the customer to whom goods were sold in cash during the course of business below to the prescribed limit. It is voluntary to the customer to provide their personal information to the assessee while goods being sold. The assessee cannot enforce or compel to their customer to give their persona....
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....re should be some material that cash sales made by assessee either on account of sale on a lower price or sale made out of the material which is not shown in the books of account. There is no instance that cash sales have been made on lower rate than prevailing market price. In view of these facts and circumstances, we hold that there was no justification in rejecting the books of account and disturbing the trading result." 3) Kishore Jeram Bhai Khaniya, Proprietor, M/s Poonam Enterprises v. ITO ITA No. 1220/Del/2011 ITAT Delhi Judgement dated 13.05.2014) Case law Paper Book Page 159-167 The Hon'ble Tribunal held that We find that so long as the availability of stock in there and there is nothing adverse against the cash memos issued by the assessee, such cash sales cannot be doubted. Here it is pertinent to note that the volume of such cash sales at Rs.22.06 is to be seen in the light of assessee's total turn- over of Rs.10.29 crores. It is but natural that if a customer makes cash purchase and lifts the goods, there is no duty cast upon the seller to insist for the address of the purchaser. In the light of the fact that stock record was available with the assess....
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....sion given in paras hereinabove the reliance in this connection is placed on following judgements: - i) In support of our submission reliance is placed on following judgements: - 1) 2021 (5) TMI 447 - ITAT Visakhapatnam Asst. Commissioner of Income Tax, Central Circle-1 Visakhapatnam Versus M/S Hirapanna Jewellers And (Vice-Versa) Case Law Paper Book 181- 184 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 Rs. 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 ....
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....turns, which are not found to be in variance with the accounting and tax records. Therefore, it cannot be substantiated that the assessee has backdated the transactions of the sale. 5. ITAT further observed that CBDT had issued various standard operating procedures under 'Operation Clean money'. ITAT opined that "...it is very important to note that whether the case of the assessee falls into statistical analysis, which suggests that there is a booking of sales, which is non-existent and thereby unaccounted money of the assessee in old currency notes (SBN) have been pumped into as unaccounted money." 6. In the result the addition of Rs. 73.13 crore sustained by Ld CIT(A) on account of deposit of demonized currency was deleted by Hon'ble ITAT. In appeal by the Revenue, the Hon'ble High Court Pr. CIT (Central)-3 V/s M/s Agson Global Pvt. Ltd. In ITA No. 68-73/2021 order dated 19-01- 22 [Case Law Paper Book 322-374] dismissed the bunch of appeals filed by the Revenue by observing in para 17.6 as under: "17.6. Having regard to the extensive material which has been examined by the Tribunal, in particular, the trend of cash sales and corres....
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....ation and post that event as discussed, addition was not warranted and it is directed to be deleted; and further, profit embedded in Rs. 8,75,500/- need to be taxed @ 8% and it is ordered accordingly. Appeal of the assessee is partly allowed. 5) 2021 (12) TMI 599 - ITAT Bangalore Anantpur Kalpana Versus Ito, Ward - 1, Koppal.. Unexplained cash deposits in two bank accounts - Legal tender money in demonetization of currency - AO culled out, the deposits that was made of bank notes that were declared as not legal tender owing to demonetization of currency - HELD THAT:- Both AO and CIT(A) accepted the fact that the cash receipts are nothing but sale proceeds in the business of the assessee. Addition has been made only on the basis that after demonetization, the demonetized notes could not have been accepted as valid tender. Since the sale proceeds for which cash was received from the customers was already admitted as income and if the cash deposits are added under section 68 of the Act that will amount to double taxation once as sales and again as unexplained cash credit which is against the principles of taxation. Assessee was having only one source of inco....
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....traders/business man's/prudent man's angle/view, then that cannot be brushed aside by the AO, without disproving the explanation / facts or by giving cogent reasons. Statement of bank accounts of assessee (3 bank accounts) it is noted that assessee has deposited in his three bank account (predemonetization) an amount to the tune of Rs. 2,38,94,037/- and during (Post-demonetization period) the assessee had deposited to the tune of Rs. 2,38,94,037/- and it is found that the total bank deposit tallys with the figure shown in trading account i.e., Rs. 4,76,78,990/- (Rs. 4.76 crores). So taking into account all these facts and circumstances and demonetization being declared on the night of 8/9th November, 2016, it is noted that AO has accepted the invalid currencies to the tune of Rs. 11,08,796/- because it was shown by the assessee in his regular books maintained as on 08.11.2016. The assessee's explanation in respect of Rs. 12,41,704/- is that it is the amount which has been deposited by the sundry debtors as on 08.11.2016 which is found to be correct for the reason that the sundry debtors as on 08.11.2016 was to the tune of Rs. 14,93,120/- as is evident from the list of sund....
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....he cash balances contained the high denomination notes encashed by it. The ITO rejected the appellant's explanation that the high denomination notes formed part of its cash balances and treated the sum of Rs. 2,91,000 as the appellant's secreted profits from business and included it in its total income and assessed the appellant. Before the Tribunal, the appellant stated that the said entries were made in sheer nervousness after the coming into force of the High Denomination Bank Notes (Demonetization) Ordinance, 1946, on 12th Jan., 1946, as the appellant did not know that it had specific proof in its possession of having the high denomination notes as part of its cash balances. The Tribunal held that there was no other reason to suspect the genuineness of the account books in which these interpolations were made. If the entire account books were fabricated to serve its purpose, there would be no need for the appellant to make interpolations between the lines already written in a different ink and in such an obvious manner as to catch one's eye on the most cursory perusal. The Tribunal, however, examined the cash book and taking into consideration all the circumstances ....
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....to have possessed as part of its business, cash balance of at least Rs. 1,50,000 in the shape of high denomination notes on 12th Jan., 1946,-a mere conjecture or surmise for which there was no basis in the materials on record before it. [para 15] Unless the Tribunal had at the back of its mind the various probabilities which had been referred to by the ITO it could not have come to the conclusion it did that the balance of Rs. 1,41,000 comprising of the remaining 141 high denomination notes of Rs. 1,000 each was not satisfactorily explained by the appellant. [para 18] If the entries in the books of account were genuine and the balance in Rokar and the balance in Almirah on 12th Jan., 1946, aggregated to Rs. 3,10,681-13-9 and if it was not improbable that a fairly good portion of the very large sums received by the appellant from time to time, say in excess of Rs. 10,000 at a time, consisted of high denomination notes, there was no basis for the conclusion that the appellant had satisfactorily explained the possession of Rs. 1,50,000 in the high denomination notes of Rs. 1,000 each leaving the possession of the balance of 141 high denomination notes of Rs. 1,000 ea....
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....l must rest not on suspicion but on legal testimony." 9) Lakhmi chand Baijnath V. CIT [1959] 35 ITR 416 (SC).) Case Law paper Book page 208-211 Amount credited in business books can normally be presumed as business receipt. When an amount is credited in business books, it is not an unreasonable inference to draw that it is a receipt from business 10) Hon'ble Allahabad High Court in the case of Sri Ram Tandon Vs. CIT (1961) 42 ITR 689 ordained as under: Case Law paper Book page 212-216 "It appears extremely difficult to appreciate how the Tribunal thought it necessary or proper to make an estimate of 35 notes at Rs. 1,000 each to have been contained in the cash balance. The Tribunal has given no reason whatever for its finding that the assessee possessed 35 notes of Rs. 1,000 each on the day the Ordinance was promulgated. This evidently is an arbitrary expression of its own guess, which cannot be accorded the status of a finding. Equally arbitrary is the other finding that the balance of 10 notes was from an undisclosed source. After having heard counsel for the Department and after giving best consideration to the matter one is quite unable to se....
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....nted income of the assessee company from some undisclosed sources." 12) Madhuri Das Narain Das Vs. CIT (1968) 67 ITR 368 (All) Case Law paper Book page 220-221 Section 4 of the Income-tax Act, 1961 [Corresponding to section 3 of the Indian Income-tax Act, 1922] - Income - Chargeable as - Assessment year 1947-48 - Assessee encashed 28 high denomination notes of Rs. 1,000 each after issuance of High Denomination Bank Notes (Demonetisation) Ordinance, 1946 - When asked to explain source of said notes, assessee submitted that same had come out of closing cash balance of its business - ITO disbelieved explanation and treated entire amount as assessee's income from an undisclosed source - Tribunal accepted that 22 notes could have come out of cash balance of Rs. 38,000 and odd, and remaining 6 notes could not have formed such balance - Whether finding of Tribunal, being based upon surmises and conjectures, could not be upheld - Held, yes 13) K.S. KannanKunhi Vs. CIT (1969) 72 ITR 757 Case Law paper Book page 222-224 Thus we find that the Income-tax Officer and the Appellate Assistant Commissioner also have not considered the acceptability or otherwise ....
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....ssioner of Income Tax [1963] 47 ITR 634 (Allahabad) Case Law paper Book page 229-231 Section 143 of the Income-tax Act, 1961 [Corresponding to section 23(3) of the Indian Income-tax Act, 1922] - Assessment - Addition to income - Assessment year 1947-48 - On demonetisation of high denomination notes assessee encashed 21 such notes, part of which were held, by Tribunal as his income from undisclosed sources on ground that same could not be satisfactorily explained by assessee - Whether, prima facie value represented by high denomination notes in possession of assessee must be presumed to be part of his cash balance and if department wanted to treat such value as his concealed income from some undisclosed sources, it was for department to establish that fact on basis of material in their possession - Held, yes - Whether in view of fact that Tribunal accepted assessee's case at least with regard to eight notes and further that it made its own estimate of cash balance of assessee confining some proportion of high denomination notes implying thereby possibility of assessee receiving such notes during course of his business, Tribunal committed an error in not accepting assessee's....
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....of above case cash of Rs.24,58,400/- was deposited in bank account. The Assessing Officer made the addition on the ground that nexus of such deposit was not establish with any source of income. The assessee claimed that it was duly recorded in the books on account of cash sales and was considered in the Profit and Loss Account. The Assessing Officer had verified the stock and cash position as per books and had accepted the same. Complete books of account and cash book was submitted to the Assessing Officer and no discrepancy was pointed out. On this basis CIT(A) deleted the addition. Tribunal also observed that it is not in dispute that sum of Rs.24,58,400/- was credited in the sale account and had been duly included in the profit disclosed by the assessee in its return. Therefore, cash sales could not be treated as undisclosed income and no addition could be made once again in respect of the same. The Hon'ble High Court dismissed the appeal filed by the Department. Promulgated 19) 2021 (10) TMI 1139 - ITAT DELHI Neeru Jain Versus Ito, Ward-67 (4) Delhi Case Law paper Book page Addition u/s 69A - Cash deposits during the demonetization period - Assessee submitted ....
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....he Assessing Officer that the amount was withdrawn to justify the cash deposits during demonetization period i.e. between 09.11.2016 to 30.12.2016. It is also seen that the cash was withdrawn much prior to such event. So far observation regarding sharp increase in payable expenses is concerned, there is no finding by the Assessing Officer that such expenses are bogus - addition has been made purely on the basis of suspicion. Such action of authorities below cannot be affirmed - Decided in favour of assessee. 4.1.3 (e) Drawing inference from the above cited cases, in the instant case, the assessee furnished a reasonable explanation with regard to the nature and source of the cash deposited in banks in demonetized currency which was not found to be false by the Department. The explanation offered by the assessee was in line with the trend of cash deposits in the past years which was accepted by the Department in the assessments framed u/s 143(3) of the Act in the past and future. No material was brought on record by the Revenue Authorities to draw an inference that the explanation offered by the Assessee was incorrect or unreasonable or that the impugned sum represented inco....
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....it is proposed to tax the unexplained credits, money, investment, expenditure, etc.,which has been deemed as income under section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of 30% (plus surcharge and cess as applicable). It is also proposed to provide that no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of the Act in computing deemed income under the said sections. This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-14 and subsequent assessment years." Thus, the intention of the Legislature behind introduction of section 115BBE was not to bring to tax genuine receipts already offered to tax as income by the Assessee at higher tax rates. Such an interpretation would lead to recurring attempts on the part of the revenue authorities to reject genuine explanations offered by the assessee with respect to sums credited/offered as income in its books as unsatisfactory solely to extort higher rates of taxes thereon u/s 115BBE of the Act. The A.O in exercising his powers u/s 68 of the Act is not vested with unfette....
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.... have been regular feature of the assessee's business over the past several years has not been denied by the A.O. In fact, in the past, the AO after conducting a detailed scrutiny of books of account of the assessee and after arriving at complete satisfaction with respect to the correctness of the entries recorded therein1accepted the cash sales and corresponding cash deposits in banks in the assessments framed u/s 143(3) of the Act. Thus, there is no reason why similar modus operandi, which continued in the current F.Y. 2016-17 (A.Y. 2017-18), should not be accepted by the AO and rejected on mere surmises and conjecture of the A.O. It is pertinent to note that while the A.O. has accepted the cash deposited in the bank accounts in the previous financial years, cash deposited in banks during the impugned F.Y. 2016-17 in the Nondemonetized currency. The ld. AO did not accept the same modus operandi with respect to the cash deposited in demonetized currency merely on the pretext that the same was deposited in demonetized currency and hence was suspicious in nature. Thus, ld. AO is blowing hot and cold in same stream accepting and rejecting the explanations offered by the asse....
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....'ble Supreme Court in case of Karim tharuvi Tea Estate Ltd. vs. State of Kerala [1966] 60 ITR 262 (SC). 10. Now, it is well-settled that the Income-tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into, force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force. 18. The Surcharge Act having come into force on September 1, 1957, and the said Act not being retrospective in operation, it could not be regarded as law in force at the commencement of the year of assessment 1957-58. Since the Surcharge Act was not the law in force on April 1, 1957, no surcharge could be levied under the said Act against the appellant in the assessment year 1957-58. 4.1.3 (g) In view of above submission it is submitted that entire sales of the assessee are supported by the bills, duly verifiable from books of accounts & records and the same is completely genuine. The ld. AO did not specify any defects in the sale and the sale is in line of its own pre....
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....ssee from time to time. The AO noticed that, assessee has deposited cash aggregating to Rs. 1,41,32,000/- during the demonetization period i.e. between 09.11.2016 to 30.12.2016 in the form of Specified Bank Notes (SBNs). The assessee justified the cash deposits during demonetization period by submitting that cash sales boosted during Diwali period and the cash generated from that time was deposited during demonetization. However, the AO did not accept the contention of assessee by mentioning that if the sales were high during Diwali then corresponding cash deposits must also be available in the bank account but the cash was deposited much after Diwali and there was no justification as to why the assessee was holding such high cash in hand after Diwali, only to deposit it in his bank account on demonetization. The AO further justified the addition by mentioning that the assessee has not submitted any details like the name, address, PAN No. of the buyer to establish the genuineness of high cash sales during the course of the year under consideration. The AO held that the cash deposited during the demonetization period is nothing but undisclosed income of the assessee which was deposi....
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....ay to day stock register having complete quantitative details have been maintained by the appellant which have been duly audited. It was submitted that the cash sale transactions are recorded in the regular books of accounts, sales are made out of stock-in-trade and the said Stock Register was produced before the AO alongwith sales invoices, bills, Bank statements & VAT Returns and also demonstrated correlation of such cash sales with purchase and stock of business in the course of assessment proceedings. It was further contended that the appellant has charged VAT on all bills and all such sales have been reflected in the VAT Returns of the appellant which has been accepted by the VAT Department. (iii) I have considered the facts of the case and it is observed that the sales are made out of stock-in-trade and the said Stock Register was produced before the AO alongwith sales invoices, bills, Bank statements & VAT Returns and also demonstrated correlation of such cash sales with purchase and stock of business in the course of assessment proceedings. As regards the stock position the appellant has produced the monthwise details of stock and it is observed that the books of a....
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....e said that the figures of sales and purchases are not supported by the quantity details. The ld. AO did not make any enquiry on the material submitted by the appellant. He merely proceeded on statistical analysis to make the addition on account of cash deposits. He neither found any concrete and conclusive evidence of back dating of the entries of sale, evidence of bogus sales, evidence of bogus purchases, and non-existing cash in the books of account. Infact the AO did not even reject the books of accounts of the appellant under the provision of section 145(3) of the Act. (vii) It is also observed that the AO has treated the cash deposited in the banks during the demonetization period in demonetized currency as unexplained cash credits u/s 68 of the Act although the nature and source of the cash deposits being proceeds arising out of cash sales etc. is patently evident from the entries in the audited books of account of the Assessee. It is not the case of the A.O. that the cash deposited in the bank during the demonetization period was in excess of what was available in the cashbooks. The fact that the cash deposits in banks were sourced out of cash sales is evident from....
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....ppellant was fully vouched and verified and are duly recorded in the books of accounts, which were also audited. Further the sales are duly backed by purchases and opening stock available with the appellant and after these sales the stock of the appellant correspondingly got reduced. (x) Moreover, the Ld. AR has rightly pointed out that on one hand the sales shown by the appellant are fully backed with vouchers and duly recorded in the books of accounts and also in the stock register while on other hand the AO has not brought any material on record to establish that these sales are bogus. (xi) As regards the addition of an amount of Rs. 1,41,32,000/- deposited by the appellant in cash in the bank account, the AO has considered that these were Specified Bank Notes and added the same as income of the appellant by applying the provisions of section 68 of the Act while the provisions of 68 as such are not applicable on the sale transactions recorded in the books of accounts because the sale transaction are already part of the income which is already credited in Profit & Loss Account, therefore there is no occasion to again consider the same as income of the appellant ....
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....tock and cash position as per books and had accepted the same. Complete books of account and cash book was submitted to the Assessing Officer and no discrepancy was pointed out. On this basis CIT(A) deleted the addition. Tribunal also observed that it is not in dispute that sum of Rs.24,58,400/- was credited in the sale account and had been duly included in the profit disclosed by the assessee in its return. Therefore, cash sales could not be treated as undisclosed income and no addition could be made once again in respect of the same. The Hon'ble High Court dismissed the appeal filed by the Department". (xv) The case of CIT v. Vishal Exports Overseas Ltd., Tax Appeal No. 2471 of 2009 was decided by the Hon'ble Gujarat High Court on 03.07.2012(Copy at Case Law PB Page No. 238) wherein it was held that "In the facts of above case the assessee was an exporter. The issue was regarding sale of Rs.70 lacs included in turn-over which was more than 500 crores. The assessee had claimed deduction u/s 80HHC of the Act. On the basis of information received by the Assessing Officer from investigation he considered the entry for export of 70 lacs as bogus. He denied benefit u/s 80HHC o....
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....Act. We found that all the points or allegation mentioned by the AO are duly considered and discussed by the ld. CIT(A) while dealing with the appeal of the assessee. The revenue did not pin point which of the findings of the ld. CIT(A) is incorrect or against the facts placed on record by the assessee. We noticed that during the course of assessment proceedings, the AO examined the books of account and she has not rejected the books of account of the assessee and provisions of section 145(3) were not applied. During the year under consideration the assessee deposited Rs. 1,41,32,000/- in demonetized currency. The cash so deposited was accumulated cash which was received against/for sales made in the proprietorship concern of assessee M/s Mohan Lal Mahendra Kumar Jewellers. The assessee submitted the summary of cash book as under:- "The summary of cash book of the assessee for the period from 03.11.2016 to 08.11.2016 is as under: - Particulars Amount (In Rs.) Opening Balance as on 01.09.2016 20,98,024.45 Add: - Amount received against/for sales during month of September-2016 17,22,424.00 Add: - Amount received against/for sales during month of October-....
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....rresponding cash in hand have been a regular feature of the assessee's business since the past several years. The cash receipts against sales in FY 2015-16 was of Rs. 2,45,73,510/- while in the FY 2016-17 the year under consideration the same was of Rs. 2,57,31,459/- which is more or less similar to the previous year cash sales. The month to month sales varies due to demand in market, festival seasons, fluctuation in gold prices and for several other factors. Further in previous year also during the period 09.11.2015 to 31.12.2015 the assessee deposited total cash of Rs. 1,23,00,000/- in his bank accounts and in comparison to that during the period 09.11.2016 to 31.12.2016 the assessee deposited total cash of Rs. 1,41,32,000/- which shows increase by 14.89% over the previous year which is quite reasonable looking to the fact that overall sales of the assessee in comparison to previous year have increased by Rs.6,63,12,037/- which is 59% as explained by the assessee to AO vide letter dated 26/12/2019 copy at APB page 40-44. The assessee has justified higher sales in Oct 2016 by submitting letter dated 28/12/2019 to AO copy place at APB page 45-46. The assessee submitted that on 06.1....