AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 738
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.... the A.Y. 2017-18 on 31.10.2018 by declaring total income of Rs. 10,48,160/-. The case of the assessee was selected for complete scrutiny and notices u/s 143(2) and 142(1) was issued for the purpose of verification of which value of cash deposit during the demonetization period. However, assessee neither complied with the notices issued by the AO nor filed any books of accounts as asked by the AO. Accordingly, ld. AO rejected the books of account u/s 145(3) of the Act and viewed that assessee has nothing to offer regarding cash deposit of Rs. 1,65,17,000/- during the demonetization period that is 09.11.2016 to 30.12.2016 and added the entire unexplained money in the hands of assessee. 3. Aggrieved by the above order, assessee preferred an appeal before the ld. CIT(A). 4. Before ld. CIT(A), assessee submitted that cash deposit in bank account during the demonetization period was out of cash sales made and such sales were duly accounted in its books of account maintained by the assessee. The assessee also contended that accounts were subject to audit wherein no irregularities were found by the auditor and assessee has been declaring the true sales and purchase figures in another st....
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....ions referred to in the submissions viz., Kanpur Steel Co. Ltd. vs. Commissioner of Income-tax (1957] 32 ITR 56 (ALL.), CIT v Kailash Jewellery House, ITA No. 613/2010 (Delhi High Court) decision dtd. 09.04.2010 and CIT V. Vishal Exports Overseas Ltd., Tax Appeal No. 2471 of 2009 (Gujarat High Court), decision dtd. 03.07.2012 applies to the appellant's case. 5.4.3 It is further observed that the appellant during the relevant year deposited total cash of Rs.5,20,48,000/-, out of which substantial portion of cash deposit (Rs.3,61,26,000/-) was made during pre-demonetization period i.e. before 08.11.2016. Therefore, it is not a case of the A.O. that the appellant only deposited cash into the bank account during the post demonetization period which proves the bonafide of the appellant. 5.4.4 The appellant has further submitted that after announcement of demonetization, in a situation of panic, the customers in large numbers gathered in the shop for making payment of outstanding dues in demonetized notes. In this regard, I do not find any abnormality in such situation where the appellant had no option but to accept the payments in cash. 5.4.5 It is observed that in R. B. Jessa....
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....the assessee that it had received advances from customers on the occasion of Ramnavami Nayakhata. In other words, we would have given the AO more time to conduct enquiries and investigation. In this case we find that these advances have subsequently been recorded as sales of the assessee firm and that these sales have been accepted as income by the A0 during the year. He has not disturbed the sales of the assessee. When a receipt is accounted for as income, no separate addition of the same amount as income of the assessee under any other Section of the Act can be made as it would be a double addition. In the result, we delete the addition made and allow its claim of the assessee." b) CIT v. Smt. Harshil Chordia v. ITO (Rajasthan High Court) 2008 298 ITR 349 Raj "So far as question No. 2 is concerned, apparently when the Tribunal has found as a fact that the assessee was receiving money from the customers in hands against the payment on delivery of the vehicles on receipt from the dealer the question of such amount standing in the books of account of the assessee would not attract Section 68 because the cash deposits becomes self-explanatory and such amounts were received by the....
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....e rejection of books by the A.O is not sustainable law. 5.4.7 Further I find that the A O invoked the provisions of section 69A of the Act at the time of making the addition of Rs.1,65,17,000/-. On perusal of the provision or Sec. 69A of the Act, it is observed that the pre-condition for the invoking the said provision is that money or valuable is not recorded in the books of accounts, which is not the case here. Appellant has placed reliance upon the Bangalore ITAT decision in the case of Smt. Teena Bethala vs. ITO 1TA No. 1383/Bang/2019) dated 28/08/2019, where it has been held as under- "On a reading of section 694 (supra), it is clear that the onus is upon the AO to find the assessee to be the owner of any money. Bullion, jewellery or valuable article and such money, bullion, jewellery or valuable article was not recorded in the books of account, if any, maintained by the assessee for any source of income. In these circumstances, the A0 can resort to making an addition under section 69A of the Act only in respect of such monies / assets / articles or things which are not recorded in the assessee's books of account. In the case on hand, the cash deposits are recorded i....
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....tted that the order passed by the ld. CIT(A) is a reasoned order and the assessee has produced necessary books of accounts and supported documents to justify the sale made during the period of demonetization and after verification, the ld. CIT(A) has passed a reasoned order. In such a situation, there is no scope to interfere in the order passed by the ld. CIT(A) by this Tribunal. 8. We have carefully gone through the material available on record and considering the rival submission made by the parties, in the present case both the authorities below accepted the fact that the amount received by assessee are nothing but sale proceeds in the course of business of the assessee. The addition has made only on the basis that after demonetization, the demonetization note could not have been accepted as valid tender. Since the sales proceeds for which cash was received are added u/s 69A of the Act which would amount to double taxation once as sale and another against as unexplained cash credit which is violate principles of taxation. The ld. AR further contended that Hon'ble ITAT of Kolkata in the case of ITO vs M/s. Senco Alankar in ITA No. 10/Kol/2021 dated 27.06.2022 on an identical fa....
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....spect of the books of account, more particularly when the purchases have not been doubted in the assessment. Ld. AO has noted that details of customers on the invoices raised during the time window on the date of announcement of demonetization were not recorded on the invoices for some of the instances wherein the details were recorded, summons were issued to those customers, most of which remained unreplied. We note that all the sales were cash sales and in case of cash transactions of sale, delivery of goods is taken against the cash payment and it is hardly necessary for the seller to bother about the name and address of the purchaser. 7.2 We further observe that the assertion of the ld. AO on the mere possibility of assessee earning considerable amount out of cash sales on the date of announcement of demonetization is a pure conjecture on the part of the AO and is based on surmises, speculating on the approach adopted by the assessee. Rather, the estimation approach of arriving at probable sales value by the Ld. AO cannot be rationally inferred to justify the addition so made. Thus, we find that the Ld. AO indulged in suspicion, conjecture and surmises and acted without any e....