TaxTMI 
TaxTMI 
2023 (9) TMI 1113
X X X X Extracts X X X X
X X X X Extracts X X X X
....for non-furnishing of these details during assessment proceedings and the case of the assessee does not fall in any of the exceptions mentioned in Rule 46A of the IT Rules?" 2. The assessee is individual and engaged in trading of Petrol, Diesel and Lubricant Oil under the name & style of M/s Sugam Petroleum KSK. The assessee filed a return of income for the year under consideration on 25.11.2017 declaring total income of Rs. 11,78,200/-. The case was selected for scrutiny under CASS on the issue of large cash deposited in the bank accounts during the demonetization period. The AO called the information u/s 133(6) of the Act from the banks and found that the assessee has deposited cash of Rs. 1,22,58,500/- in the bank account with State Bank of India and Rs. 14,67,000/- in the bank account with Bank of Baroda in demonetized notice between 10.11.2016 to 30.12.2016. The AO asked the assessee to furnish the requisite details. After verification of the details filed by the assessee in the shape of cash book, bank account statements, stock register and ledger account of the assessee in the books of IOCL showing the transactions of purchase and sale of High Speed Diesel (HSD) and Motor S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h bogus sales of diesel and petrol and therefore, the books of account of the assessee are not reliable and liable to be rejected u/s 145(3) of the Act. The AO consequently treated the entire cash deposit in the bank account of the assessee to the tune of Rs. 1,37,25,500/- as unexplained cash credit and added to the income of the assessee u/s 68 of the Act. The Ld. CIT(A) has deleted the addition made by the AO by considering additional evidence produced by the assessee without proper verification and examination of the same. The AO in the remand report objected to the additional evidence produced by the assessee before the Ld. CIT(A) when the assessee did not produce the same despite sufficient opportunities given by the AO during the assessment proceedings. He has relied upon the order of the AO. 4. On the other hand, Ld. AR of the assessee has submitted that the source of the cash deposit in the bank account was explained by the assessee by producing cash book, ledger account, summary of purchase and sales of HSD and MS. He has further submitted there were factual mistakes in the ledger account maintained by the IOCL which was pointed out by the assessee by producing the invoic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the factual incorrect details appearing in the ledger account maintained by the IOCL is not justified when the assessee has duly reconciled the difference and explained the reasons for short quantity shown in the ledger maintained by the IOCL by comparing the same with invoices of the purchase as well as the payment made by the assessee as reflected in the bank account statement. He has supported the impugned order of the Ld. CIT(A). 6. We have considered the rival submissions as well as relevant material on record. The AO has reproduced the details of the purchase shown in the leger account maintained by the IOCL as well the monthly stock summary of petrol and diesel maintained by the assessee. The AO found that the assessee has inflated the purchase as shown in the monthly summary of petrol and diesel in comparison to the purchase shown in the ledger account maintained by the IOCL. Based on these discrepancies the AO held that the assessee inflated the purchase and consequently showing the bogus sales with a view to introduce unaccounted income in the cash book to justify the cash deposit made in the bank account during the demonetization period. Accordingly the AO has made the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... produced by the assessee. The Ld. CIT(A) has considered this issue in para 4.1.3 to 4.1.4 as under: "4.1.3. I have considered the facts mentioned in the assessment order, written submission of the appellant, additional evidences furnished by the appellant, remand report and rejoinder thereon. I find one of the basis for rejection of books of account made by the AO is that there was variance in date of cash withdrawn as per cash book and deposited in the bank account. Specific variance as pointed out by the AO has already been mentioned in the earlier paras. There was gap of one day between the date of deposit shown in the cash book and bank statement in few occasions. I find force in the submission made by the appellant in this regard. There may be various reasons for such variance. Further, it is known to all that there were long queues in the banks for the depositing SBN currencies in the demonetization period. The fact that on many times cash is not deposited in the bank account on the same day, but, entries in this regard is made in the books of account on the date of withdrawal of cash. Such minor variance cannot be made the basis of rejection of books of account u/s 145(3)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nces and verified the same from the purchase ledger of the appellant. I find that various invoices have been issued by the IOCL for mixed purchases i.e. partly for petrol and partly for diesel. In the statement of IOCL on which the AO has placed reliance upon, the quantity of purchase of diesel/petrol has been shown less but, value has been shown correctly as per purchases invoices. Few instances are being mentioned hereunder:- As per IOCL statement As per purchase invoices issued by IOCL to the appellant Invoice no. Date Item sold Quantity sold (KL) Value (Rs.) Invoice no. Date Item purchased Quantity purchased (KL) Value (Rs.) 0686994705 27.04.2016 MS EURO 6 681347 0686994705 27.04.2016 MS EURO 6 681347 HSD 6 0687438405 14.05.2016 MS EURO 6 705600 0687438405 14.05.2016 MS EURO 6 705600 HSD 6 0687568190 20.05.2016 HSD 6 703288 0687568190 20.05.2016 HSD 6 703288 MS EURO 6 0687602276 21.05.2016 HSD 6 703288 0687602276 21.05.2016 HSD 6 703288 &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sp; HSD 3 0692646672 14.12.2016 HSD 6 758611 0692646672 14.12.2016 MS EURO 6 758611 HSD 6 0692688554 15.12.2016 MS EURO 3 725704 0692688554 15.12.2016 MS EURO 3 725704 HSD 9 0692772195 19.12.2016 HSD 6 788250 0692772195 19.12.2016 MS EURO 6 788250 HSD 6 0692804626 20.12.2016 MS EURO 3 753567 0692804626 20.12.2016 MS EURO 3 753567 HSD 9 0692882501 23.12.2016 MS EURO 6 788250 0692882501 23.12.2016 MS EURO 6 788250 HSD 6 0692913200 24.12.2016 HSD 9 753567 0692913200 24.12.2016 MS EURO 3 753567 HSD 9 0692935936 26.12.2016 HSD 6 788250 0692935936 26.12.2016 MS EURO 6 788250 HSD 6 0692975060 27.12.2016 HSD 9 753567 0692975060 27.12.2016 MS EURO 3 753567 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... HSD 9 0694119881 11.02.2017 HSD 6 815636 0694119881 11.02.2017 MS EURO 6 815636 HSD 6 0694265255 17.02.2017 HSD 6 815636 0694265255 17.02.2017 MS EURO 6 815636 HSD 6 0694583912 01.03.2017 MS EURO 6 815636 0694583912 01.03.2017 MS EURO 6 815636 HSD 6 0694707486 06.03.2017 MS EURO 6 815636 0694707486 06.03.2017 MS EURO 6 815636 HSD 6 0694857789 11.03.2017 MS EURO 6 815636 0694857789 11.03.2017 MS EURO 6 815636 HSD 6 0695024860 18.03.2017 MS EURO 6 815636 0695024860 18.03.2017 MS EURO 6 815636 HSD 6 0695150901 23.03.2017 HSD 6 815636 0695150901 23.03.2017 MS EURO 6 815636 HSD 6 0695183649 24.03.2017 HSD 6 815636 0695183649 24.03.2017 MS EURO 6 815636 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The closing stock and purchases as worked out above are tallied with the entries made in the books of account of the appellant. Month Opening stock (Litre*) Quantity Purchased as per AO (Litre) Add: Purchases not shown in the statement of IOCL but mentioned in purchase invoices (Litre) Total Purchase (Litre) Purchase as per books of account (Litre) Sales (Litre) Closing Stock (Litre) April 14353 96000 6000 102000 102000 99929 16424 May 16424 132000 18000 150000 150000 154226 12198 June 12198 108000 0 108000 108000 107305 12893 July 12893 36000 12000 48000 48000 50705 10188 August 10188 54000 0 54000 54000 40686 23502 September 23502 18000 6000 24000 24000 42745 4757 October 4757 108000 12000 120000 120000 99529 25228 November 25228 138000 15000 153000 153000 158896 19332 December 19332 159000 42000 201000 201000 184517 35815 January 35815 69000 30000 99000 99000 127135 7680 February 7680 105000 0 105000 105000 101256 11424 March 11424 78000 33000 111000 111000 114158 8266 *The AO has converted quantity of purchase/stock/sales in litres, but inadvertently, he has written units....