TaxTMI 
TaxTMI 
2023 (10) TMI 15
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....nearby small villages, small hawkers etc. on credit as well as in cash and collects outstanding debts in cash. d. Unfortunately, most of these small shopkeepers, vendors and weekly market hawkers are not maintaining any bank account as they are residing in remote village areas and the banking facilities are not available to them. e. They are very poor and needy people who make their livelihood by selling items of daily use and they are aloof to the modern world. Please refer Page No. 1 to 3 of the paperboook. 2. The Ld. CIT(A), unfortunately, without taking into consideration the facts of the case, as stated above, has observed as under (vide Para 3 of the appeal order): In Para 3.3.1: a. The cash book revealed the balance as on 08.11.2016 was Rs. 253.40 only. (There was no transaction after this). b. Though the assessee contended that these old notes were received from third parties. In Para 3.3.3: a. The AR has not been able to controvert the fact that balance as per cash book was mere Rs. 252.40 only whereas Rs. 28,00,000 has been deposited in his bank account. b. The source of this cash wi....
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....ra 3.3.3(a) of the appeal order: The said allegation is submitted to be quite unfortunate as the entire cash book was filed before the Ld. AO on 15/1112019 vide E-filing Ack. No. 15111912141675. (Please refer Page 35 of the paperbook) The said cash book contains the following particulars during the material period i.e., 08/11/2016 to 12/11/2016: Particulars Amount (in Rs.) Opening cash in hand as on 08/11/2016 252.40 Add: Cash sales on 09/11/2016 89,275.34 Add: Cash realized from debtors on 09/11/2016 1,64,850.00 Add: Cash sales on 10/11/2016 1,66,221.59 Add: Cash realized from debtors on 10/11/2016 4,47,695.00 Add: Cash sales on 12/11/2016 16,19,020.82 Add: Cash realized from debtors on 12/11/2016 4,67,245.00 Total 29,54,560.15 Less: Cash deposit made in the bank on 12/11/2016 28,00,000.00 Cash Balance as on 12/11/2016 (as appearing in cash book filed) 1,54,560.15 Cash Balance as on 12/11/2016 (as appearing in cash book filed) The demonetized currency amounting to Rs. 28,00,000 was deposited in the bank on a lumpsum basis and the remaining demonetized currency was kept in....
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....sales - 11 days g. Out of such 11 days, more than 11lakh per day of cash sales - 09 days h. Out of such 09 days, more than 13 takh per day of cash sales - 06 days i. Out of such 06 days, more than 15 lakh per day of cash sales - 04 days The aforesaid facts have been examined by a Chartered Accountant from the books of accounts maintained by the appellant and a certificate thereof is attached herewith vide Annexure A to this submission. The above statistics clearly shows that the cash transactions effected by the assessee between 08/11/2016 to 12/11/2016 were in the regular course of business and therefore, treating the same as unexplained money is submitted to be unjustified, unwarranted and illegal. More significantly after the deposit of Rs. 28,00,000/- in old currency upto 12/11/2016, the appellant has deposited a further sum of Rs. 1,51,90,000 from 13/11/2016 to 30/12/2017 in new currency, as apparent from the cash book filed' on 15/11/2019 which has been accepted by the lower authorities. " Please further appreciate the fact that, in spite of negligible cash in hand i.e., cash balance below Rs. 10,000, on sever....
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....nd in law, the Ld. AO has failed to apply principles of natural justice while passing the assessment order." Your Appellant submitted the following submissions before the Ld. CIT(A) as under: "In the instant case, the Ld. A.O. has passed an order u/s 143(3) of the IT. Act, without issuing a specific show cause notice (SCN) for addition of the concerned amount for the specific reason, and without considering the assessee's replies and evidence. Further, the assessee was not provided with any communication regarding the reply filed by him, informing him of whether the reply was discarded or not, before the thumping addition of Rs. 28,00,000/- was made to the income of the assessee for the relevant A.Y. As explained by the assessee vide the letter dated 21.12.2019, the sundry debtors are small vendors, or weekly market hawkers etc. and they make up 90% of the assessee's turnover. In the instant case, it is not possible for the assessee to obtain any identification of the debtors, as they form a part of the unorganised sector and are not very well informed of maintaining identity proof and maintaining books of accounts of their business. Furthermore, ....
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....ubmitted to be liable to be deleted. Grounds of 2^nd Appeal No. 8 For that the deposit of Rs 28 lacs having been made out of receipt of the same from the debtors of the appellant, the provisions of Section 69A were arbitrarily invoked and the addition of Rs. 28 lacs is liable to be deleted. Submissions: As submitted in the aforesaid paras, the cash deposited in the bank account of the appellant was out of cash sales and cash realization from trade debtors and the said cash receipts were duly shown in the books of accounts of the appellant. The Ld. AO, while framing the assessment, has neither pointed out any specific defects in the books of accounts maintained by the appellant nor rejected the books of accounts. In other words, the Ld. AO has accepted the book results of the appellant. Thus, the cash deposits made out of cash generated from cash sales &. realization from sundry debtors, which were duly recorded in the books of accounts, cannot be treated as un-explained money u/s 69A as the same have been already credited in the profit/loss account of the previous year and further, the same would amount to double taxation which ....
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....entions have been quoted by the Ld. CIT(A) in his appeal order but no findings/comments have been provided by the Ld. CIT(A) in respect of such submissions. In other words, the Ld. CIT(A) has not ascribed any reasons as to how the Ld. AO was justified in invoking Section 69A particularly when the appellant had recorded all the impugned transactions in his books and also provided sufficient explanation regarding the same. In view of the above, the action of the Ld. Lower authorities in making and confirming the impugned addition u/s 69A is submitted to be arbitrary, unjustified, unwarranted and illegal. d. Grounds of 2^nd Appeal No. 4 For that the Ld. AO (please read as Ld. Lower Authorities) erred in making thumping addition of Rs 28 lacs simply on the basis of allegation that the appellant had deposited the said sum using old currency denominations which were declared illegal/illegitimate tender by the Government of India and Reserve bank of India without parting with any such notification/order which was alleged to have been issued by Government of India and/or Reserve Bank of India and such action of the Ld. AO (please read as Ld. Lower Authorities) is....
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.... the Ld. AO. Further, on 21/12/2019, the appellant assessee through it's A.R. made detailed submissions regarding the source of such deposits and also provided cash flow statement from FY 2015-16 to FY 2018-19 to establish that the cash transactions in the impugned period is nothing but regular business transactions. In the said reply, the appellant also mentioned the circumstances which forced the assessee to accept the payments in SBNs. Please refer Page 42 to Page 46 of the paperbook. The said replies and evidences were totally ignored by the Ld. AO. Further, the Ld. AO only dealt with only 3 paragraphs of the reply filed on 21/12/2019 and ignored the balance submissions made by the appellant while deciding the merits of the case. The said action of the Ld. AO is submitted to be arbitrary, unjustified, unwarranted and illegal. g. Grounds of 2nd Appeal No. 7 For that the Ld. AO (please read as Ld. Lower Authorities) erred in making allegations of money laundering against the appellant even though the transactions of the appellant were duly explained and were in regular course of its business and such allegation of the Ld AO (please....