TaxTMI 
TaxTMI 
2023 (12) TMI 30
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....46A of the I.T.Rules? 2) Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in re-estimating the sales for period Jan/Feb 2021 s well as reduction in GP on the basis of details furnished by the assessee, without confronting the same to the Assessing Officer and without appreciating that the same was not logical ? 3) Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in giving relief to the assessee on the issue of GP estimation and the sales estimation? For the above grounds and any additional grounds that may be agitated during the course of hearing it is prayed that the order of the Ld.CIT(A)-2, Panaji may be quashed and that of the AO restored." 3. The assessee in its CO has raised the following grounds:- "1. The order of the learned authorities, in so far as it is against the Respondent/ Cross Objector is opposed to law, equity, weight of evidence, probabilities natural justice, facts and circumstances of the case. 2. The order passed by the learned Commissioner of Income Tax [Appeals] is just and proper in so far as it is favorable to the Respondent/ Cros....
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....advised to prefer an appeal. Subsequently, while seeking professional consultation in a different matter, it was strongly advised to challenge the balance amount of addition insofar as application of section 115BBE of the Act in the form of Cross Objection. Accordingly, this CO came be to be filed by the assessee with a delay. Relying on the Hon'ble Apex Court decision in the case of Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 471 and other cases, it was prayed that the delay in filing the CO may be condoned. 5. After hearing both the parties, we note that there was reasonable cause for filing CO before the Tribunal by the assessee and following the above decision relied on by the assessee in this regard, we condone the delay in filing the CO by the assessee. 6. The sole and substantive issue emerging out of appeal and the CO is estimation of sales of the assessee and addition u/s. 69A in the light of cash seized of Rs. 1.48 crores. The brief facts of the case are that assessee is an individual and is a trader in gold and silver form of jewellery, ornaments, utensils, bullion etc., operating his business in the name and style of M/s Padmavathi Gold in Kal....
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.... on 03.11.2021 and in response assessee filed reply on 13.11.2021, the relevant portion of the reply is as under:- " The cash found and seized in my possession of Rs. 1.48 Crores is out of regular business sales of gold, silver articles and jewellery. The same is duly evidenced from the sales bill furnished by me before the ADIT (Inv), Gulbarga in response to the summons issued u/s 131 of the Act pursuant to initial statement recorded on 06/02/2021. Further, I have already furnished GST returns filed by me for the aforesaid period whereby the safes reflected above is matching with the sales as per the books. It may not be out of place to mention that I have already furnished cash book in Annexure 3 above, whereby it can be seen that I was in possession of the cash in hand in my books on the date of the seizure of cash in the month of February, 2021. Therefore, I strongly object to the proposition of treating the amount of cash seized as income u/s section 69A of the Act, as the source is duly furnished along with corroborative evidence in this regard." 10. The AO noted that the assessee initially stated in the statement recorded u/s. 132 on 06.02.2021 that the ....
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....d Rs. 17,36,480 on estimate as actual and genuine sales from the period from 01.01.2021 to 4.2.2021 and the balance amount of Rs. 1,30,63,520 (1.48 cr (-) 17,36,480) was treated as unexplained money and brought to tax u/s. 69A and charged to tax u/s. 115BBE of the Act. 12. Before the CIT(Appeals), the assessee filed written submissions dated 03.11.2021 which is reproduced in the CIT(A)'s order. The assessee submitted written submissions computing the average sale for Jan. 2021 to 4.2.2021 and submitted that the average grown rate on simple average basis works out to 46% for each of the years starting from Jan. 2014 over Jan. 2013 to Jan. 2019 over Jan. 2018. Thus, the overall sales from 1st Jan. 2021 to 4.2.2021 considering the earlier trends works out to 2,085 grams i.e., Rs. 89,06,634 (excluding GST) and Rs. 91,73,833 (including GST). The CIT(Appeals) computed estimated value of sales at Rs. 91.73 lacs as against Rs. 17.36 lacs by the AO and limited the addition u/s. 69A to Rs. 56,26,167 as against Rs. 1,30,63,520 by the AO. Accordingly, the CIT(Appeals) also adopted Rs. 25,17,995 as regular business income during the year. Aggrieved, both the revenue and assessee are in appea....
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.... 23.03.2022 for the A.Y. 2015-16 to 2019-20 and dated 31.03.2022 for the A.Y. 2020-21 wherein the returned income was accepted by the AO. ............ 14. The assessee submits the following with respect to each of the grounds raised by the revenue for the kind consideration of this Hon'ble Tribunal. 15. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in estimating the sales of the assessee for the part period on the basis of additional evidence filed by the assessee during appellate proceedings without following the procedure laid down in Rule 46A of the I.T. Rules? Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in re-estimating the sales for period Jan/Feb 2021 as well as reduction in GP on the basis of details furnished by the assessee, without confronting the same to the assessing officer and without appreciating that the same was not logical? a) The assessee is a wholesaler and retailer in gold and silver articles. The Deputy Superintendent of Police had intercepted a vehicle on 05.02.2021 and seized cash of Rs. 1.48 crores. The information was passed on to the....
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....21 to 04/02/2021 and given credit accordingly to the said extent, and balance amount of Rs. 1,30,63,250/- [Rs. 1,48,00,000/- (-) Rs. 17,36,480/-] is treated as Unexplained Money and brought to tax u/s 69A of the act, and charged to tax u/s 115BBE of the act." e) The assessee submits that the above estimation of the alleged actual/ genuine sales was done without giving the assessee an opportunity to make any submissions with respect to the same. f) Before the CIT(A), the assessee, inter alia, contended that the estimation of sales for the period 01.01.2021 to 04.02.2021 by the AO is without considering the prevailing gold rates for the year, stock in hand, impact due to Covid-19 pandemic, etc. g) The assessee made detailed submissions with respect to the estimation of sale vide written submissions dated 03.11.2021 which is available at Pages 71 - 281 of the paperbook. The relevant portion of the written submissions are reproduced by the CIT(A) at Para 4.18 of the order and are available at Page 81 of the paperbook. h) The assessee's contention before the CIT(A) with respect to the estimation is summarized as follows - i) Increase in rate ....
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....s, average rate per gram and amount of sales for the month of January 2013 to 2019. v) Average sales growth for the month of January based on the above tabulated data. k) Based on the above details and similar to the principle adopted by the Assessing Officer to estimate sales based on earlier year trends, the CIT(A) has computed the quantity of sales for the period of 01.01.2021 to 04.02.2021 to be 2,085 grams and applying the average rate per gram of Rs. 4,272 per gram and arrived at estimated actual/ genuine sales for the period 01.01.2021 to 04.02.2021 at Rs. 89,06,634/- (excluding GST) and at Rs. 91,73,833/- (including GST) as against the sales estimated by the AO of a sum of Rs. 17,36,480/-. l) Accordingly, the CIT(A) has restricted the addition to Rs. 56,26,167/- (Rs. 1,48,00,000/- less Rs. 91,73,833/-) as against the addition made by the AO of a sum of Rs. 1,30,63,520/-. m) The assessee submits that all the details available with the CIT(A) for the purpose of estimating the sales during the period 01.01.2021 to 04.02.2021 at a sum of Rs. 91,73,833/- were available with the AO as well and consequently the question of the said details being....
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....hich are pertaining to the computation of the estimated sales during the period 01.01.2021 to 04.02.2021 in the paperbook filed by the assessee. The comparative chart with page numbers references to the paperbook filed before the Tribunal below clearly demonstrates that most of the details furnished before the CIT(A) which aided the CIT(A) in computing the estimated sale of Rs. 91,73,833/- were already available with the AO. Details furnished to the AO Page No. reference to the paperbook Details furnished to the CIT(A) Page No. reference to the paperbook VAT monthly and annual Return (A.Y. 2015-16) 516 - 542 VAT monthly and annual Return (A.Y. 2015-16) 311 - 337 VAT monthly and annual Return (A.Y. 2016-17) 568 - 594 VAT monthly and annual Return (A.Y. 2016-17) 345 - 371 VAT Monthly and annual Return (A.Y. 2017-18) 619 - 645 VAT Monthly and annual Return (A.Y. 2017-18) 378 - 404 VAT Monthly Return - upto Jun 2017 & GSTR-3B from Jul 2017 (A.Y. 2018-19) 674 - 709 VAT Monthly Return - upto Jun 2017 & GSTR-3B from Jul 2017 (A.Y. 2018-19) 415 - 450 GST Monthly returns Filed (A.Y. 2019-20) 756 - 791 GSTR-3B Monthly retur....
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....efore, the computation of sales for the period 01.01.2021 to 04.02.2021 is an estimate. Both the authorities have estimated the sale and they have chose to estimate the sales in a different manner based on the same details furnished to them. However, the estimate by the CIT(A) is a more realistic estimate considering various factors which are prevalent in the assessee's line of business. When it is just a difference in the method of estimation, the question of any details furnished before the learned CIT(A), being additional evidence does not arise. The details furnished to the CIT(A) are just to aid the CIT(A) in computing the estimated sales in a realistic manner which the learned AO failed to do despite having the same materials. v) Without prejudice, the assessee submits that in the instant case the details were furnished on the direction of the learned CIT(A) which is evident from Para 4.19 of the order of the CIT(A). The assessee had initially vide submission dated 03.11.2021 submitted that the estimation of sales of Rs. 17.36 lakhs is completely erroneous and unrealistic going by the market trends and the circumstances of the business on account of Covid-19 pandemic....
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....ITD 293 (Mum. - Trib.) y) The assessee submits that it is a settled position of law that the power of the CIT(A) is plenary and is co-terminus with that of the AO in as much as the CIT(A) can do what AO can do and also what the AO failed to do. The appellant places reliance on the decision of the Hon'ble Supreme Court in the case of CIT v. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) and Jute Corporation of India Ltd. v. CIT (1991) 187 ITR 688 (SC). z) Without prejudice, the assessee submits that the revenue has not brought anything on record to state that the estimation of the sales done by the CIT(A) is not sustainable. aa) In view of the above, the assessee submits that the question of the evidence produced before the learned CIT(A) being termed as additional evidence does not arise and consequently the assessee prays this Hon'ble Tribunal to dismiss the grounds raised by the revenue in this regard. 16. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) was correct in giving relief to the assessee on the issue of GP estimation and the sales estimation? Estimation of sales a) The details of computation....
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....the assessee submits that the learned AO has resorted to estimation of the sale without rejecting the books of accounts which is impermissible in law. i) In view of the above, the assessee submits that the estimation done by the learned CIT(A) is a realistic estimate taking into consideration various factors which affect the business of the assessee. Consequently, the assessee humbly prays this Hon'ble Tribunal to dismiss grounds raised by the department in this regard. " 15. The ld. AR further submitted that during the course of assessment proceedings all the documents were submitted by the assessee as per questionnaire issued by the AO u/s. 142(1) which is clear from the assessment order at para "5" and the same documents were produced before the CIT(Appeals). During the appellate proceedings, the assessee submitted only the data from Jan. 2013 for establishing that the assessee is engaged in the same line of business and the annual growth rate achieved by the assessee. Only medical certificate for the previous year was submitted because he was not well and the assessee could not perform his activities properly. Therefore there was no additional evidence produced by t....
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....f his own savings, family savings and loans. The assessee appeared before the ADIT(Inv.) on 11.02.2021 and stated that cash found of Rs. 1.48 crores is out of sales for the month of Jan. & Feb. 2021 (upto 04.02.2021) and in support of this he produced cash book, purchase register, purchase bills, sales register and sales bills for FY 2017-18 to AY 2019-20 and upto 4.2.2021. During assessment proceedings, the assessee submitted the details as stated by the AO in para 5 of his order as under:- "5. In response to notices issued, the assessee has filed Copy of ITR-V with Statement of Computation of Total Income and Statement of Accounts ie., Profit & Loss Ale and Balance Sheet, Note on nature of business activities and sources of income, List of Bank accounts, Loan accounts with account extracts, Monthly Purchases & Sales, Cash Book, Copy of F.No.26AS, Copy of monthly GST and Annual returns, Purchase and Sales Registers for the year, Statement of total turnover and Gross Profit declared for the Asst. Years - 2015-16 to 2021-22, Copy of Stock Register along with Valuation of Opening & Closing Stock, List of Unsecured Loans with letters of confirmations, List of Sundry Creditors....