2023 (12) TMI 1126

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....Tax Act, 1961 (the Act) dated 03/12/2019. 2. Brief facts of the case are that the assessee is engaged in the business of Trading in Electronic Goods and e-filed its return of income for the AY 2017-18 on 12/09/2017 declaring an income of Rs. 5,900/-. The return was processed u/s. 143(1) of the Act wherein it was noted by the Department that the assessee has admitted total purchases of Rs. 21,14,949/- and a very huge sales during the year. A search and seizure operation was conducted in the case of M/s. Laxmi Remote Group (LRIPL) wherein it was found that this company has made cash sales to the assessee (Ajay Electronics) to the tune of Rs. 1,12,27,707/- during the FY relevant to the AY 2017-18. Therefore, the assessee's case was taken up f....

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.... appeal, it was contended before the Ld. CIT(A)-NFAC that the Ld. AO is not correct in making addition of the total purchases of Rs. 1,12,27,707/-. If at all the addition is to be made, only the profit element involved in the sales should be taxed as income of the assessee. The assessee also pleaded before the Ld. CIT(A)-NFAC that the income may be estimated @ 8% of the total sales. However, the Ld. CIT(A)-NFAC overlooking the argument of the assessee, deleted the entire addition made by the Ld. AO. Aggrieved by the order of the Ld. CIT(A)-NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds of appeal: "1. The Ld. CIT(A) erred in deleting the addition made of Rs. 1,12,24,707/- u/s. 69A r.w.s 115BBE of the Ac....

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....he appeal of the assessee has ignored the fact that the transactions unearthed by the investigation unit were intentionally not recorded by the said company M/s. Laxmi Remote (India) Pvt Ltd in the Books of account that were shown to various Govt. Agencies and were maintained secretly in another software IVMS. Similarly, in the instant case, it is clearly evident that the assessee also did not bring such transactions into the books of account produced before the income tax authority with a motive of hiding the facts to evade taxes. 5. The Ld. CIT (A) has also erred in not appreciating the fact that the assessee did not produce any evidence / material like confirmation from M/s. Laxmi Recmote (India) Pvt Ltd with regard to the transactions....

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....held. The Ld. DR vehemently argued in support of the decision taken by the Ld. AO. On the other hand, the Ld. Authorized Representative reiterated the submissions made before the Ld. CIT(A) and supported the decision taken by the Ld. CIT(A). 5. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. In the instant case, there is no dispute on the cash purchases worth Rs. 1,12,27,707/- made by the assessee. The grievance of the Revenue is that since the assessee has not properly explained the sources for the cash purchases of Rs. 1,12,27,707/- the decision of the Ld. AO by making an addition u/s. 69A of the Act treating it as unexplained cash holds good and therefore t....