TaxTMI 
TaxTMI 
2024 (2) TMI 325
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....s. 3. The first issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of cash deposit of Rs. 50 Lakh as unexplained cash credit under section 68 of the Act. 4. The facts in brief are that the assessee is an individual who claimed to be engaged in the business of trading of gold and silver items under the name and style of M/s Adheshwer Jewelers. The assessee during the demonetization period (08th November 2016 to 31st December 2016) deposited cash amounting to Rs. 50 Lakh in the bank account held with Yes Bank and UCO Bank. The details of the same stand as under: Sr.No. Name of Bank Name of the Bank Account No Date of Deposit Cash Deposit (In Rs. ) 1. Yes Bank 21563400000000153 11/11/2016 15,00,000/- 2. Yes Bank 21563400000000153 02/12/2016 10,00,000/- 3. Uco Bank 4090210003305 11/11/2016 15,00,000/- 4. Uco bank 4090210003305 02/12/2016 10,00,000/- Total 50,00,000 4.1 The assessee regarding source of cash deposit submitted that during the year under consideration, he started business of trading of gold and silver for which it rec....
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....ook VAT registration and filed VAT return only after scrutiny notice under the Act issued to him. 4.3 In view of the above finding, the AO held that the entire submission of the assessee showing cash deposits out of trading of gold and silver is camouflaged and afterthought. Therefore, the AO rejected the same. Accordingly, the AO treated the entire cash deposit of Rs. 50 Lakh as unexplained cash credit under section 68 of the Act and added to total income. 5. Aggrieved assessee preferred an appeal before the learned CIT(A) and reiterated the submissions made during the assessment proceedings. The learned CIT(A) after considering the facts in totality confirmed the addition made by the AO. 6. Being aggrieved by the order of the learned CIT(A) the assessee in appeal before us. 7. The learned AR before us filed paper book running from pages 1 to 275 and submitted that the business of the assessee was established 06-05-2016 which is evident from VAT registration certificate, placed on page 90 of the PB. The ld. AR also submitted that the cash was deposited in the bank out of the sale proceeds. The ld. AR in support of his contention has drawn our attention to the cash book....
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....e even the ld. CIT(A) has not dealt with any of the judgement relied upon the ld. AR of the assessee while dealing with the appeal of the assessee. 9.2 The ld. AR of the assessee vehemently submitted that law nowhere prohibits cash sales to the assessee. Assessee by selling the goods in cash did not violates any provision of the Income Tax Act and even the ld. AO has not mentioned any of the law provision to disbelieve the sales so made by the assessee. All the sales made by the assessee is supported by a commercial invoice duly complied with the value added tax (VAT) provision and the related VAT is also paid by the assessee. The invoices issued is also reported in VAT return filed and the sales has been accepted by the VAT authority without any adverse remark and in fact even the ld. AO has not made any adverse remark on the sales register and cash book submitted by the assessee to support the contentions of having been sold the goods/jewellery in cash. 9.3 The bench noted the ld. AR of the assessee has relied upon the various judgment and the some of the judgment which has direct bearing on the dispute and having similar facts are considered one by one in brief....
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.... sales of Rs. 1,86,45,067. Out of the total cash sales, cash sales amounting to Rs. 80,00,000 has been found to be nongenuine and added under section 68 of the Act. Explanation offered to substantiate the cash sales has been arbitrarily rejected without holding that the sales is duly recorded in the books and is also supported by the various records produced in the assessment proceedings. Here we note that similar view is taken in the case of CIT vs P. Mohanakala (2007) 291 ITR 278 (SC), the Apex Court while dealing with the true nature and scope of Section 68 of the Act has held that the opinion of the assessing officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The court further held that the opinion of the assessing officer is required to be formed objectively with reference to the material available on record. Hence, application of mind is sine qua non for forming the opinion. The only reason placed by the ld. AO in his order that the full name, address or/and PAN of the customer to whom goods were sold in cash during the course of....
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....lity, we hereby set aside the finding of the learned CIT(A) and direct the AO to delete the addition made by him. Hence, the ground of appeal raised by the assessee is hereby allowed. 10 The second issue raised by the assessee is that the Ld. CIT(A) erred in confirming the addition made by the AO for Rs. 4,65,000/- only on account of unexplained cash credit u/s 68 of the Act. 11. The AO during the assessment proceedings found that the assessee has shown loan of Rs. 4,65,000/- from the following parties. Sr.No. Name of lendor/depositor Amount 1. Adheshwar Finance Corporation 2,00,000/- 2. Chhajed Motors 50,000/- 3. K S Motors 2,00,000/- Total 4,65,000/- 12. The assessee in support of the above unsecured loan filed the copy of the confirmation and PAN of the parties. The assessee also submitted that the AO in the event of having any doubt can also call for the information by issuing notice u/s 136 of the Act from the loan parties. However, the AO was of the view that the assessee failed to establish the genuineness of the transaction and creditworthiness of the loan parties. Therefore, the AO treated the same as unexplained....
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....ee. From the above extracted finding of the Ld. CIT(A) and materials available on record, we note that the assessee has discharged the onus cast upon him by furnishing ledger confirmation from the creditor, their PAN, their copy of ITR, and their Bank statements. In our considered view, the identity of the creditor was duly established by furnishing their PAN, ITR and bank statement. Likewise, the genuineness of the transactions also got established by the fact that the transactions were carried out through banking channel which were duly reflecting in their respective bank statements and duly recorded in the books of account as loan which also confirmed by the creditor. The revenue authorities do not bring any material on record suggesting otherwise. The AO does not point out any infirmity the in the primary documents nor conducted direct investigation from the creditors/ parties by issuing notice u/s 133(6)/131(1) of the Act. Therefore, in such facts and circumstances we are of the view that the genuineness of transaction cannot be doubted. 13.2 Coming to the aspect of creditworthiness of the creditor who lent such sum to the assessee. In this regard, we note that the loan amo....