TaxTMI 
TaxTMI 
2024 (2) TMI 525
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....30.11.2017 declaring total income of Rs.. 12,96,820/-. The return was taken up for scrutiny under CASS and notice under section 143(2) of the Income Tax Act, 1961 ["Act" in short] was issued on 26.09.2018 and was served on the assessee. After considering the details furnished by the assessee, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 18.12.2019. 3.1 In the assessment order, the Assessing Officer has noted that the assessee has deposited demonetized currencies to the extent of Rs.. 2,31,20,500/-. The assessee had claimed that the cash balance available as per books on 08.11.2016 of Rs.. 2,43,45,612/- was the source for the said SBN deposits. The assessee claimed that the cash balance as on 08.11.2016 was the result of the cash sales for the months of October, 2016 and November 2016 (till 08.11.2016). However, on verification of the records, the Assessing Officer has noted that the opening cash balance as on 01.04.2016 was given as Rs.. 89,46,779/-. From the summary of cash flow furnished by the assessee, the Assessing Officer has noted that the cash balance as on 31.05.2016 was Rs.. 10,412/-. Thus, the opening cash balance was found un....
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....n 14.10.2016, 19.10.2016 and 20.10.2016 were noticed, the assessee firm itself had transferred the bullion stock into Gold jewels only on 30.10.2016 vide stock journal no.5. In this circumstance the negative stock figures are not explained. Further to the above the Stock negative figures are noticed on the period from 05.11.2016 to 28.11.2016 including the demonetized periods. And he negative stock of (-)2,614.009 gms was noticed on 08.11.2016. Though a Purchase of bullion from Axis bank for the value of Rs.60,58,049 (Quantity details not furnished) was noticed on 02.11.2016, during the periods prior to demonetization, the conversion of the same into Gold jewels was not furnished. Even assuming that the same was converted prior to 05.11.2016 and brought into Stock of Gold jewels, the negative stock is not fully wiped out. That is the closing stock as at 08.11.2016 is still a negative stock figure. f. No proper justification for substantial cash sales in October 2016 and November 2016 was provided by the assessee and No proof of delivery either through the signature of the customer or otherwise are produced. And no identity of the buyers (email or phone number or address) for ....
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....egister furnished online by the assessee for the GOLD JEWELS- 22Kt, it is seen that there are negative closing stock figures from 13.10.2016 to 29.10.2016. The peak of the same being (-) 5811.567 gms on 29.10.2016. The stock register furnished by the assessee is enclosed to this order as Annexure A. There cannot be a negative stock and in this case it only means that the sales are booked in excess of the stock or in other words the sales are bogus. Assessee had furnished the Purchase Gold bullion ledger (attached to this order as Annexure B), wherein it is seen that the Gold Bullions purchased from Axis bank limited are taken in to stock of Gold Jewels 22 kt on the same day of purchase. Normally the Gold bullion will take a minimum conversion period but in the case of assessee it was found that the entire bullion of about 5,432 gms and 3,259.200 gms were taken to Stock of Gold Jewels on the same day of purchase. (i.e. 12.05.2016 and 24.06.2016 respectively). For the rest of the periods the stock journals for accounting the conversion of Gold bullion into Gold Jewels were found passed as and when the same were received. Though purchase of Bullions on 14.10.2016, 19.10.2016 and 20....
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....ve stock. The issue of bunching of bills at the end of the month does indeed seem to be an error. As pointed out by the appellant. 3.7 The assessment order also points to the series of suspicious transactions is the cash sales which have taken place during October and the beginning of November 2016, and a comparison has been made as noted above. Undoubtedly, there has been a spike in the cash sales figures, especially for the month of October, however, the comparison runs the risk being negated very easily when compared with sales in the preceding and succeeding years, as no clear pattern emerges. 3.8 After considering all the submissions made by the appellant and the points raised in the Assessment Order, it is seen that there was always adequate stock available with the appellant and sales, as shown, could have been made. It is seen further that while the frequency of cash deposits and purchases have increased during the impugned period the pattern of purchase of bullion and deposits of cash remains the same as in regular periods of business activity of the appellant. Therefore these cash sales and the credit to the books of accounts of the appellant and cannot be said to b....