TaxTMI 
TaxTMI 
2024 (2) TMI 1230
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.... Faceless Appeal Centre (NFAC), Delhi has erred both in law and, on facts in upholding the determination of income made by the learned Assistant Commissioner of Income Tax, Bhiwani of the appellant at Rs. 40,25,455/-as against declared income of Rs. 98,041/- by the appellant in an order of assessment dated 28.12.2019 u/s 143(3) of the Act. 2. That assumption of jurisdiction by the learned Income Tax Officer, Ward-1, Bhiwani to issue notice u/s 143(2) of the Act for the instant Assessment year was illegal, invalid and void-ab-initio and therefore consequently order of assessment for the instant assessment year is without jurisdiction and deserves to be quashed as such. 3. That the learned Commissioner of Income Tax (Appeals....
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....ppellant. 3.4. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once the purchases declared in the books of accounts were duly accepted then no subjective assumption and presumption could be made a basis to subjective assumption and presumption could be made a basis to assume, allege and conclude that sales made out of such purchases were unexplained money under section 68 of the Act. 3.5. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in recording various adverse inferences which are contrary to the facts on record, material placed on record and, are otherwise unsustainable in law and therefore, addition so sustained is absolutely unwarranted. ....
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....ustained the addition. 5. Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before this Tribunal. 6. Ld. Counsel for the assessee vehemently argued that authorities below failed to appreciate the facts in right perspective. The accounts of the assessee were not rejected. The assessee has stated the source of cash deposits was out of sales. The Assessing Authority has not given finding regarding sales being bogus. The Assessing Authority had also accepted the stock as disclosed in DVAT. Therefore, the addition made and sustained by Ld.CIT(A) is not justified. Ld. Counsel for the assessee submitted that the AO however, accepted the opening balance for the month of October, 2016. He contended that the cash sales hav....
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....and circumstances of the case, it can be safely inferred that the AO has accepted the sales of the assessee. The natural corollary would be that AO accepted the sales made in cash also. Hence, the source of cash deposits ought to have been treated as explained. Further, the AO has not commented on purchases. Undisputedly manufacturing and trading activity would be based on sale and purchase. If the purchases are treated as genuine and stock is also accepted then treating the sales as bogus is not logical. The Ld.CIT(A) sustained the finding of the AO by observing as under:- 7.0. "I have gone through the assessment order and the submissions made by the AR of the appellant. Ground no.1 & 3 are relating to addition of cash credit of R....
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.... The total cash deposited during the immediately preceding year(AY 2015-16) was Rs. 1.72 crore as against that during the impugned AY the cash deposited is Rs. 2.96 crores which is an increase of 71.57% which is quite huge. The appellant has stated that he has received cash from sundry debtors but he has not filed any confirmations from sundry debtors that they had paid the amounts to the appellant prior to the date of demonetisation. As per the RBI Guidelines issued after demonetisation, only selected banks and other establishments like hospitals, petrol stations, railways, state transport etc. were only allowed to accept the demonetised notes. The appellant is not falling in any of these categories notified by the RBI to accept the demone....