TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 399
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....f trading of all types of fancy fireworks, crackers and sparkles, etc. which are mostly sold during the time of festivals i.e. Dussehra and Diwali, etc. It is submitted that in the financial year 2016-17 relevant to the assessment year 2017-18 which is under consideration Diwali was celebrated on 30.10.2016 and the assessee collected the payments from customers and also made cash sales in counter and subsequently arrange to deposit into bank. The assessee furnished copy of cash book in support of the submissions. 3. Not convinced with the submissions, the AO treated the cash deposits of Rs. 69,25,000/- as an unexplained income u/s 69A of the Act observing that the assessee did not disclose the bank account in bank of India where cash deposits were made to the extent of Rs. 69,25,000/- in the return of income filed. The AO also observed that the assessee neither furnish the stock summary nor furnished the bill and voucher in support of purchases. It is also the observation of the AO that the assessee did not deposit the cash in hand in the bank account immediately but was deposited the cash collected much later to the date of demonetization. Therefore, the explanation of the assess....
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....el for the assessee also placed reliance on the following decisions in support of the above submissions: - 1. Shubham Industries Vs. ACIT (ITA No.1612/Del/2021) (Del); 2. Sobha Devi Dilipkumar Vs. ITO (160 taxmann.com 1249) (Vishakhapatnam); 3. Rachit Aggarwal (Prop.) Ashok Kumar Gupta & Company Vs. ITO (162 taxmann.com 49) (Chandigarh); 4. ITO Vs. M/s Zee Bangles Pvt. Ltd. (ITA No.815/Mum/2022 dated 18.07.2023) (Mum.); 7. Ld. Counsel for the assessee further referring to the case law relied on by the Ld.CIT(A) submits that the case laws relied on by the Ld.CIT(A) are distinguishable on facts and not applicable to the facts of the assessee's case. 8. Ld. DR strongly supported the orders of the authorities below. 9. Heard rival submissions, perused the orders of the authorities below and the material placed before us. The legal issue raised by the assessee is whether the addition can be made u/s 69A of the Act in respect of cash deposits even though the same were recorded in the books of account. It is the contention of the Ld. Counsel for the assessee that assessee recorded the cash deposits made into bank account in its books of account and the same were audited and tax....
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....of the Income Tax Act which was also furnished with the return of income filed by the assessee. The assessee has demonstrated from the purchase books, sale books cash book supported with relevant invoices that source of cash deposited was out of the cash sales made during the A.Y. relevant to the assessment year under consideration. The Id. Counsel has also placed reliance on a number of judicial pronouncements on the proposition that addition u/s 69A of the Act cannot be made i.e. Lalchand Bhagat Ambica Ram Vs. CIT (1959) 37 ITR 288 (SC); Lakshmi Rice Mills Vs. CIT (1974) 97 ITR 258 (PAT); DCIT Vs. M/s Karthik Construction Co. ITA No. 2292/Mum/2016. 10. After considering the facts as discussed above, we find the AO has failed to justify in applying section 69A to the case of the assessee when the assessee itself declared the cash sales in its return of income duly recorded in the audited books of accounts maintained by the assessee. Therefore, the CIT(A) has correctly held that provision of Sec. 69A of the Act cannot be applied in respect of cash deposited which have been duly recorded in the books of account and had already been declared income in the return of income filed by ....
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.... of section 69A are not applicable in the present case of the assessee as the cash deposits during the demonetization period are duly recorded in the assessee's books of accounts holds good. I have also considered the decision of the Division Bench of this Tribunal in the case of Sri Tatiparti Satyanarayana (supra) wherein the Tribunal held that the provisions of section 69 cannot be invoked when the assessee has disclosed investment in the books of account and in the computation of income which was offered for taxation. Considering the above facts and circumstances of the case, I find force in the arguments of the Ld. AR and accordingly I direct the Ld. AO to delete the addition made on account of unexplained money amounting to Rs. 27,50,000/- since the provisions of section 69A are not applicable in the case of the assessee. It is ordered accordingly." 11. We observe that even on a plain reading of the provisions of Section 69A of the Act it is very much clear that this provision can be invoked only "wherein any financial year the assessee is found to be the owner of the money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable articl....
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.... made into bank account. 16. In the case of Shravan Kumar Sharma the facts before the Hon'ble Gujarat High Court was that the assessee declared income from salary and interest and was found in possession of certain cash and the explanation of the assessee that the said cash belong to his business transactions could not be proved by the assessee. The question before the High Court was not with regard to whether the addition can be sustained u/s 69A of the Act when the cash deposits were recorded in the books of account by the assessee. The assessee also could not prove with any evidence to establish and substantiate his case that he was also in the business of trading activities of art silk cloth. The assessee has never maintained any books of account. 17. Similarly, in the case of Bhagwan Dass D. Vachani Vs. ACIT the facts before the Hon'ble High Court of Gujarat was that the assessee (HUF) was found deposited cash in bank account and the assessee failed to establish any co-relation between the goods sold and the cash deposited into bank account. It is also the finding in this case that the assessee (HUF) never maintained any books of account. Thus, we find that the decisions rel....