TaxTMI 
TaxTMI 
2023 (8) TMI 1491
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.... case and in law, the ld. NFAC erred in confirming the addition of Rs. 53,21,482/- in the hands of the appellant under section 68 of the Income Tax Act, 1961 on account of unexplained cash deposits without appreciating the fact that the same would lead to double taxation of the same income which was already offered and is unjust to the appellant. 3. The appellant craves leave to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal and requests to consider each of the above grounds without prejudice to one another." 2. Brief facts of the case are that the assessee is a company, engaged in the business of rough and polished diamonds. The assessee in its audit report has shown revenue from operation at Rs. 257.87 crores. The assessee while filing return of income on 17/10/2013 declared income of Rs. 1,32,546/- for A.Y. 2017-18. The case was selected for scrutiny. During the assessment, the Assessing Officer noted that during demonetization period between 09/11/2016 to 30/12/2016, the assessee made cash deposit of Rs. 56,35,000/- in four different bank accounts i.e. two bank accounts with UCO bank, third bank account with United Bank of Indi....
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....only, against the total sale of Rs. 257.87 crores. On the question of Assessing Officer about the name and address of purchasers, the assessee explained that the cash sales was within the prescribed limit of below Rs. 2.00 lacs wherein keeping of such record is not mandatory. For the G.I certification, the assessee submitted that such certification is required for the diamond above 0.50 carrot. The assessee sold smaller size of diamonds, where no grading of diamond is required. The assessee made genuine business sales. All sales are matching with the quantitative details as shown in the invoices. 4. The reply of assessee was not accepted by the Assessing Officer. The Assessing Officer noted that no such cash sales were reported in earlier years and the submission of assessee is mere an afterthought story. The diamond market remains close after Diwali for 15 days. Thus, it was surprising that how the assessee managed such customers. No quality and quantity wise details traded during the impugned period was furnished for verification. It could not be ascertained whether it was actually out of sales or it was out of undisclosed income of assessee. The assessee has not furnished any....
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....f cash deposit will tantamount to double taxation in the hand of assessee. 6. The ld. CIT(A) after considering the submission of assessee held that on announcement of demonetization of old currency notes of Rs. 500/- and Rs. 1000/-, the legal tender of such notes was allowed till midnight of 15th December for using for limited (various) purposes, some of which were summarized by him in para 4.2 of his order. The ld. CIT(A) noted that commodity of diamonds does not find place in such list prescribed by Government of India. Thus, acquiring of diamond on payment of cash were prohibited in law and nobody ventured to pay cash and acquired diamond after declaration of demonetization by Government of India. Further the claim of assessee about the sale of its stock in cash from September, 2016 to November, 2016 is improbable and is not acceptable and upheld the addition made by Assessing Officer as well as taxing the addition under Section 115BBE of the Act. Further aggrieved, the assessee has filed present appeal before the Tribunal. 7. We have heard the submissions of the learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (....
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.... all the impugned sales are below Rs. 20,000/- and such entry is nothing but based on concocted and imaginary story, which is nothing but self-serving theory propounded by the assessee. The assessee has no past history of making sales either on B to B model or B to C model, that too, in cash. The ld. Sr. DR for the revenue prayed for dismissal of appeal of assessee. To support his submission, the ld. Sr. DR for the revenue supported the decisions Hon'ble Supreme Court in the case of CIT Vs Durga Prasad Morey (1971) 82 ITR 540-SC and Sumati Dayal Vs CIT (1995) 214 ITR 801/80 Taxman 89-SC. 9. We have considered the submissions of both the parties and perused the record carefully. We have also perused all the details filed by the assessee in his paper book. We have also deliberated on various case laws relied by the ld AR for the assessee. The assessing officer made addition of Rs. 53,21,482/- by taking view that the assessee claimed that the cash deposits during the demonetization was generated on cash sales, no such cash sales were reported in earlier years and the submission of assessee is mere an afterthought story. The assessing officer also held that diamond market remains cl....