TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 259
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....nt. The assessee prays that the addition of Rs. 21,00,000/- made u/s 68 be deleted. 2) On facts and in the circumstances of the case, CIT(A) has erred in confirming addition of Rs. 21,00,000/- made by the Assessing Officer under section 68 by treating cash (SBN) deposited during demonetization period as unexplained cash credit especially when the assessee's books of account have not been rejected and all the income and expenses and the book results have been accepted except the cash deposit without there being any iota of evidence, which would point out that the assessee had deposited his unaccounted money under the garb of sales. The assessee prays that the addition of Rs. 21,00,000/- made u/s 68 be deleted. 3) On facts and in the circumstances of the case, CIT(A) has erred in confirming addition of Rs. made by the Assessing Officer under section 68 by treating cash (SBN) deposited during demonetization period as unexplained cash credit by drawing his own presumption about availability of cash with the assessee by sitting on the chair of businessman on mere surmise and conjectures without duly appreciating the undisputed fact that he himself has accepted the books of accou....
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....ading of mobile phones and other electric gadgets. Return of income for assessment year 2017-18 was filed by the assessee on 02.11.2017, declaring a total income of Rs. 66,81,920/-. Subsequently, the case of the assessee was selected for scrutiny through 'CASS', under the category 'Complete Scrutiny'. Statutory notices u/s 143(2), 143(1) a/w questionnaire have been issued and served to the assessee. In response, the assessee has filed his submissions, which were considered and placed on record. While going through the submissions of the assessee, Ld. AO observed that the assessee during the demonetisation period have deposited an abnormal cash of Rs. 21,00,000/-,considering the average deposit before demonetisation vs. actual deposit done by assessee during the demonetisation period. The assessee was required to file the replies submitted that source of cash deposit during the demonetization period was genuine which according to Ld. AO, the assessee was failed to do so also Ld. AO observed that the books of accounts of the assessee are manipulated. Which such observations considering an abnormal which may be in cash in hand in the books of assessee as unaccounted in....
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..... 9,19,774/- whereas opening cash in hand as on 01.04.2016 has been shown at Rs. 16,23,399/-. As held by the AO, such type of cash flow is not reliable. Explaining the methodology in the statement of facts for preparing such cash flow statements also reveal that the cash flow statement filed by the assessee is not reliable. Therefore, the other factors which needs to be considered is cash sales shown for the period just prior to announcement of demonetization and the remaining period of the year. The cash flow filed by the assessee reveals monthly cash sales of Rs. 13,52,203/- for the month of October 2016 and cash sale of Rs. 7,33,626/- for the period 01.11.2016 to 08.11.2016. Total cash sales claimed in the cash flow for the period 01.10.2016 to 08.11.2016 is Rs. 20,85,829/- whereas the cash sale for the whole year excluding the period from 01.10.2016 to 08.11.2016 is found at Rs. 14,98,209/-. Thus, the cash flow statement showing abnormally high sales in October 2016 and in the period from 01.11.2016 to 08.11.2016 is highly inflated just to explain the availability of cash in hand during the demonetization period. Considering the entirety of facts and circumstances of the case, ....
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....ot rejected by AO. Profit arising out of sales returned and assessed by the AO. Credits for cash accruals could not have denied. 11. Profit from sales already taxed by AO. Adding cash deposits amounts to double addition. Reliance on: - - CIT vs Kailash Jewellery House in ITA no. 613/2020, order dt. 09.04.2010 of Delhi High court, PN 112 of PB. - Anantpur Kalpana vs ITO in ITA no. 541/Bang/2021 dt. 13.12.2021, PN 113 to 120 of PB, relevant finding at PN 117. - ACIT vs Vishal Exports Overseas Ltd. In ITA no. 790/Ahd.//2005 order dt. 07.08.2009, "C" Bench, affirmed in ITA no. 2471 of 2009 vide order dated 03.07.2012. 12. Closing stock disclosed by assessee accepted by the AO. On one hand, the AO disputed sales and on the other hand, he accepted the disclosed closing stock. 13. On 28.09.2019, assessee filed monthly cash flow statement of FY 2015/16 & FY 2016/17 but in such cash flow cash receipts & cash payments made were not included due to which there was mismatch in cash balance as on 31.03.2016 & 01.04.2016. The assessee filed corrected cash flow statement & day to day cash book before AO. Ground no. 5 & 6 AO : Tax levied @ 60% Submission of assessee Amount added ....
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....g judgments: - Lalchand Bhagat Ambica Ram vs CIT (1959) 37 ITR 288 (SC), PN 130 to 145 of PB. In the case of Lalchand Bhagat Ambica Ram Vs. CIT [1959] 37 ITR 288 (SC), the Hon'ble Apex Court decided the matter in favour of assessee of the ground that it was clear on the record that the assessee maintained the books of accounts according to the mercantile system and there was sufficient cash balance in its cash books and the books of account of the assessee were not challenged by the Assessing officer. If the entries in the books of accounts are genuine and the balance in cash is matching with the books, it can be said that the assessee has explained the nature and source of such deposit. - ACIT vs Hirapanna Jewellers (2021) 189 1TD 608 (Vishakhapatnam), para 9, PN 121 to 129 of PB, relevant finding at PN 126 & 128. 9. In view of the foregoing discussion and taking into consideration of all the facts and the circumstances of the case, we have no hesitation to hold that the cash receipts represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to effect the sales and we do n....
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....ed that when the purchases were accepted, the respective sale cannot be doubted. The addition u/s 68 of the Act cannot be made in respect of the amount which were found to be properly recorded into the books of accounts and no negative inference towards such transactions in the books of accounts were drawn by the revenue. We are drawing guidance from the case laws referred to hereinabove wherein it is clearly held that any addition on account of treating the sale of the assessee as bogus without rejecting the books of accounts is unjust, unfair and bad in law. Respectfully following decisions relied upon, we are of the considered opinion that in the circumstances when the assessee has sufficient opening cash balance at the time of pronouncement of demonetization which was not disputed by the department, if the same is being deposited by the assessee in its bank accounts, the same cannot be treated as unexplained or bogus unless any contrary observations borne from available records or otherwise brought on by the revenue against the assessee. Ld. CIT(A) has appreciated the facts of the case, considered all the aspects correctly and has appropriately allowed the appeal of the assesse....
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....om him can be understood but the basic fact should not have been forgotten by the AO that he should also have tried to confirm at least from sales account viz-a-viz the bank account of the assessee. After import of the silk yarn assessee has not consume the whole imported silk. He had sold to various weavers and they may not be in the position to furnish the details of contact because of beggaries of the occupation. In my considered view the deposits in the bank appearing as HEFT and RTGS and cash represent the sale proceeds from various sundry debtors and the same is reflected in the sales account. The addition made by the AO is hereby-s deleted. The ground of appeal is allowed. (Relief Rs. 522,81,663/-)" After having given a thoughtful consideration to the aforesaid observation of the CIT(Appeals), we find no reason to take a different view. At this stage, we may herein observe that it is a matter of fact borne from record that the assessee had duly accounted for the aforesaid amount of Rs. 5,22,81,663/- as his sale proceeds for the year under consideration. As observed by the CIT (Appeals), it is a matter of fact borne from record that the assessee had imported silk yarn from....
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..... 13.12.2021, PN 113 to 120 of PB, relevant finding at PN 117. - ACIT vs Vishal Exports Overseas Ltd. In ITA no. 790/Ahd.//2005 order dt. 07.08.2009, "C" Bench, affirmed in ITA no. 2471 of 2009 vide order dated 03.07.2012. 9. It is further debated by the Ld. AR that the closing stock disclose by the assessee was accepted by the Ld. AO on one hand and the sale was disputed on the other hand. 10. In terms of aforesaid arguments by the Ld. AR it is the submission that the addition made by Ld. AO u/s 68 of the Act and confirmation of the same by Ld. CIT was bad in law specially when the Assessee's books of accounts have not been rejected and all the income and expenses recorded in such books of accounts which were the basis of arriving at the returned income were not disputed, therefore, the order of Ld. CIT(A) is liable to be set aside and the addition made by the Ld. AO deserves to be deleted. 11. Ld. Sr DR on the other hand vehemently supported the orders of Revenue Authorities. 12. We have considered the rival submissions, perused the material available on record and case laws relied upon by the assessee. On perusal of the facts of present case, order of the Ld. AO and Ld....
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....goes against the mandate of law, which says that once the books of accounts of the assessee are accepted by the revenue, thereby recognized the sale of the assessee and by accepting the returned income, the profit generated from such sale was also accepted by the department. The cash received which was disputed by the department and the addition was made by triggering the provisions of section 68 was also included in such accepted sale by the department, under such facts and circumstances addition u/s 68 without rejecting the books of assessee is not justified, similar issue was dealt with and decided by this tribunal in the case of ACIT vs. Nitin Sankhla in ITA No. 98/RPR/2020 order dated 08.06.2023, wherein the appeal of the department was dismissed on account of treating the sale of the assessee as bogus without rejecting the books of accounts of the assessee. In present case, since there was a difference in closing and opening cash balance in the Assessee's cash flow statement, which was observed by both the revenue authorities, also the assessee was unable to substantiate with supporting documents like sale bills and details of debtors that the cash deposited was received ....