TaxTMI 
TaxTMI 
2023 (12) TMI 1348
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....the same may kindly be quashed. 1.2. The ld. CIT(A) has grossly erred in law as well as on the facts of the case in passing the Exparty order and confirming the order of the ld. AO without providing adequate and reasonable opportunity of being heard and not considering the material on record in the gross breach of natural justice. Hence the same entire addition may kindly be deleted and the assessment order may kindly be quashed. 2.1 Rs. 1,78,08,630/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 1,78,08,630/- made by the ld. AO on account of cash sales made before demonetization which was deposited in the bank account as alleged unexplained amount credited in the books u/s 68, also erred in invoking the provisions of Sec. 68 which is not invokeable in the present case . The Ld. CIT(A) and AO have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the ld. AO is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full. ....
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....for hearing. In response thereto, the AR of the assessee submitted the reply and furnished required details/documents through e-filing portal which placed on record. Further, on perusal of the submission filed by assessee, notices u/s 142(1) was again issued on dated 19.12.2019 to the assessee for necessary information / details from the assessee. In response thereto the AR of the assessee submitted his reply on ITBA Portal. The assessee is engaged in the business of all gold jewellery, watches etc. having retail showroom. The assessee has filed its return of income for the year under consideration declaring the total income of Rs. 29,09,080/- on dt. 26.10.2017. The turnover of the assessee for the year consideration is at Rs 23,98,45,370/- as against the turnover of Rs. 26,96,06,094/- in last year. 3.1 During the assessment proceeding the ld. AO noted that the assessee has deposited a sum of Rs. 2,25,82,742/- cash in the banks account during the period of Demonitisation. The assessee was required to produce the information in the a particular format for cash deposit, cash sales and cash balance so as to compare the same with the figures of AY 2016-17. The assessee submitted a r....
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....dger in support of its claim of the above cash sales. On verification of cash book the ld. AO noticed that the assessee is claiming sales of Rs. 1,00,33,680/- for only one day i.e. 8th November 2016. b) It is humanly impossible to sell goods worth Rs. 1,00,33,680/- in one day. The assessee's argument is that these sales were made after demonetization was declared at 8 pm. It is not possible to sale goods worth Rs. 1,00,33,680 in a span of 4 hours because old currency was not allowed to be accepted after 12 pm on 8th November, 2016. c) The assessee has sold goods to approx 107 People via separate bills. How it is possible that amidst such rush in the shop, the assessee could enter amount and weight and took a print out and got it signed by these 107 purchasers. How the assessee could manage to attend 107 people in 240 minutes! It is next to impossible. d) The assessee was asked to produce the bills for such sales. The same were produced but such bills are not verifiable. Generally, jewelers maintain a database of their customers with their complete address and contact number but here the bills do not contain proper name and address of the purchaser. In....
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....f Rs. 3.25 Cr in the month of October. So, sale for the month of October will not have effect on cash balance on 8th November which is claimed to be the source of cash deposited during demonetization. Therefore, average monthly cash sales booked by the assessee in the rest of the months i.e from April to September are considered as sales are considered as genuine sales. Average sales per month comes to Rs. 61 lac approx (rounded off) and accordingly excess sales booked by the assessee for the month of November at Rs. 17808630/- considering exorbitantly high and unprecedented. However, as discussed assessee's average monthly sales at Rs. 61 lac means Rs. 2 lac daily. So, for 8 days of November, sales of Rs. 16 lacs is considered to be genuine and excess sales i.e. Rs. 1,78,08,630 is considered as unexplained amount credited in the books of the assessee. As the assessee could not provide any satisfactory arguments for amount credited in the books, and thus considering the provisions of section 68 an amount of Rs. 1,78,08,630/- is considered as unexplained cash credits of the assessee. 4. Aggrieved from the above finding recorded in the order of the Assessing Officer, assessee ....
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....ined credit / money found credited in the books/bank accounts of the assessee. 7.1 The fundamental question involved is that whether or not the AO was justified in making the addition of Rs. 1,78,08,630/- under section 68 in the hands of the assessee, and the most critical thing to be examined in this regard is explanation of the assessee with respect to these credits. There is no, and there cannot be any, dispute on the fundamental legal position that the onus is on the assessee to prove 'bonafides' or 'genuineness' of the money credited in his bank account. This approach finds support from the scheme of Section 68/69, which provides that where any sum is found credited in the books / bank accounts of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, such sum may be charged to income tax as the income of that assessee for that previous year. The burden is thus on the assessee to prove the nature and source thereof, to the satisfaction of the Assessing Officer. Everything thus hinges on the e....
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....hase would be rarely available.....In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably". 7.7 An addition under Section 68 can be made where any sum is found credited in the books of account for any previous year, and the assessee either offers no explanation about the nature and source as regards the same, or the explanation offered by him in the opinion of the assessing officer is not found to be satisfactory. That before adverting further, the relevant extract of the aforesaid statutory provision, viz. Section 68, which reads as under: - "Cash credits. 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be ....
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....e as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. This is the settled position of law that a statutory provision has to be strictly construed and interpreted as per its plain literal interpretation, and no word howsoever meaningful it may so appear can be allowed to be read into a statutory provision in the garb of giving effect to the underlying intent of the legislature. 7.9 In a much-related case of identical facts of abnormally huge cash deposits in the bank accounts by a jeweller, the Hon'ble ITAT Hyderabad, 'B' Bench in the case of Assistant Commissioner of Income Vs M/s. Vaishnavi Bullion Private Limited in ITA Nos.560 & 561/Hyd/2020 and ITA 58 & 59/Hyd/2021, Hon'ble ITAT upholds the addition of about Rs. 100 Cr. as unexplained credit in the batch of appeals involving two jewellery and bullion dealers in the context of post-demonetisation cash deposits; 7.9.1 The Hon'ble ITAT rejects Assessee's submission of receiving cash from thousands of customers immediately after announcement of demonetisation. ITAT remarks, "The assessee either deposi....
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....r of the ld. CIT(A), prefer the present appeal on the grounds as reiterated here in above with this tribunal. To support the various grounds raised by the assessee ld. AR of the assessee filed a detailed written submission and the same is reproduced here in below : "FACTS: 1. The brief facts of the case are that the appellant-assessee is a Pvt. Limited and a regular I.T assessee. The appellant assessee is engaged in the business of all gold jewellery, watches etc. having retail showroom. The assessee has filed its return of income for the year under consideration declaring the total income of Rs. 29,09,080/- on dt. 26.10.2017. The turnover of the assessee for the year was of Rs 23,98,45,370/- as against the turnover of Rs. 26,96,06,094/- in last year. The case was selected for the scrutiny assessment. The ld. AO issued the notice U/s 143(2) on dt. 22.09.2018 in response thereto assessee has submitted the reply thereafter the ld. AO has issued the notice u/s 142(1) on 05.10.2019 and 19.1.2019 in response thereto assessee filed the reply details as required admittedly vide page 2 para 1 of the assessment order. During the course of assessment proceedings the ld. AO has noted....
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.... of Rs. 4,29,08,725/- in October and November(upto 8th Nov). The assessee did not attempt to explain the reasons for such a high sales in September and October ever.. 4-5). The assessee has produced cash book and sales ledger in support of its claim of the above cash sales. On verification of the same, it was noticed that the assessee is claiming sales of Rs. 1,00,33,680/- for only one day i.e. 8th November, 2016. It is humanly impossible to sell goods worth Rs. 1,00,33,680/- in one day. The assessee's argument is that these sales were made after demonetization was declared at 8 pm. It is not possible to sale goods worth Rs. 1,00,33,680 in a span of 4 hours because old currency was not allowed to be accepted after 12 pm on 8th November, 2016. 6). The assessee has sold goods to approx 107 People via separate bills. How it is possible that amidst such rush in the shop, the assessee could enter amount and weight and took a print out and got it signed by these 107 purchasers. How the assessee could manage to attend 107 people in 240 minutes! It is next to impossible. 7). The assessee was asked to produce the bills for such sales. The same were produced but su....
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....e 39 days part of which is not found genuine as it is not verifiable and neither sales nor purchases for such sales are found verifiable during the course of assessment. The assessee has already deposited cash of Rs. 3.25 Cr in the month of October. So, sale for the month of October will not have effect on cash balance on 8th November which is claimed to be the source of cash deposited during demonetization. Therefore, average monthly cash sales booked by the assessee in the rest of the months i.e from April to September are considered as sales are considered as genuine sales. Average sales per month comes to Rs. 61 lac approx (rounded off)and accordingly excess sales booked by the assessee for the month of November is computed as below: Sales for the month of November(upto 8th November) : The assessee has booked Rs. 1,94,08,630 on account of cash sales during these 8 days which is exorbitantly high and unprecedented. However, as discussed above assessee's average monthy sales is Rs. 61 lac means Rs. 2 lac daily. So, for 8 days of November, sales of Rs. 16 lacs is considered to be genuine and excess sales i.e. Rs. 1,78,08,630 is considered as unexplained amount cr....
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....1) issued on 05.10.2019. pgae 4-8 of Annexure A: in the is notice the ld. AO has asked to the assessee various details which has been replied by the assessee admittedly. C. Notice U/s 142(1) issued on 22.11.2019. pgae 9-10 of Annexure A: in this is notice the ld. AO has asked to the assessee to file some more information/details which has also been replied by the assessee admittedly. D. Notice U/s 142(1) issued on 19.12.2019. pgae 11-13 of Annexure A: in this notice the ld. AO has also asked to the assessee to file some more information/details on next day i.e on date 20.12.2019 which has also been replied by the assessee admittedly. Thereafter the ld. AO has completed the assessment on 21.12.2019. In support note sheet on portal is enclosed at Page 1 of Annexure A. 1.2 On perusal of above notices it is clear these nowhere the ld. AO has given or issued any show cause notice before making the additions or allegations or invoking the provisions of 68 and Sec. 115BBE. The ld. AO has not brought any allegation in the notice of the assessee before making the same and It was mandatory on the part of the ld. AO to issue the specific show cause notice t....
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....sclose the material on the basis of which the Appropriate Authority has reached the tentative conclusion that the transaction has been undervalued and the reasons for reaching that tentative conclusion is a defective show-cause notice and, therefore, an order made on the basis of that show-cause notice would be an incompetent order and, therefore, liable to be set aside.-Mrs. Nirmal Laxminarayan Grover vs. Appropriate Authority (1997) 139 CTR (Bom) 40 : 1995(2) Mh. L.J. 755 : TC S3.267 followed; C.B. Gautam vs. Union of India (1992) 108 CTR (SC) 304 r/w (1993) 110 CTR (SC) 179 : (1993) 199 ITR 530 (SC) : TC S3.142 relied on. Also refer recent decision of this honble Tribunal in the case of M/s Motisons Jewellers Ltd in ITA No. 161 & 178/Jp/2022 dt. 29.09.2022. Copy enclosed. 2. All the allegation of the ld. AO based on guess work, assumption, presumption and suspicion and our WS on the same are as under: 2.1). On the allegation that the cash sales in the month of October and November(upto 8th Nov) is Rs. 4,29,08,725/- whereas total cash sales for AY 2017-18 is Rs. 10,74,41,749/-. It means that the assessee made 40% of the total cash sales in these 39 days....
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.... society. So, its not that the demand for assessee's goods suddenly increased which resulted into a huge cash sales of Rs. 4,29,08,725/- in October and November(upto 8th Nov). The assessee did not attempt to explain the reasons for such a high sales in September and October ever.:- Vide para 2.2 further as we have stated about the marriage and other social season after deepawali and the ld. AO has wrongly stated that the assessee did not attempt to explain the reasons for such a high sales because in para 1 we have already stated that the ld. AO has not asked or issued any show cause notice for the same, what details asked by the ld. AO have been given by the assessee. 2.4-5). The assessee has produced cash book and sales ledger in support of its claim of the above cash sales. On verification of the same, it was noticed that the assessee is claiming sales of Rs. 1,00,33,680/- for only one day i.e.8th November, 2016.It is humanly impossible to sell goods worth Rs. 1,00,33,680/- in one day. The assessee's argument is that these sales were made after demonetization was declared at 8 pm. It is not possible to sale goods worth Rs. 1,00,33,680 in a span of 4 hours because old cu....
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....er where Hon'ble VISAKHAPATNAM ITAT Bench (DB) in the matter of M/s Hirapanna Jewellers, Visakhapatnam ITA No. 253/2020 for AY 2017-18 has very well supported the view of assessee as follows; "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 not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of Hon'ble Delhi High Court in the case of Kailash Jewellery House (Supra) and the Hon'ble Gujarat High Court in the case of Vishal Exports Overseas Ltd. (supra),Hence, we do not see any reason to interfere with the order of the Ld.CIT(A) and the same is upheld." Further assessee admittedly produced sales bills, cash book and all books of account which have not been rejected.....
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....t that time in the permissible limit. At the business premises there is systematic arrangement as sales man, cash counter, note/rupees counting machine, bills checking, computer, tally etc.. The doubt may be raised where the shop is running by one or two persons. And in the crowed some data is left then it mean not there was no sales. 2. 8). Further, during the bill verification, it was marked out that the assessee has not entered mobile no of the persons to whom goods were sold on 8th November. However, the number is available on almost each and every bill except this date. When the assessee was asked the reason for such difference, no satisfactory explanation could be offered in this regards. The assessee probably did this to hide the identity of the buyers or it is possible that these buyers do not exist at all. To make this transaction not verifiable, the assessee did not fill the column of Mobile/Contact Numbers. :- Vide para 2.8, further the ld. AO has not put these allegation nor asked as we have already stated in above para-1 vide notices and note sheet. And in the crowed some data is left then it mean not there was no sales. It is not compulsory or mandat....
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....nnot be regarded as a circumstance giving rise to a suspicion with regard to the genuineness of the transactions. The Tribunal, therefore, was not right, in our opinion, in setting aside the order of the Appellate Assistant Commissioner and restoring that of the Income-tax Officer. There are no circumstances disclosed in the case nor is there any evidence or material on record which would justify the rejection of the book results. 5. In the results, therefore, our answers to the questions are as follows : Question No. 1. - No. Question No. 2. - Yes. Question No. 3. - Yes. 6. The Commissioner wil 2. 9). In the stock register also, the assessee has not provided any description of the items purchased and kept as stock in trade. The assessee maintains stock register in Qty in Grams only having columns of Qty Inward, Qty Outward, Closing Qty. In such case, it becomes unverifiable whether the assessee had a stock of the goods or not which has been claimed as sales by him.e.g. We do not know if the assessee had stock of 20 pcs of chains or earnings which has been claimed by it as sales on 8th November, 2016.:- In this regard it is submitted that the assessee maintained t....
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....ctober will not have effect on cash balance on 8th November which is claimed to be the source of cash deposited during demonetization.:- vide entire para 2 as above. The ld. AO has not brought any evidence on record that the sales is not genuine, the ld. AO has not proved that the purchase was bogus, otherwise she could have rejected the books of accounts or made the addition on that account. The ld. AO nowhere stated that what inquiry has been made or what evidences in her hands for the allegations made. Further the ld. AO nowhere stated that the sales between 08.00PM to 12.00PM on 08th November was illegal or not valid in old notes, rather she of the view that the same was valid although, but she was of the view that such high sales cannot be done in four hours, for that we have already stated. 4. The ld.AO stated that, average monthly cash sales booked by the assessee in the rest of the months i.e from April to September are considered as sales are considered as genuine sales. Average sales per month comes to Rs. 61 lac approx (rounded off)and accordingly excess sales booked by the assessee for the month of November is computed as below: Sales for the month of ....
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....he affirmative and in favour of the assessee. 9. The question in Matter No. 1863 of 1991 is also answered in the affirmative and in favour of the assessee. 10. There will be no order as to costs." (c) Also on the decision of Hon'ble ITAT, Nagpur Bench in the case of M/s Heera Steel Limited vs ITO (2005) 4 ITJ 437in which it was held that cash sales cannot be equated with cash credit under section 68. (d) The AO has made addition by invoking the provision of section 68. The precondition for invoking section 68 is that there has to be credit of amount in the books maintained by the assessee. [CIT vs P. Mohanakala (2007) 291 ITR 278 (SC)]. (e) The section is applicable only when a sum is found credited in the books of the assessee[Rakesh Kalia v. CIT, (2006) 286 ITR 357 (Dei.)].In the case of assessee neither any sum has been credited in the books of accounts or in the bank account even for a single day throughout the year which is evident from the peak analysis of bank account is submitted here with. As evident from the bank account, sale proceeds realized was deposited in the bank are utilized in the same day for making payments of purcha....
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....ich is also higher in comparison to earlier years. 5 Addition u/s 68 is not warranted: As the ld. AO has made the addition by invoking the provisions of Sec. 68 which is not applicable, because the cash deposited in the bank account is not a credit entries taken from anywhere or from others it is the assessee's self money received from sales. And if the ld. AO was of the view that it was the undisclosed or unexplained money then at the worst addition was to be made u/s 69A not u/s 68. The ld. AO one side accepted the books of accounts and other side he made the addition u/s 68 which is not permissible, once the ld. AO herself admitted books then how on the same books addition can be made u/s 68. 6. Directly covered matter : As under the same fats This Honble bench in the case of M/s Motisons Jewellers Ltd in ITA No. 161 & 178/Jp/2022 dt. 29.09.2022 has held as under: "20. We have considered the rival contention and perused the orders of the authorities and the material available on record arguments advanced by both the parties and also gone through the judicial decision relied upon by both the parties to drive home to their contentions. We find from the r....
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....g the net profit, the lower authorities had considered these sales as part of turnover and thus treated the cash received from the debtors immediately at the time of Sales of Rs. 13,30,000/- and Rs. 2,49,515/- received after 8-11-2016 as genuine and verified. We feel that out of total amount of Rs. 12,17,48,500/- deposited into bank account, the cash realized from debtors was of Rs. 25,96,480/- which is a meager amount looking to the quantum of sales of the assessee and this cannot be treated as nongenuine. It is also noted from the record that the AO made the telephonic enquiry / verification from the debtors on test check basis for 6 cases only where the list contains more then 250 names, however, in case of discrepancy the opportunity of cross examination was required to be made by the assessee but it was not made by the AO. Therefore, it can be said that the assessee was deprived of cross examining the parties due to lapse on the part of the AO. As regards the genuineness of advance from customers, the assessee received advance of Rs. 11,86,250/- from the customers which the lower authorities considered the corresponding sales made to these customers as genuine and it ....
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....or assessee's business looking to the nature of business and past history: As we have been already described in our submission that the nature of business of assessee is trading of gold, silver jewellery and watches. A big portion of sale is done in cash in this business that is why having the huge cash in safe is not unprecedentedly, in support of this contention we are being produced a detail statement of sales comprises cash sales and cash deposited into bank account year wise; vide page 2-3 4 assessment order and Annxure-C The above Figures of sales /cash sales /cash deposits into bank are indicating that the cash sales and cash deposit into bank out of cash sales are not new for assesse. These transaction are main part of this business even earlier it was high in compare to present situation. After 'NOTBANDI' and 'GST' the trend of cash sales is getting depressed that is why the ratio of cash sales to total sales is come down and in near future it would go less as compare to present position. 8. Double Taxation is Unconstitutional therefore Illegal: The Ld. AO has grossly erred in law and facts in making addition on account of Undisclosed ....
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.... is appreciable that assessee hammering this facts in assessment Proceedings also and to till date that cash sales is duly entered into Books of Accounts under the head of Sales and whatever Profit calculated in his Income Tax Return it is based on such Sales which includes such Questioned Cash sales of Rs. 1,78,08,630/-. 10. Addition made without corroborative material and without rebutting produced evidences: The ld. AO as well as the ld. CIT(A) have grossly erred in law as well as on the facts of the case in making addition of Rs. 1,78,08,630/- on account of alleged Undisclosed Income U/s 68 alleging that cash sale is not genuine, but without bringing any cogent material in support of her contention and without bringing corroborative evidence and without considering the materials and explanations available on records in their true perspective and sense, therefore addition is illegal and such addition should be deleted in toto, The Honble Raj. High Court in the case of Malani Ramjivan Jagannath vs. ACIT 316 ITR 120(Raj.) it has been held that In each trading account, only four entries were there of opening stock, purchase on debit side, sales and closing stock o....
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....unts from Qualified Chartered Accountants and paid the Tax as due. Similarly Registered under VAT/GST and filling their monthly as well as Annual returns after depositing due Tax. It is also apposite mention here that whatever transactions are being shown by the books of accounts of the assessee have been submitted GST department also and the complete GST Returns also have been submitted before Ld. AO as well as Investigation team for their verification and it is also appreciable that GST department has accepted such Sales and Purchase Transaction in same manner without making any adverse comments. Therefore it is also thinkable that if one Central Government Revenue department accepts the results of Books of Accounts as shown by the assessee how other can reject without pointing out any cogent mistake on record or without bringing any corroborative material on record. The ld. AO has also not doubted the other Govt. Agencies i.e VAT/GST which is also equal to income tax. And in these days are so many penal provision in the GST on wrong sales/purchase, hence the same cannot be ignored. Commercial Tax Deptt., or GST were directly concerned with the collection of tax on sales....
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....ed day by day and accumulated till the first week of Nov.2016. And after Deepwali about one week every business men live in easily mood and feel free for some time. However on 10th /11th November the marriages were going to be started, as on Ekadahsi being the abhooj Muharat there were so many marriages in Rajasthan or India and due to this marriage season the sale of jewellery has increased drastically and it is very know facts and the Cash has been accumulated and deposited in the bank and the assessee was not known that there shall be Demonetization from 08.11.2016. 12.3 Thus cash deposited by assessee was part of business and generated during day to day business transaction and was fully disclosed and explained in books of accounts including cash book as maintained during day to day business transaction or generated through sales of jewelry as fully supported by valid sales bill by charging/collecting GST and also part of books of accounts, Copy of sales bills or ledger was submitted before lower authorities. On perusal of the sales registered it is revealed that all the details minutely have been mentioned. If the ld. AO was having any doubt he could have made in depe....
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....e lower authorities. In this regard we placed our reliance on Jurisdictional High Court order in the matter of CIT Vs. M/s Ceramic Industries and M/s Ceramic Tableware (P) Ltd. ITA No. 117/2008, 65/2009,44 and 56 of 2010, 83/2011,63 and 65 of 2014, 124,135 and 198 of 2016 dated 25/05/2017. Where it has been held "We agree with the arguments of the ld. AR that the main objection raised by the AO was that input/output ratio in various months has the inconsistency which has been duly explained by the assessee vide letter dated 26.03.2004 and the second objection by the AO was that the sister concern M/s. Bharat Potteries Ltd. has declared more yield and more gross profit, has also been explained by the assessee vide the same letter dated 26.03.2004. Therefore, the inconsistency in the input/out ratio in various months the reasons for which has been explained by the assessee, cannot be the basis for rejection of books of account. The yield and gross profit rate declared by the assessee can also not be the basis for rejection of books of account since M/s. Bharat Potteries Ltd. is manufacturing maximum of stoneware crockery and for many other reasons which were explain....
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.... of account and cannot be relied upon; Dharam Chand Joshi v. Satya Narayan Bazaz, AIR 1993 Gau 35. Books of account being only corroborative evidence must be supported by other evidence; Dharam Chand Joshi v. Satya Narayan Bazaz, AIR 1993 Gau 35. Here cash deposited by the is supported with the cash book and the cash books is also supported with the books of accounts maintained by the assessee which is also supported with sales/cash sales, purchase, stock register, ledger, bank accounts, bills, vouchers and other documents. And the ld. AO has not rejected all these or not invoked provision of section 145(3), otherwise she could have invoked the same. Thus cold and hot breath cannot blow together. 15. Addition made without bringing any cogent material on record; Simultaneously Ld. AO could not bring any cogent material in support of his allegation that such founded Cash of Rs. 1,78,08,630/- is Unexplained Income, except suspicion for that we have already stated above. It is very settled position of law that any contrary view as is being taken by the Assessing authority as well as assessee should bring some corroborative material on record through which it can be pr....
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....th and the assessed has withdrawn from bank a sum of Rs. 2 lacs on 4th December, 2000 and there was no material with the Department that this money was not available with the assessed. It has been held by the Tribunal that in the instant case the withdrawals shown by the assessed are far in excess of the cash found during the course of search proceedings. No material has been relied upon by the Assessing Officer or Commissioner Income Tax(A) to support their view that the entire cash withdrawals must have been spent by the assessed and accordingly, the Tribunal rightly held that the assessment of Rs. 2.5 lacs is legally not sustainable under Section 158BC of the Act and the same was rightly ordered to be deleted. 17. The above being the position, no fault can be found with the view taken by the Tribunal. Thus, the order of Tribunal does not give rise to a question of law, much less a substantial question of law, to fall within the limited purview of Section 260A of the Act, which is confined to entertaining only such appeal against the order which involves a substantial question of law. 18. Accordingly, the present appeal is, hereby, dismissed." (c) In the matter ....
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....e High Court 2004-05 2,24,820 Assessed u/s. 143(1) 2005-06 1,89,000 Assessed u/s. 143(1) 2006-07 2,51,346 Assessed u/s. 143(1) 2007-08 2,07,702 Assessed u/s. 143(1) Assessed u/s. 143(3) by ITO, W-II, 2008-09 2,64,311 Azamgarh dated 31.12.2009. 10. A bare perusal of the aforesaid chart indicates that for the A.Y. 2008-09 the assessee had been assessed under Section 143(3) of the Act at a total income of Rs. 2,84,371/-. In that assessment the books of account of the assessee were also accepted. It clearly appears that the income disclosed by the assessee in the present year is similar or comparable to the income which the department assessed at the hands of the assessee five years later. This fact itself indicates that the rejection of books of account and the consequential best judgment assessment made by the assessing officer in the present year is wholly excessive, arbitrary and unfounded. 11. In view of the above, we answer question no.1 in favour of the assessee and against the revenue. We have found that the rejection of books of account of the assessee was unfounded. Consequently the estimati....
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.... 16.1 Invocation of Section 115BBE is illegal: The invocation of the provision of Section 115BBE of the act, by the ld. AO is illegal, bad in law, against the principle of natural justice. Because firstly the ld. AO has not issued any show cause notice for that we have already stated in above para 1 and also as under Recently the Honble ITAT Jodhpur Bench Jodhpur in the case of Smt. Suraj Kanwar Devra vs ITO ITA 50/Jodh/2021 dt. 23.11.2021 It has been held that "The AO has not issued any show cause notice before invoking the provision of Sec. 115BBE for taxing the income on higher rate. It was mandatory on the part of the AO to issue the specific show cause notice to this effect asking to the assessee as to why the income should not be taxed under sec. 115BBE before doing so. It is very settled legal position that a person (assessee) is entitled to opportunity to show cause as to why not the income of the assessee is determined and charged or taxed in the manner as proposed by the A.O. but in the instant case no such type of opportunity had been provided but the AO has failed to do so, which is against the principal of natural justice and against the law. Thi....
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....llowed by Audited Financial statement but making addition on the basis of Cash deposited to that extent and duly recorded in the Books of Accounts therefore this act of the Ld. AO many Questions left unanswered which are mainly what would be Sales as recorded in the books of account for Rs. 1,78,08,630/- and similarly what would be of Inventory as sold out in support of such Cash of Rs. 1,78,08,630/-. If we follow the presumption of the Ld. AO then many figures will have to be fixed on reveres angle such as Sales would be reduced by Rs. 1,78,08,630/- resulted Net Profit would have been converted into Loss by Rs. 1,78,08,630/- and ultimately total income comes same as being shown by the assessee in their Return. 18. We also would like to submit that the judgments and WS given in the Honble ITAT order in the case of M/s Motisons Jewellers Ltd.(Supra), may kindly be treated as part of our WS and also consider here. 19. Hence the disallowance so made by the AO may kindly be deleted in full and oblige. 6. To support this various contentions recorded in the written submission the ld. AR of the assessee relied upon the paper book wherein the evidence / decision were p....
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....roduced herein below : Sub:-Submission of written reply and copies of case law's relied by revenue in the case of M / s Rukmani Jewellers Pvt. Ltd. ITA No. 539/JPR/2023, A.Y. 2017-18-reg Respected Sir/Madam, Kindly refer to today's hearing in the above case today. In addition to my arguments, I had relied on following case laws in favour of revenue. The copies of same are submitted herewith in duplicate alongwith my written submission. 1. Hon'ble Delhi High Court held in the context of issuance of share capital and in the case of PCIT Vs Youth Construction Pvt. Ltd. [(2013) 357 ITR 197 (Del)]" it involves three ingredients, namely, the proof regarding the identity of the applicants, their creditworthiness to purchase the shares and the genuineness of the transaction as a whole". This approach has been adopted by Hon'ble Court above all along. (Page No. 1 to 6) 2. Hon'ble Calcutta High Court in the case of CIT vs. United Commercial and Industrial Co(P) Ltd. [1991] 187 ITR 596(Cal)], has held that under the scheme of Section 68 "it was necessary for the assessee to prove prima facie the identity of creditors, the capaci....
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....T remarked, "The assessee either deposited its undisclosed amount or otherwise helped undisclosed, unanimous and unidentifiable persons convert their undiselosed prohibited currency into bullion after notification of demonetization. In both circumstances, the action of the assessee was not permissible in the eyes of the law". (Page No. 27 to 91) The Hon'ble ITAT holds the addition to be sustainable under Section 68, relies on SC ruling in Apex Labs to reject Assesses's submission that even though the transactions are held illegal by the Revenue only the income can be taxed under the Act which does not differentiate between legal and illegal incomes. Also holds that demmonetised currency was received by the Assessee and was wrongfully deposited with the bank, thus, upholds the assessment order by concluding that the Assessee mischievously and unscrupulously brought the demonetized currency into the network. Discards Asessee's claim that money was received from the customers and upholds Revenure's stand that no legal sale of gold could be made with use of prohibited currency: the Hon'ble ITAT takes a stern view on Assessee's conduct ....
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....urchased and kept as stock. It could not be verified whether assessee had stock of items claimed as sold by him. In purchase bills also there was no description of goods. It mentioned only "Gold jewellery 22K" and quantity in Grams only. (vii) Average Cash balance of assessee was between Rs. 20 lacs to 30 lacs from 1.04.2016 to 30.09.2016 which suddenly increased to 1.82 Cr as on 08.11.2016. (viii) AO has rightly adopted sale of Rs. 16 lacs in 8 days from 1 November to 8 ^ a November, 2016 (Rs. 2 Lac per day which is average daily annual sale) as against claimed sale of Rs. 1.94 lac and had rightly added excess sale of Rs. 1.78 Cr as un- explained credits. 8. In view of the facts submitted above and the relied court decisions AO has rightly held and ld. CIT(A) has rightly rejected the appeal of the assessee holding that assessee failed to prove satisfactorily the amounts credited in its books of accounts and in holding that assessee has made an attempt of aggregating its books and trying to explain the huge cash deposits by making bogus sales entries in its books of Accounts." 10. In the rejoinder the ld. AR of the assessee submitted that the assessee ....
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.... making bogus sales entries in their books of accounts. Having considered entire facts of the case, and the case laws cited above, it is apparent that the appellant has completely failed to offer any explanation either before the AO during assessment proceedings or before me during appellate proceedings, despite affording sufficient number of opportunities and hence, I find no infirmity in the order of AO. Accordingly, the addition made of Rs. 1,78,08,630/- is confirmed. As a result, the appeal is dismissed. 12. The bench noted that the points or allegation noted by the ld. AO in his order is that a) the assessee claimed to have sales of Rs. 1,00,33,680/- for only one day i.e.8th November 2016. Against this contention the bench noted that the assessee has provided the stock details, bills and cash book. No defect whatsoever found in these primary records of the assessee. There is not doubt about the sales or that of the purchase with the stock of goods sold. All the details required to prove the sales made by the assessee were provided and both the lower authorities have not found any defects. As regards the receipt of cash from the customer the ld. AR of the assessee relied ....
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....ded in the books and no defects found merely the same is recorded on the date of demonetization addition of cash receipt cannot be made in the hands of the assessee. Moreover, the sales already recorded is also not considered to be reduced as income of the assessee therefore, the action of the lower authority is not in correct. c) The assessee has sold goods to approx 107 People via separate bills. How it is possible that amidst such rush in the shop, the assessee could enter amount and weight and took a print out and got it signed by these 107 purchasers. Even On this issue bench noted that the assessee has submitted the invoice. On this invoice only the date is written and it is not finding recorded on oath that sales is only after 8PM. Since the period was of marriage seasons it was not under dispute that the assessee not sold the goods. Therefore, once the goods is supported by the Invoice recorded in the books and no defects found merely the same is recorded on the date of demonetization addition of cash receipt cannot be made in the hands of the assessee. d) The assessee was asked to produce the bills for such sales. The same were produced but such bills are not verifia....
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....tional high court has already held that when the cash sales is recorded the cash deposits becomes self explanatory and such amounts were received by the assessee from customer and the same is supported by the Value added tax paid invoice. 13. Thus, considering all the facets of the case the bench noted that the revenue did not pinpoint any defects in the books of accounts, quantitative records available with the assessee, cash book and invoice presented in the assessment proceedings. Merely the assessee unable to record the mobile number it does not make the sale as non-genuine and we find support of this contention from the decision of the jurisdictional high court in the case of Smt. Harshil Chordia Vs. ITO reported at 298 ITR 349 (Rajasthan-HC)(supra) we do not find any merits on the finding of the ld. AO and that of the ld. CIT(A) in disbelieving the sales recorded by the assessee as the sales is in course of business is duly supported by the invoice and delivery of the goods recorded in the books of the assessee. The cash is generated out of the stock already on record and thus the sales made by the assessee company is genuine sales recorded in the books of account. All the....