TaxTMI 
TaxTMI 
2024 (9) TMI 1448
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....objected to assessee's application for condonation of delay stating that the serving of the notice at the different email is not possible and it is sufficient that the assessee was given the notice and that suffice the principles of natural justice and thereby objected to the condonation petition filed by the assessee. 4. We have heard the rival contention of the parties and perused the materials available on record. The prayer by the assessee for condonation of delay of 124 days has sufficient cause as the email id mentioned was different as contended in the affidavit placed on record and thereby it has resulted delay in bringing the present appeal with a delay of 124 days. Based on the contentions supported by the affidavit we concur with the submission of the assessee and condone the delay in bringing the present appeal with a delay of 124 days. As held by the apex court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) wherein the apex court held that "Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908. may be admitted after the prescribed period if the ap....
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.....11.2016. The date comes under the period of demonetization dated 9.11.2016 to 30.12.2016. On perusal of assessee's Income Tax Return of assessment year under consideration and preceding assessment year, bank statements and submissions ld. AO observed that assessee had received income/profit from jewellery, and he has deposited cash of only Rs. 1,60,000/- up to 26.10.2016 and no cash deposited after demonetization period. Similarly, in F.Y. 2015-16 assessee has made cash deposit in bank Rs. 9,10,000/- only. Therefore, assessee was asked to explain the sources of cash deposits during demonetization period. In response, assessee has submitted that Cash deposited in his saving bank accounts during the demonetization period from dated 09.11.2016 to 30.12.2016 were out of the sale proceedings of jewellery. Ld. AO on 22.11.2019 issued a show cause notice to the assessee mentioning the reasons as to why the books of account maintained by the assessee is not acceptable and proposed to be rejected by invoking the provisions of section 145(3) of the Act. The assessee furnished the reply on 22.11.2019. The ld. AO considered the reply of the assessee but found not acceptable. Since, the....
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....s Rs. 64,73,250 (2660.960 grms.) as on 01.04.2016. 6 You have shown cash receipt of Rs. 2,42,100/-on 20.04.2016 in cash 1. book as advance and others. Whereas as per return for A._. 2016-17 no debtors/advances shown. 7. You have shown opening cash balance in cash book as on 01.04.2016 Rs. 1,54,326/- As per your cash book you have cash in hand Rs. 30,71,644/- on 26.10.2016 including job work income claimed Rs. 266,500/- (received upto June, 2016) but you have deposited cash in bank Rs. 130,000/- on 26.10.2016. 3.4 The above notings and reasons demonstrate that the AO has minutely and carefully examined the books of accounts maintained by the appellant and concluded that the same were not reliable and deserved to be rejected u/s 145(3) of the Act. 3.5. The AO also concluded that the appellant has made a concocted story by making unreliable books of accounts to generate cash through bogus sales or otherwise to deposit his undisclosed cash in the bank account during the demonetization period. 3.6 Section 145(3) empowers the AO to reject books of accounts u/s 145(3) under ANY of the following circumstances - (a) Where he is not satisfied about the correctness or completeness....
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....rs as on 31.03.2016. 3.12. From the above commentary of the AO, it is clear that precise and in depth analysis of the books of accounts of the appellant revealed that the books of accounts of the appellant suffered from various types of defects and discrepancies. 3.13. The Hon'ble Allahabad High Court in the case of Avdesh Pratap Singh Abdul Rehman and Brothers vs. CIT 201 ITR 406 held that - It is difficult to catalogue the various types of defects in the account books of an assessee which may render rejection of account books on the ground that the accounts are not complete or correct from which the correct profit cannot be deduced 3.14 In the instant case, the detailed explanations given by the AO which led him to infer that the accounts had discrepancies and that it could not be relied upon to assess the income, profits or gains of the appellant. Further, the Hon'ble Court had opined in the case (supra) that- In such a situation the authorities would be justified to reject the account books under section 145(2) and to make the assessment in the mariner contemplated in these provisions. 3.15. Further, the Hon'ble Supreme Court in the case of Kachwala Gems....
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....cial year." 4.3. In view of the above, rejection of books of accounts by the AO, for the reason that the appellant's books of accounts contains discrepancies and do not meet the test of deduction of true and correct profits therefrom, the AO has rightly estimated 10% of the cash deposited by the appellantie. Rs. 3,65,000/- during demonetization period and tax it as unexplained deposit/money u/s 69A of the I.T. Act. 4.4 Sufficient reasons have been enumerated in the assessment order to hold that books of accounts maintained by the appellant contain discrepancies and are unreliable. It is also evident that the AD has brought on record the material on basis of which he has arrived at the conclusion with regard to the correctness and completeness of the accounts of the appellant. Therefore, section 69A has been correctly invoked by the AO. He has made the addition of Rs. 3,65,000/- (10% of total cash deposited during demonetization period) by treating it as unexplained deposit/money under section 69A. The ground taken by the appellant is misplaced and deserved to be dismissed. 4.5 In view of the above, Ground no. 2 is dismissed. 5. Ground No. 3 is general in nature and need....
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....being opening stock as on 01.04.2016 is verifiable. And thus looking to such discrepancies; the books of accounts believed to be rejected u/sec. 145(3) of Act; & thus show caused & has made addition of 10% of total Cash - Deposit in bank during demonetization period (10% of Rs. 36,50,000/-) Rs. 3,65,000/- as unexplained cash - credit u/sec. 69A of Act & same has taxed u/sec. 115BBE. No care for following facts granted:- (1) That is was intimated to A.O. & facts got verified that the trade of gold jewellery is such that it is usually in CASH & customer do not wish to disclose his name nor is warranted in income tax law. Further each day sales & purchase have been verified by A.O. in person & no single discrepancy found therein in cash - book & stock register. (2) That the details of opening stock as on 01.04.2016 & opening Debtors of Rs. 2,42,100/- are mainly as per books of accounts, however return filed u/sec. 44AD hence there was no necessity to disclose in return form, but VAT return, records in form of sales, purchases justified the same were physically verified by A.O. during personal hearing. Copy of Assessee's Trading, Profit and loss and Balance - Sheet as on 31.03.2015....
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....2015 (September'14) & figures of sales of this year v/s last year are not comparable. Also last year sales was just Rs. 3,98,600/- whereas this year it is Rs. 1,04,81,531/-. Further the sales effected higher prior to demonetization in due to navratri & deewali sales. Thus the ratio of 10% on cash deposit applied on total sales during demonetization does not hold good. As held in case of ITAT Delhi ITA No. 37414/Delhi/2019 Agon Global (P) Ltd. V/s The ACIT dated 31.10.2019 That when there is no difference in cash sales V/s cash deposit ratio no addition on account of cash deposits during demonetization period can be made. (10) Even if provisions of section 145(3) of Act are applied; same cannot be considered as unexplained deposit money u/sec. 69A of Act. (A.O. has considered 10% of cash - deposit Rs. 36,50,000/- in bank during demonetization period as unexplained cash credit). Where books of account are rejected in their entirety, the assessing officer cannot rely upon any entry in those books of account for making an addition to assessee's taxable income under section 68 (1) CIT V. Dulla Ram, Labour Contractor (2014) 42 taxmann.com 349/223 taxman 24 (Mag.) (Punj. &....
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....e to festival seasons and in the meantime, demonetization was announced. Thus, the action of the Assessing Officer making addition of Rs. 3,65,000/- u/s 68 of the Act being 10% of the money so deposited u/s. 69A of the Act is incorrect and required to be deleted. 10. Per contra, ld. DR relied upon the detailed reasoning given by the ld. AO at page No. 3 of her order wherein ld. AO contended that the turnover of the assessee has declared u/s 44AB of the Act in the preceding year. The assessee declared the sales of Rs. 36,81,913/- from 09.10.2016 to 07.11.2016. The assessee has not furnished details of purchaser of the goods along with name, address and PAN. The assessee has not shown closing stock and has shown opening stock for an amount of Rs. 64,73,250/-. Based on that the additions making @ 10% of the sales is correct and the ld. CIT(A) confirmed the finding of ld. AO based on those arguments, she supported the order of lower authorities. 11. We have heard the rival contentions and perused the material placed on record. The bench noted that the apple of discord in this case is that ld. Assessing Officer made a lump sum addition @ 10% on the amount deposited into the bank accou....