TaxTMI 
TaxTMI 
2024 (9) TMI 1448
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....issue during the course of hearing, the ld. DR 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. ma....
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....,000/- in his bank account with Bank of Maharashtra, account No. 60197106811 on 21.11.2016. 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 22.11.20....
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....of below 2,00,000/-. 5 You have shown NIL closing stock as on 31.03.2016 in your return for A.Y. 2016-17 whereas you have shown opening stock of gold ornaments 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 p....
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....1,913/- from 09.10.2016 to 07.11.2016. All the bills of cash salu were below 200000/- without name and adress of purhaser and no quality of gold and item sold mentioned. Assessee has introduced debtors of Rs 242,100/- on 20.04.2016 while he has no closing balance of debtors 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 ....
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....ome, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion jewellery or other valuable article, or the explanation offered by him is not the opinion of the Income-tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial 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, sec....
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....ee 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 09.11.2016 to 30.12.2016 were from sale of jewellery. (6) The A.O. has further observed that though sales are complete vouched & sales bills also produced but same do not contain the name & address of buyers & since in return filed on 31.03.2016; (U/sec. 44AD in sahaj form 4) hence no closing stock 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 verifi....
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....ster of items traded gold & silver & has also maintained day to day cash book specifying the sales & cash flow "NO DEFECTS" therein found; nor has been pointed out by the A.O. during assessment proceedings. (Page 15 to 18) That uptill assessee was maintaining books in individual name & from year 2015 in name of Laxmi Jewellers also complete Trading, Profit and loss account & Balance - sheet for year ended 31.03.2015, 31.03.2016 & for the year were also submitted to A.O. & as enclosed. (Page 13A, 13B) (9) That the business of jewellery of assessee has only started in the year 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 ac....
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....(VIZ) of 2021 dated 16.03.2022 (Para 6). (3) (2024) 161 taxman.com 293 (Amritsar ITAT) Mohd Ashraf War V/s ITO dated 02.04.2024. (4) Fine Gujrnwala Jewellers V/s ITO (2023) 151 Taxman.com 340 (Delhi ITAT) Para 10." 9. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee is proprietary of the M/s Laxmi Jewellers doing business of sale of silver and gold articles. The assessee deposited cash of Rs. 36,50,000/- in the bank account which are of specified bank note (SBN). The assessee has given all the proof related to the recording of the sale on account of the Diwali festival and the assessee could not deposit the cash into bank account due 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 p....
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....e merits discussed by the assessing officer in his order. Before us ground no. 1 raised by the assessee reads as "That the Ld. CIT(A) confirming the application of provision of sec. 145(3) without rejecting method of accounting and stock valuation." Here we note that the assessee is not challenging the rejection of the books based on the detailed observation made by the ld. AO but contend that the method of accounting as well as the stock valuation was not rejected. We note that once the books of account is rejected based on detailed 6 reasons by the ld. AO, it may not be a particular part of the record but once the same is rejected on various reasons we do not find any infirmity in the finding recorded by the ld. CIT(A) and that of the ld. AO. Therefore, ground no 1 raised by the assessee stands dismissed. In the result, the appeal of the assessee stands partly allowed. Order pronounced in the open court on 02/09/2024. ============= Document 1 à¤à¤¾à¤°à¤¤à¥€à¤¯ गैर नà¥à¤¯à¤¾à¤¯à¤¿à¤• à¤à¤• सौ रà¥à¤ªà¤¯à¥‡ Rs. 100 ONE HUNDRED RUPEES रà¥.100 ....