TaxTMI 
TaxTMI 
2024 (9) TMI 1435
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...., which sustaining by CIT(A) of AO's action of rejection of Books of accounts, application of provisions of section 145(3), treatment, out of total SBN'S of Rs. 26,00,000/- deposited in the bank by the assessee, SBN'S of Rs. 20,00,000/- as undisclosed income and consequently adding the same i.ec. Rs. 20,00,000/-u/s. 69A r.w.s. 115BBE in the total taxable income of the assessee are most arbitrary, unjust and untenable and in the alternative highly excessive w.r.t. facts and circumstances of the case. 2. That the learned CIT(A) failed to appreciate that the AO failed to discharge the burden of proof which squarely lay upon him for treating, out of total SBN'S of Rs. 26,00,000/- deposited by the assessee in his bank account during Demonetization period i.e. 08/11/2016 to 31/12/2016, SBN'S of Rs. 20,00,000/- as undisclosed income of assessee and consequentially adding the same i.e. Rs. 20,00,000/-u/s. 69A r.w.s. 115BBE in the total taxable income of the assessee. 3. That the learned CIT(A) failed to take into consideration various papers and documents including the under mentioned papers and documents produced/furnished during assessment proceeding....
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....mmissioner (Appeal) on 24/11/2023. I further say that I did not receive any such order of dismissal of appeal from the ends of Income Tax Department till date. Now after knowing this fact that my above mentioned appeal is dismissed by the Commissioner of Income Tax (Appeal) I am belatedly, separately and simultaneously filing appeal against this order of Commissioner of Income Tax (Appeal) before the hon'ble Income Tax Appellate Tribunal, Jaipur Bench and it is humbly prayed that delay in filing appeal may kindly be condoned. I further say that I shall ever remain grateful to the hon'ble Bench for this act of kindness. An Affidavit in support of it is enclosed.'' 2.2 On the other hand, the ld. DR objected to such delay made by the assessee in filing the appeal. 2.3 The Bench has heard both the parties and perused the affidavit of the assessee and feel that there is a merit in the submission of the assessee and thus in view of the affidavit of the assessee, the delay in filing the appeal by the assessee is condoned. 3.1 Brief facts of the case are that he assessee, an individual, carries on sole proprietary business under the name and style of M/s. Shubh Laxmi Tradi....
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....ledger, bank statements produced before the AO in the course of assessment proceedings:- a. Tax Audit Report and Audited final accounts with Annexure and schedules for the year under appeal. b. Month wise details of sales and purchases. c. Details of month wise cash sale and cash deposit in bank. d. Periodical details of cash sales, cash deposited in bank and cash balance. e. Comparative details of cash deposit in banks and cash sales during different periods of financial years 2015-16 and 2016-17 relevant to assessment years 2016-17 and 2017-18 respectively. f. Copy of VAT Returns filed with VAT Department of Govt. of State of Rajasthan for the period 01/04/2016 to 31/03/2017 relevant to year under appeal and VAT assessment order for F.Y. 01/04/2016 to 31/03/2017 relevant to A.Y. 2017-18. g. Ledger accounts of purchases for the period 01/04/2016 to 08/11/2016 accompanied with purchase invoices. h. Copy of ledger accounts of dealers to whom payment made after 08/11/2016. i. Copy of cash book, ledger, journal, bank statement and invoices manually given to the AO in response to summon u/s. 131 of the I.T....
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....5BBE etc. of the Act for making additions in the total income. In its support reliance is placed on various judgments including that of hon'ble ITAT, Jaipur Bench, Jaipur which form part of judicial pronouncements annexed herewith. 6. It is further submitted that there is no finding by the lower authorities that in issuing cash invoices the appellant has disregarded the provisions of Income Tax Act including section 269ST of the Act which interalia says that it will be infringement of law if an individual cash invoice exceeding Rs. 2,00,000/- is issued at one point of time. (2) Sustainment by the ld. CIT(A) of the action of the AO whereby he (the ld. AO) treated an amount of Rs. 20,00,000/- as undisclosed income out of total SBN's of Rs. 26,00,000/- deposited by assessee in his bank account during demonetization period 09//11/2016 to 31/12/2016 and consequently adding by the AO Rs. 20,00,000/- in the total income of assessee u/s. 69A r.w.s. 115BBE of the I.T. Act. 1. Section 69A is not applicable in this case because there are proper entries in the books of accounts of the assessee in relation to cash sale, cash balance and cash deposit (SBN's) in bank. ....
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....te government authorities and assessee has deposited VAT on these sales. Copy of all the VAT returns filed by the assessee online in RVAT Act stood filed before the A.O. The Hon'ble bench will kindly appreciate that there is no difference between the turnover as per RVAT returns/assessment order and the books of accounts of the assessee. In other words total sales including cash sales made by the assessee as per his books of accounts duly tallies with the turnover assessed by the VAT authorities of state Govt. 8. That as regards adverse observations of the AO in the assessment order particularly in para 3.5 of the assessment order that there has been abnormal increase in cash sales as well as cash balance during the period prior to demonetization period the assessee craves leave to submit that increase or decrease of sales depends on various factors including behavior of the customers coming to the shop of the assessee and specific time prevailing at the time of visit of the customer to the assessee shop i.e. time of festivals like Navratri, Diwali etc. It is respectfully submitted that number of customer walking to the shop of the assessee and the volume of goods purchase....
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....es amount of cash sales cannot be treated as undisclosed income because no duplicate addition can be made in law in respect of the same transaction once as sales forming part of trading account and again as disallowance/ addition u/s 69A of the IT Act. Reliance is placed in this regard on various judgments mentioned in the annexed list forming part of judicial pronouncements herewith. 14. In the instant case the assessee duly explained the source of cash deposit which is out of cash sales effected by him upto 08/11/2016 i.e. much before the date of amendment of section 115BBE on 15/12/2016, opening cash balance as on 01/04/2016 and cash withdrawn from the banks during the period 01/04/2016 to 08/11/2016. 15. The provisions of section 115BBE are applicable only on the income taxable u/s. 68, 69, 69A, 69B, 69C or 69D of the Act. But in the present case source of cash deposit in Bank is income from business and as such section 115BBE is not applicable. 16. It is further submitted that treatment of SBN's deposited of Rs. 20,00,000/- (Out of total SBN's deposited of Rs. 26,00,000/- during demonetization period) as unexplained income and consequentially adding ....
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....essee relied on decisions of different judicial authorities which are mentioned as under having annexure No. 6 to 12 and these judgements are in addition to judgements mentioned in the written submissions. May it please your honors, SOME OF THE JUDICIAL PRONOUNCEMENTS REFERRED TO AND RELIED UPON BY THE APPELLANT ASSESSEE IN ADDITION TO JUDGMENTS MENTIONED IN THE WRITTEN SUBMISSIONS GROUNDS OF APPEAL NO. 1 & 3 Sr.No Citation Parties to the case Brief narration 1 a. ITA No. 161/JP/2022 for A.Y. 2017-18 And b. ITA No. 178/JP/2022 for A.Y. 2017-18 ACIT, Central Circle-2, Jaipur Vs. M/s Motisons Jewellers Ltd Motisons Jewellers ltd. Vs. Central The Hon'ble jurisdictional Income Tax Appellate Tribunal i.e. ITAT, Jaipur Bench. vide the common appellate order dated 29/09/2022 dismissed the department appeal no. 161/JP/2022 by observing that sale is duly reflected in the invoice issued, assessee having sufficient stock in the books and the sales is duly reflected in the books of accounts supported by payment of VAT Simultaneously the honorable Income Tax Appellate Tribunal, Jaipur Bench, Jaipur vide the common app....
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....ash in bank account and if nothing incriminating is found contrary than addition u/s. 68 of such cash sale would tantamount to double taxation 5 ITA No. 336/IND/2012 Dewas Soya Ltd., Ujjain vs. ITO Hon'ble ITAT, Indore Bench held, "the claim of the appellant that such addition resulted into double taxation of the same income in the same year is also acceptable because on one hand cost of the sales has been taxed (after deducting gross profit from sale price ultimately credited to profit and loss account" and on the other hand amount received from above parties has also been added u/s. 68 of the IT Act. 6 (1966) 59 ITR 733 (Supreme Court) Chhabildas Tribhuvandas Shah vs. CIT In this case it is held that an assessee who maintains regular account books which are not found to be incorrect, the mere fact that a stock register is not maintained and book profit is considered by the AO as low may provoke an enquiry, but they may not be sufficient to justify action u/s. 145. 7 26 ITR 159 Pandit Brothers vs. CIT The AO cannot say that merely because there is no stock register the account books must be false. 8 (1973) 87 ITR 395 (SC) CIT vs. K.S. K....
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....s in cash is also no ground for rejecting the books of account. There should be some material that cash sales made by assessee either on account of sale on a lower price or sale made out of the material which is not shown in the books of account. There is no instance that cash sales have been made on lower rate than prevailing market price. 14 ITA 1383 and 1384 on 28/08/2019 ITAT Bangalore Smt. Teena Bethala vs. ITO On a reading of section 69A (supra), it is clear that the onus is upon the AO to find the assessee to be the owner of any money, bullion, jewellery or valuable article and such money, bullion, jewellery or valuable article was not recorded in the books of account, if any, maintained by the assessee for any source of income. In these circumstances, the AO can resort to making an addition under section 69A of the Act only in respect of such monies / assets / articles or things which are not recorded in the assessee's books of account. In the case on hand, the cash deposits are recorded in the books of account and are reportedly made on the receipt from a creditor. Further, the PAN and address of the creditor as well as ledger account copies of the creditor....
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.... against an assessee on the basis of tangible material and not on mere suspicion, conjectures or perceptions. 18 (1959) 37 ITR 288 (SC) Lal Chand BhagatAmbica ram v/s CIT In this case the Hon'ble Apex Court decided the matter in favour of the assessee on 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 book and the books of accounts of the assessee were not challenged by the assessing officer. The Apex court further held that 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. 19 [1959] 35 ITR 416 (SC) Lakhmichand Baijnath Vs. CIT The Hon'ble Apex Court held that amount credited in business books is presumed as business receipt. When an amount is credited in business books, it is not an unreasonable inference to draw that it is a receipt from business. 20 ITANo.264/Hyd/ 2011 In the case of M/s. S.B. Steel Industries. Hon'ble Hyderabad Bench "A", of income tax appellate Tribunal held ....
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....counts with Annexure and schedules for the year under appeal. b. Month wise details of sales and purchases. c. Details of month wise cash sale and cash deposit in bank. d. Periodical details of cash sales, cash deposited in bank and cash balance. e. Comparative details of cash deposit in banks and cash sales during different periods of financial years 2015-16 and 2016-17 relevant to assessment years 2016-17 and 2017-18 respectively. f. Copy of VAT Returns filed with VAT Department of Govt. of State of Rajasthan for the period 01/04/2016 to 31/03/2017 relevant to year under appeal and VAT assessment order for F.Y. 01/04/2016 to 31/03/2017 relevant to A.Y. 2017-18. g. Ledger accounts of purchases for the period 01/04/2016 to 08/11/2016 accompanied with purchase invoices. h. Copy of ledger accounts of dealers to whom payment made after 08/11/2016. i. Copy of cash book, ledger, journal, bank statement and invoices manually given to the AO in response to summon u/s. 131 of the I.T. Act issued to the assessee by the AO during assessment proceedings. j. Copy of delivery challans furnished by the assessee. ....
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....erent defects in the books of account and as against that the relevant assessment order has rather been framed by the AO by taking the figures of net profit on the basis of assessee's books of accounts. On this aspect, the different judicial authorities have given respective findings and the consensus of the judicial decisions emerges out of identical circumstances are that merely because of difference in ratio of cash sales between two periods of the previous year and the year under assessment or difference in ratio of preceding assessment years as compared to the year under assessment an AO cannot resort to the provisions of Section 145 and section 68/69A/115BBE etc of the Act for making additions in the total income. In support of these submissions, the assessee has relied upon the decision of Coordinate Bench, Jaipur (supra) which has form part of judicial pronouncement. Even otherwise, there is no findings by the lower authorities that in issuring cash invoices, the assessee had disregarded the provisions of Income Tax Act including Section 269ST of the Act which inter alia says that it will be infringement of law if an individual cash invoice exceeding Rs. 2,00,000/- is issue....