TaxTMI 
TaxTMI 
2024 (10) TMI 993
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....d. AO making addition of cash advance received from customers amounting to Rs. 1,71,28,000/- as unexplained cash credit u/s 68 of the Act. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the addition of Rs. 1,71,28,000/-. 2. In the facts and circumstances of the case in law, National Faceless Appeal Center/ld. CIT(A) erred in invoking the provisions of section 115BBE for taxing the addition made of Rs. 1,71,28,000/- u/s 68 of the Act. The action of ld. CIT(A) is illegal unjustified arbitrary and against the facts of the case. Relief may please be granted by deleting the addition of Rs. 1,71,28,000/-. 3. The assessee craves his right to add, amend, or alter any of the grounds on or before the hearing." 3. Succinctly, the fact as culled out from the records is that the assessee has filed return of income on 30.10.2017 declaring total income of Rs. 3,50,470/- which was processed u/s 143(1) of the I.T. Act. Subsequently, the case was selected for Scrutiny through CASS. Accordingly, notice u/s 143(2) of the Income- tax Act, 1961 was issued on 13.08.2018 and served upon the as....
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.... & hard to digest non real/illusory facts. Ld. AO thus examined the submission of the assessee and appraised very carefully but found not acceptable, in as much, same is far-fetched from reality & has no tangible basis / rationale and thus was rejected on account of the following observations: 1. That the assessee has commenced the business in FY 2014 but till 08.11.2016 there were no sales or sales were so negligible, which itself casts doubt about the existence of operation of any business activity prior to 08.11.2016. The tabulated sheet of turnover depicted in return is as under, which will lay credence to the above version:- FY Turnover as per ITR Whether Audited or Income u/s 44AD Remarks 2016-17 9,12,500/- 44AD Income shown from Legal Profession 2015-16 6,30,990/- 44AD Income shown from Legal Profession 2014-15 4,50,270/- 44AD Income shown from Legal Profession 1. It will also be imperative to mention that the nature of business mentioned in all ITR's prior to & including ITR of relevant year, is Legal Profession. Therefore, even the fact that above turnover for preceding years were from Business of Jewell....
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....2379;ई अग्रिम नहीं दिया है। जिसमें आप द्वारा चाही गई जानकारी का विन्दुवार विवरण निम्न प्रकार से है - 1. दिनांक 17-10-16 से 08-11-2016 में श्री नितिन विजय को गोल्ड के विरुद्ध मेरे द्वारा किसी प्रकार का एडवांस नहीं दिया गया है। ....
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....ed to have received advances for sale of jewellery is still unproved, what to say of genuineness & creditworthiness. 2. That the verification of Audited balance sheet & Profit & loss A/c details of purchases & sale etc. revealed that, neither there was opening stock of gold ornaments available with the assessee nor there were purchases of gold ornaments prior to 09.11.2016 by the assessee The Ist purchase made by the assessee was on 12.11.2016 le. after demonetization was announced Therefore, without any ounce of doubt, it can very well be stated that the assessee did not possess any stock whatsoever, when the alleged whopping advances of Rs. 1,73,56,000/- were received by the assessee. It is fact on record that assessee since inception of his business in 2014 was engaged in very petty volume or say negligible volume therefore there cannot be any market reputation or goodwill of the business which may lead to receipt of such huge sum from parties and that too as advance for future supply by the assessee. Further, to fortify the contention Reliance is also placed upon celebrated judgment of Hon'ble Apex court in the case of CIT v Durga Prasad More 82 ITR 540(SC) wherein....
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.... in the backdrop of the above observations, it is evident that the assessee has failed to prove or explain the credit into books of accounts. The assessee has emphatically failed to prove even the identity of the person from whom advances alleged to have been received, what to say of genuineness or credit worthiness of the advance giving parties." As the assessee did not discharge the initial burden casted upon him the case of the assessee falls within the parameters of section 68 of the Act in as much, the assessee maintains the books of accounts, there are credits into these books of account on account of advance from parties and the assessee failed to prove the nature and source of credit the advance receipts vouchers, sale bills & etc., are self servicing and fabricated with the sole intend to explain the unexplained cash of Rs. 1,73,56,000/- and thus all the explanation / documents furnished by the assessee were not considered and a sum of Rs. 1,73,56,000/- found credits into the cash book was considered as unexplained cash credits as per provision of section 68 of the Act. 4. Aggrieved from the order of Assessing Officer, assessee preferred an appeal before the ld. CIT(....
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....and lastly the genuineness of transactions. Similarly, in the case of CIT v. Precision Finance (P.) Ltd [1994] 208 ITR 465 (Cal)] it was observed that it is for the appellant to prove the identity of creditors, their creditworthiness and genuineness of transactions". It is thus also a settled legal position that the onus of the appellant, of explaining nature and source of cash advance received, does not get discharged merely by filing self generated documents and without any other third party evidence or authentic documentary evidences The genuineness of the transaction as a whole is thus a very important and critical factor in the examination of explanation of the appellant, as required under section 68 of the I. T. Act. 3.4.4 It is also important that when we examine the genuineness of the transactions entered into by the appellant, we must also bear in mind Hon'ble Supreme Court's observation in the case of CIT v. Durga Prasad More ((1971) 82 ITR 540 (SC)) to the effect that "Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before....
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....is one of the most important, fundamental and critical factor in determining whether explanation given by the appellant is acceptable or not is its genuineness and this genuineness is to be examined in the light of ground realities, rather than random extracts from judicial precedents isolated from their true context as an exposition of law on a standalone basis 3.4.7 Keeping in mind that above legal position, briefly the facts of the case as stated is that the appellant filed the return of income on 30.10.2017 declaring total income of Rs. 3,50,470/-. During the course of assessment proceedings the AO found that appellant has deposited cash of Rs. 1,71,28,000/- in the bank account no. 200999903652 maintain with Indusind Bank and Rs. 2.28.000/- in the bank account no. 677101500312 maintain with ICICI Bank during the demonetization period from 09.11.2016 to 31 12 2016 The appellant explained the A.O that the source of cash deposited into bank account of Rs. 1,73,56,000/- is advance received from customers towards supply of gold bars which has been received just prior to the eve of demonetization period and between the period from 17.10.2016 to 08.11.2016. This explanation o....
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....m 93 persons as advances on 08.11.2016 which results into available cash balance of Rs. 1,70,93,907/- as at the end of 08.11.2016 out of which the appellant made deposit of Rs 1,73,56,000/- into bank account on various subsequent dates. Thus the A.O. was of the opinion that cash book furnished by the appellant is merely self serving document prepared with sole intent to cloth the unexplained income with valid & legal backing and nothing more & thus same is without any base and hence n_ reliance on same can be placed. 3.4.10 Considering the above facts of the case, the A.O. held that the appellant has failed to prove and explain the nature and source of credit appearing in books of accounts on account of said cash deposits. It is held by the A.O. that the appellant failed to prove even the identity of the person from whom cash advances is alleged to have been received, what to say of genuineness of transaction or credit worthiness of the advance giving parties. 3.4.11 It is also observed by the A.O. that the advance receipts vouchers, sale bills & etc furnished by the appellant are merely self-serving documents and are fabricated with the sole intent to explain the....
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....iod is held as explained The A.O is therefore directed to delete this addition of Rs. 2,28,000/- 3.4.15 With regard to the balance cash deposit of Rs 1,71,28,000/- the appellant alleged that the same is advance received from 112 customers towards purchase of gold bars which was deposited in two of the bank accounts and such deposits in bank, were utilized for making payments against purchases of gold bars. The appellant furnished details of purchase of gold bars as under:- Particulars Amount in Rs. Kahndelwal Impex 1,96,24,625/- Shrinath Enterprises 17,82, 180/- Sita Ram & Sons 84,165/- Mansa Enterprises 4,43,698/- SN Enterprises 12,46,068/- Total purchases 2,31,80,736/- 3.4.16 Copies of sample purchase invoices are enclosed by the appellant in the written submission made. It is submitted that the appellant used to sale the gold bars only on order based and hence, there was no opening stock available with the appellant. The gold bars are sold in the same condition in which they are purchased and no modification in such bars is done by the appellant. 3.4.17 Before proceed further, the details extracted from the cop....
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....ce to the appellant. It is calculated from the purchase bills provided by the appellant that the total number of gold bars purchased by the appellant is not sufficient to supply it to 112 persons from whom cash advance is alleged to have been taken. It is further to be noted that the appellant has alleged to have taken cash advance of different amount from different persons then it is not known/explained by the appellant as to how he was going to supply gold bars to each individual of different weights especially considering that the appellant is selling the gold bars as it is, as purchased by him and the weight of gold bar is of fixed standard. Also the total weight of gold bar as per the bills provided by the appellant do not show that the appellant has purchased at least 112 pieces of gold bars so that the same can be supplied to the persons giving advance. It is further noted that gold rate of 24 carat on 08.11.2016 in Rajasthan was in the range of Rs. 3000/- per gram. Therefore wherever the appellant has received the exact amount of cash advance of approximate Rs. 3,00,000/- he can supply gold bar of 100 grams to such person, but where the cash advance received do not commensu....
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....t, the source of which is the cash advance received from 112 persons which itself is considerec not genuine transaction. Therefore it is not free from doubt that the appellant is accommodating these so called gold bar suppliers from whom cash received is deposited in the appellant's bank account against which cheques are issued to these so called gold bar suppliers and to give it a colour of genuine purchase bils are obtained from such suppliers giving vague description of gold bars purchased and to show the source of cash deposit the list of 112 persons is prepared showing cash advance received. As stated by the AO in the assessment order in majority of the cases, the appellant has not given proper identification of the person from whom cash advance is received and wherever name and address is given or PAN is given, in majority of the cases, enquiry made by the A.O did not establish the genuineness of the transaction of acutance received from such persons. The appellant even do not have any documentary evidences which can authenticate that against each advance received by the appellant, appropriate weight and value of gold bar is supplied to such person. It is not a case that ....
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....A.O. has not rejected the books of accounts meaning thereby all the entries in the books of accounts recorded by the appellant are correct and the source of cash deposited in bank is advances received against sales and such sales are forming part of trading account of the appellant and the appellant has already offered income on the same as revenue receipt in this regard, as stated earlier the A.O. in the assessment order has held that the appellant failed to discharge onus cast upon him of proving the identity of the persons from whom cash advance is alleged to have been received and genuineness of transaction of receipt of advance and supply of gold bars. Therefore it is not the case that the A.O. has doubted the trading results of the appellant emanating from the books of accounts maintained. The A.O's scope of verification was limited to the issue of the genuineness of the transaction of receipt of cash advance from 112 persons against proposed supply of gold bars in future which is alleged to be the source of cash deposit of Rs. 1,71,28,000/- found deposited in the appellant's bank account in the form of SBNs during the demonetization period. 3.4.24 The appell....
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.... transaction as whole must point towards the impugned transaction being a regular transaction in the normal course of business something which is clearly missing. The burden is thus on the appellant to prove the nature and source of credits in his books of accounts, to the satisfaction of the Assessing Officer which the appellant failed. 3.4.27 In view of the above facts of the case and in law, I am of the considered opinion that the appellant has failed to discharge the onus cast upon it by provision u/s 68 of the I. T. Act to establish the genuineness of transaction of receipt of cash advance amounting to Rs 1,71,28,000/- I therefore concur with the view of the AO. that the amount of Rs. 1,71,28,000/- found credited in the books of accounts of the appellant during the relevant previous year is unexplained and therefore required to be brought to tax as unexplained cash credit u/s. 68 of the IT. Act. The action of the A.O in making addition of this amount of Rs. 1,71,28,000/- is therefore confirmed. This ground of appeal raised by the appellant is thus dismissed. 4.1 The second ground of appeal raised by the appellant read as under:- In the facts and circ....
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.... 1-2: ADDITION OF RS 1,71,28,000 U/S 68 AND INVOCATION OF SECTION 115BBE 1. ASSESSING OFFICER AND NFAC 1.1. Ld. AO made additions amounting to Rs 1,73,56,000 u/s 68 for the cash deposited in the bank, received from cash sales, during the period of demonetization treating the same to be unexplained. Additions made by the ld. AO were upheld by the NFAC. 2. SUBMISSIONS 2.1. Assessee is engaged in the business of retail trade of gems & jewellery. During the relevant year assessee had received advance of 1,71,28,000 against sales of gold bars before the period of demonetization. Balance of Rs 2,28,000 (1,73,56,000-1,71,28,000) deposited in bank was out of the accumulated savings of the assessee. 2.2. Advance so received from the customers was then deposited in two of the bank accounts and such deposits in bank, were utilized for making payments against purchases of gold bars. The said gold bars were purchased from the following parties Particulars Amount in Rs Khandelwal Impex 1,96,24,625 Shrinath Enterprises 17,82,180 Sita Ram & Sons 84,165 Mansa Enterprises 4,43,698 S N Enterprises 12,46,068 Total Purc....
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....f the said event are merely a coincidence. 2.10. Ld. AO has doubted the sales only on the account that the same have taken place in cash and huge cash against such sales have been received prior to one month of announcement of demonetization. 2.11. The cash sales are one of the common practices in jewellery sector. The law nowhere prohibits cash sales. The assessee by selling the same in cash has not violated any of the provisions of the Act. 2.12. The assessee maintains regular books of accounts and the same are audited under the provisions of section 44AB of the Income Tax Act, 1961. Also, there are no adverse remarks of the auditors regarding cash sales recorded in the books of accounts. 2.13. The assessee had submitted details of sales, purchase, stock register before ld. AO but ld. AO only on the basis of mentioning nature of business as legal profession in ITR Form has assumed that turnover of the assessee is unverifiable. Ld. AO has erred in ignoring the material facts which clearly indicate that the assessee is engaged in retail trade of gem and jewellery. It is submitted that assessee had inadvertently mentioned the nature of business as....
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....sales and such sales are forming part of trading account of the assessee. The assessee has already offered income on the same as revenue receipt. 2.20. Ld. AO has misdirected himself that if the assessee has made sales only to the tune of Rs 16,51,348 till 07.11.2016, huge amount of sales in further period of the financial year cannot be made. The sales in jewellery sector is seasonal and is dependent on various occasions like marriage, festivals. 2.21. Ld. AO has alleged that the assessee received Rs 1,20,12,101 on 08.11.2016 as advances which resulted in increase in cash balance of the assessee. It is submitted that on the eve of sudden announcement of demonetization i.e., 08.11.2016, there was huge rush for buying of gold. The assessee took the same as business opportunity and took advances for selling the gold bars. The assessee made all the purchases in the month of November-2016 itself and simultaneously made sales as well. 2.22. It is also incorrect assumption of ld. AO that if the business premises of the assessee is not situated in posh area or on main road, the business cannot be run from that premises. 2.23. Reliance is placed on follo....
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....e sales as unexplained cash credits, as no details of sales were provided, and made addition of Rs. 4.72 crores u/s 68 r.w.s. 115BBE. Hon'ble Bench held that where assessee has 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. The relevant para 9 is reproduced hereunder: "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 L....
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....aken against cash payment, it is hardly necessary for the seller to bother about the name and address of the purchaser." The Hon'ble High Court at Para 4 of the order finally held as under: "Since, having regard to the nature of the transaction and the manner in which they had been effected, there was no necessity whatsoever for the assessee to have maintained the addresses of cash customers, the failure to maintain the same or to supply them as and when called for cannot 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." 2.27. Ld. AO, unnecessarily emphasising the need of complete identity of buyers in respect of cash sales, held the same to be non-genuine (contrary to the legal provisions) and further erred in invoking the provisions of Section 68 in respect of such cash sales. At....
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....account. When cash deposits have been made from the cash balance available in the books of account, in my view, there is no question of treating the said deposits as unexplained cash deposit as opined by the Assessing Officer. 5. The Ld A.R relied on certain case laws which are relevant to the issue under consideration. In the case of Lakshmi Rice Mills (1974) 97 ITR 258 (Patna), it has been held that, when books of account of the assessee were R.S. Diamonds India Private Limited 3 accepted by the revenue as genuine and cash balance shown therein was sufficient to cover high denomination notes held by the assessee, then the assessee was not required to prove source of receipt of said high denomination notes which were legal tender at that time. In the case of M/s. Hirapanna Jewellers (ITA No. 253/Viz/2020 dated 12.5.2021), it was held that when the cash receipts represented the sales which has been duly offered for taxation, there is no scope for making any addition under section 68 of the Act in respect of deposits made into the bank account". 2.29. Reliance is placed on the judgment of the Hon'ble Supreme Court in the case of Lalchand Bhagat Ambica Ram v. CIT (1959) 37 I....
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....st on the Bengal-Behar border was also reported to be a great receiving centre for such commodities. Having regard to all these circumstances, the Income-tax Officer rejected the appellant's explanation that the high denomination notes formed part of its cash balances and treated the sum of Rs. 2,91,000 as the appellant's secreted profits from business and included it in its total income and assesseed the appellant for the said assessment year on the income of Rs. 1,39,117. Dealing with the excess profits tax assessment, he also held that the said income was derived from the business of the appellant and hence it was liable to excess profits tax also." 2.30. Ld. AO invoked provision of Section 68 in respect of sales. Section 68 deems non-income to be income. In the instant case, the credits by way of sales were already offered for tax. Hence, Section 68 per se cannot be invoked. Provisions of Section 68 can only be invoked in cases where an assessee is unable to explain the source of a particular receipt to the satisfaction of the Assessing Officer. These provisions have no application in case where an amount already disclosed by the assessee as his income, while filing th....
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....essee was maintaining complete stock tally, the sales were recorded in the regular books of accounts and the amount was deposited in the bank account out of the sale proceeds, therefore, the addition made by the AO and sustained by the Ld. CIT(A) was no justified. Sales made by the assessee to cover the cash deposited in the bank post demonetization, was sufficient source of the cash deposited i.e.; the sales from the existing stock available with the assessee and was well explained, therefore, the addition made by the AO and sustained by the Ld. CIT(A) was not justified. - Decided in favour of assessee. 2.34.ii. ITAT, Jaipur Bench, in the case of Motisons Jewellers Ltd., ITA Nos. 161 and 178/JP/2022 [CLC - Page 1-93], vide order dated 29.09.2022, dismissed the appeal of the Department. Hon'ble ITAT relied upon the decision of Hon'ble Rajasthan High Court in the case of Smt. Harshil Chordia Vs. ITO reported at MANU/RH/0851/2006 : 298 ITR 349 (Rajasthan-HC) and held as under:- "...Thus, the fact of the case on hand is similar to the jurisdictional high court decision cited by the Ld. AR of the assessee. The Ld. AR of the assessee also relied upon the coordinate Jai....
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....d as income by the assessee, are deemed to be income of the assessee. A deeming fiction of income cannot apply to an item which is already treated as income by the assessee himself. The question of deeming an item to be income can only arise if the item is not otherwise disclosed as income. 2.37. Hon'ble Delhi High Court, in the case of Keshav Social and Charitable Foundation (2005) 278 ITR 152, considered a situation where the assessee, a charitable trust, had disclosed donations received by it as its income, and claimed exemption u/s. 11. The Assessing Officer, on finding that the assessee was unable to satisfactorily explain the donations and the donors were fictitious persons, held that the assessee had tried to introduce unaccounted money in its books by way of donations and, therefore, the amount was to be treated as cash credit u/s. 68. The Delhi High Court held that section 68 did not apply, as the assessee had disclosed such donations as its income. 2.38. In view of the above, since section 68 is not applicable in the instant case, the very invoking of the provisions of section 115BBE is illegal and deserves to be quashed. 2.39. It is also pertin....
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.... the first appellant proceedings. Further, the case laws as relied upon by the NFAC were not relevant for the case at hand, as the assessee had already added the amount of sales as part of his income and had paid due taxes on it. Accordingly, such receipts were outside the purview of Section 68. In view of the above, application of Section 68, read with Section 115BBE, by the ld. AO, to the amount of Rs. 1,71,28,000 accounted for sales by the assessee, is illegal and deserves to be quashed." 6. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: S. No. Particulars Page No. Quick Ref. 1. Copy of the order of ITAT, Jaipur Bench in the case of Motisons Jewellers Ltd, ITA No. 161 and 178/JP/2022 1-93 73-74 2. Copy of the order of ITAT, Jaipur Bench in the case of Chandra Surana, ITA No. 166/JP/2022 94-105 104 3. Copy of the order of ITAT, Jaipur Bench in the case of Mahendra Kumar Agarwal, ITA No. 172/JP/2022 106-143 142-143 4. Copy of the order of ITAT, Jaipur Bench in the case of Raj Kumar Nowal, ITA No. 165/JP/2022 144-182 181-182 ....
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....The purchase made by the assessee is duly verifiable and not disputed. The stock record were submitted and were not disputed. In support of this contention, the ld. AR of the assessee relied upon various decision quoted in the written submission so filed by the assessee. As regards the contention of ld. AO that previously the assessee filed the return of income under presumption taxation scheme as per provisions of section 44AD of the Act that cannot be the reason to disbelieve the result of the current year. The ld. AO based on the information so supplied by the assessee as many as 40 notices were served, this itself suggest that the details supplied by the assessee are correct. The assessee supplied all the details related to customer though it was not required to maintain to the extent it was maintained by the assessee. Out of the notices so issued 20 parties submitted the reply 18 parties confirmed the transaction and only 2 parties denied. That two parties statement that too behind the back cannot be a reason to disbelieve the sale duly recorded by the assessee. As it is widely reported in the newspapers and print media that across the country the sale of gold bar and ornament....
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....ng similar to the case of the CIT vs. Durga Prasad More (1972) 82 ITR 540 (SC) decided by the Hon'ble Apex Court, wherein submitted is not real is not based on the set of fact and therefore, the fact of the case being similar theory advances receipt is not correct. The assessee has no stock of gold bar as on the date of receipt of advances and the assessee has no capacity of the stock worth of rupees deposited in to the bank. Therefore, nobody can advance when the assessee is not having any stock of gold bar with him. The notices issued by the Assessing Officer were not served by the assessee two person categorically stated that they have not given any advances to the assessee the place of the business has been visited by the inspector wherein no sign board was appearing the assessee has not done so much business in the past. Therefore, the assessee failed to prove the source of money deposited into the bank and therefore, the provisions of section 68 of the Act were correctly invoked in the hands of the assessee. The assessee has also not submitted the details of purchase of gold bar and therefore the quantitative details are also not deal with the sales made by the assessee and t....
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.... & Eastern Newspaper Society v. Commissioner of Income-tax 4 [1958] 34 ITR 807 (SC) SUPREME COURT OF INDIA A. GovindarajuluMudaliar v. Commissioner of Income-tax 5 [1971] 82 ITR 540 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. Durga Prasad More 6 [2007] 161 Taxman 169 (SC) SUPREME COURT OF INDIA Commissioner of Incometax v. P. Mohanakala 7 [1963] 50 ITR 1 (SC) SUPREME COURT OF INDIA Kale Khan Mohammad Hanif v. Commissioner of Income-tax 8 [1977] 107 ITR 938 (SC) SUPREME COURT OF INDIA Roshan Di Hatti v. Commissioner of Income-tax 9 [2016] 66 taxmann.com 288 (SC) SUPREME COURT OF INDIA Securities and Exchange Board of India v. Kishore R. Ajmera 10 HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.02.2019 Tax Case Appeal No. 128 of 2019 And C.M.P.No. 3353 of 2019 Smt. Tharakumari Appellant Vs. The Income Tax 11 [O1f9fi9c5e]r 82 TAXMAN 31 (CAL.) HIGH COURT OF CALCUTTA Commissioner of Incometax v. Precision Finance (P.) Ltd. 12 [1991] 56 TAXMAN 304 (CAL) HIGH COURT OF CALCUTTA Commissioner of Incometax v. United Commercial & Industrial Co. (P.) Ltd. 13 [2012] 18 taxmann.com 217 (Delhi) HIGH COURT OF DELHI Commissioner ....
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....cts. The Hon'ble Supreme Court delivered this decision while dealing with the reliability of a self-created document i.e. a trust deed in that case. The Hon'ble Supreme Court held that self-serving recital in any self-created document cannot be accepted without digging deeper. Whereas in the present appeal, the evidences are obtained from the third parties and are in nature of invoices or confirmations. Thus, the facts of both the cases are different and are inapplicable to the present case of the assessee. 6. P. Mohanakala [2007] 161 taxman 169 (SC) The present decision of the Hon'ble Supreme Court relates to Foreign Gifts and there were grave inconsistencies in facts and statements recorded as finds mention at para 2 of the order as under: "The dispute in all these appeals essentially relates to the addition made by the Assessing officer in respect of several foreign gifts stated to have been received by the assessee from one common donor namely Sampath Kumar. The gifts received were from one Ariavan Thotan and Suprotoman. It is during the enquiry by the revenue it is asserted that they were the aliases of Sampath Kumar." 7. Kale Kh....
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....and did not produce the relevant evidences. As against this, in the present appeal before the Hon'ble Tribunal, assessee fully participated before the lower authorities and submitted all evidences which the assessee was expected, under the law, to produce. 11. Precision Finance (P.) Ltd. [1995] 82 Taxman 31 (Cal.) The aforementioned case deals with genuineness of loans u/s 68. The company was a loan financing company and failed to prove the genuineness and credit worthiness of the persons granting loan. However, in the present case of the assessee, the issue pertains to cash sales. The same are already offered for taxation. The onus of proving a loan transaction and sales transaction are different and are contrary to the facts of the present case of the assessee. 12. United Commercial & Industrial Co. (P.) Ltd. [1991] 56 Taxman 304 (Cal.) The case deals with genuineness of loans u/s 68. It is submitted that onus of proving a loan transaction and sales transaction are different. In the present case, the cash sales are in question which are supported by adequate evidences. Therefore, the facts of both the cases are different. 13. Nova Promoters....
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....sued assessee complied the same and filed the details as called for by AO. Assessee filed E-return and is subjected to Audit as per provisions of section 44AB i.e Accounts of the assessee are subjected to tax audit and the turnover declared by the assessee for the FY 2016-17 stood at Rs 2,27,25,130/-. Upon verification of ITR & Tax Audit report e-filed by the assessee, ld. AO revealed that assessee has deposited cash of Rs 1,71,28,000/- in the bank account no. 200999903652 maintained with IndusInd Bank and Rs. 2.28,000/- in the bank account no. 677101500312 maintained with ICICI Bank Ltd., during the period of demonetization i.e., from 09.11.2016 to 30.12.2016. With a view to verify the source of cash deposited to the tune of Rs 1,73,56,000/- (Rs. 1,71,28,000 & Rs 2,28,000), the assessee was required to furnish the details of monthly sales (cash & credit), monthly Purchase (cash & credit) Monthly cash deposit into bank account for the relevant period i.e. 1 April to 08 Nov, 2016 for the financial year, 2015-16 & the relevant year i.e. 2016-17 Moreover, the details of Daily stock register, cash book & etc. was also asked from the assessee in specified format. The assessee submitted ....
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....serving documents. Therefore, with this observation ld. AO rejected the claim of receipt of advance of the cash deposited into the bank account by the assessee. When the matter carried before the ld. CIT(A) he has rejected the claim of the assessee were rejected broadly on the five reasons the assessee in the submission made before us countered those contentions and the same is extracted herein below for the sake of brevity: Contentions of NFAC Rebuttal Weight and number of gold bars are not mentioned in the purchase bills. Therefore, it is not known as to how many pieces of gold bars are purchased by the assessee. [NFAC Order, Page 23] Purchase invoices were submitted to the lower authorities. The details of the suppliers were mentioned in such invoices. Lower authorities did not carry out any enquiry directly from such sellers and simply raised allegations against the assessee. Appellant did not provide details and documentary evidences of the sales having undertaken [NFAC Order, Page 24] All the sales details were provided during the course of assessment proceedings which were completely ignored by the ld. AO. Difficult to accept that 93 persons physically c....
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....in majority part is correct. Merely two parties denied should not be considered as base to reject the evidence and records produced before the ld. AO. Ld. AO failed to prove that the details so furnished by the assessee are incorrect. After receipt of the advance the assessee purchased the goods and given the delivery of the same to various parties who submitted the advances. As is clear from the cash book that as on 08.11.2016 the assessee was having cash balance of Rs. 50,80,806/- and on 08.11.2016 assessee received a sum of Rs. 1,20,13,101/- as advances for purchase of gold/ gold ornaments. The money was received from 93 different persons. The assessee has submitted the details of the parties from whom the advances were received. The said advances were utilized to make the purchase and the same were considered as sales. Both the purchase and sales are not doubted merely the transaction of receipt of the advances is doubted merely on the reasons that the assessee has accumulated that money and on account of the demonetization deposited in the bank account. In fact the assessee submitted all the details and related to the parties giving advances to the assessee. Ld. AO in 58 cases....