TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 993
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....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 assessee through ITBA module and also through registered post on 20.08....
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....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 Jewellery alleged to be in the name of Planet Gems is still unverifiable. 2. That the verification of information /doc....
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.... 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। 2. जब एडवांस ही नहीं दिया गया....
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....ases & 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 apex court held that human probabilities, surrounding circumstances, circumstantial evidences etc are to be considered while deciding the taxation matters The AO is not expected to put blinkers on his eyes and m....
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....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(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: "3.4 Decision 3.4.1 All the contentions raised by the appellant have been carefully perused and considered. The sole issue involved in the ass....
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....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 them by applying the test of human probabilities Similarly, in a later decision in the case of Sumati Dayal v CIT [(1995) 214 ITR 801 (SC)] Hon'ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that. "This, in our op....
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....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 of the appellant was not found satisfactory to the AO for various reasons mentioned by the A.O. under para 5, page 2 and 3 of the assessment order, it is found by the A.O. that the nature of business mentioned in all the income. tax returns filed by the appellant including the return filed for the current a....
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.... 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 unexplained cash of Rs 1,73,56,000/- and thus all explanations /documents furnished by the assesso in this regard are considered non satisfactory hence the sum of Rs 1,73,56,000/- found credited into books of accounts out of advance from parties which was alleged to be subsequently used for making cash(SBN) deposit into bank on vari....
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....zed 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 copies of purchase bill is tabulated as under:- Name of supplier Date of purchase Description Quantity Value Khandelwal Impex 14.11.2016 Gold Bars 1000 Grams 30,57,690/- Khandelwal Impex 17.11.2016 Gold Bars 1000 Grams 30,000/- Khandelwal Impex 19.11.2016 Gold Bars 1546.470 Grams 46,78,000/- Khandelwal Impex 23.11.2016 Gold Bars 1000 Grams 29,77,500/- Khandelwal Impex 24....
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.... 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 commensurate with the value of gold bar, the appellant will not be in a position to supply gold bars to such persons Since he is not breaking the gold bar into pieces of different weight for different customers accordingly to the amount of cash advance received. Thus in respect of cash advance received is either of less or more amount than the price of gold bar, the appellant cannot supply gold bar to these persons The appellant has not provided any details or documentary evidences showing the weight and number of gold bars ordered by each of the 112 persons. The appellant ha....
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....h 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 the AO has accepted the genuineness of purchases made by the appellant. Nowhere in the assessment order the AD has certified that the purchase shown by the appellant is genuine. The A.O in the assessment order has held that the appellant has failed to prove the identity and genuineness of the alleged transaction of cash advance received, onus of which squarely lie on the appellant and it is held by the A.O. that the appellant failed to discharge this onus cast upon him. 3.4.21 With regard to appellant's further contention that the purchases and sales are interlinked and insep....
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....ansaction 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 appellant's last contention is that provisions of section 68 are not applicable to his case for the reason that credits by way of sales are part of trading account of the appellant and section 68 is only applicable on cash credits such as loans, share applications etc. In this regard, it needs to be stated that plain reading of provision wis 88 of the IT Act makes it abundantly clear that it is not limited only to credits appearing in the books of accounts in the nature of loans and share application money but the same is applicable to each and every credit appearing in the books of accounts maintained by the a....
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....0/- 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 circumstances of the case an d'in law, the id. AO has erred in making addition of cash advance received from customers a mounting to Rs. 1,73,56,000 as unexplained ca sh credit u/s 68 of the Act, and invoking the provision of section 115BBE. The action of the Id. AO is illegal, unjustified arbitrary and again st the facts of the case. Relief may please be granted by deleting the addition of Rs. 1,73,56,000 and liable for tax at normal rates. 4.2 Decision 4.2.1 In view of the detailed discussion made, this ground of appeal need no adjudication. The same is therefore dismissed. 5.1 The third ground of appeal raised by the appellant read as....
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....eceived 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 Purchases 2,31,80,736 Sample purchase invoices are enclosed from Paper Book Pages 1 to 14 which were submitted to the lower authorities. 2.3. It is submitted that the assessee used to sale the gold bars only on order basis and hence, there was no opening stock available with the assessee. The gold bars are sold in the same condition in which they are purchased and no modification in such bars is done by the assessee. 2.4. It is also submitted that in March 2016, jewellery sector was subjected to Excise Duty Laws for the first time, which was widely protested by the jewellers across India. The protest went on for more than 6 months and various representations were made by jewellers across India at various forums. Even all the associations and forums of jewellers across India ....
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....e 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 legal profession but all the actual evidences placed on record make it evident that the assessee is engaged in retail trade of gems and Jewellery. 2.14. It is submitted that for the relevant year accounts of the assessee are audited u/s 44AB of the Act and nature of business has been mentioned as retail trade in the audit report [Form 3CD]. Ld. AO has ignored the same and also stated that the assessee had filed return of income u/s 44AD instead of 44AB for the relevant year i.e., AY 2017-18. This makes it clear that the details are not completely verified by ld. AO. 2.15. The assessee had received advances from about 112 parties. It is important to note that out of total advance received amounting to Rs 1,71,28,000 the assessee had already provided details of persons having PAN of Rs 51,81,897 and in which the details of PAN were not available, address of s....
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....ultaneously 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 following judgements of jurisdictional ITAT: 2.23.i. Mahesh Kumar Gupta vs. ACIT [2023] 151 taxmann.com 339 (Jaipur Trib) [CLC: 316-335] Respectfully following the consistent view and after considering the factual matrix of the cash on hand in our considered view the addition made cannot sustain and therefore, we vacate the addition of Rs. 80,00,000/- made under section 68 of the Act as the same cannot be made without rejecting the books of account of the assessee regularly maintained by the assessee and the said cash deposited is duly supported by the entries passed in the books of account and part of the sale accepted by the AO. 2.23.ii. ACIT Central Circle-1 vs. Shri Mahendra Kumar Agarwal ITA No. 172/JP/2022 [CLC Pages 106-143] We agree with the findings of ld. CIT(A) that the AO has not brought any material on record to establish that the sale bills are bogus nor any evidence indicating that such sales was bogus and merely....
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....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." 2.25. Attention is drawn towards Hon'ble ITAT, Delhi Bench in the case of Agson Global Pvt. Ltd vs ACIT (2020) 115 taxmann.com 342 [CLC Pages 206 to 279]. The facts in this case are assessee company was engaged in purchase and sale of dry fruits and other grocery items. It deposited Rs. 180.53 crore post-demonetization in its Bank accounts, out of sale proceeds. During the course of assessment proceedings, assessee submitted details of closing stock, list of debtors, details of purchases and sales party-wise for year, VAT returns etc. However, AO made an addition of Rs. 150.53 crore as income u/s 68. CIT (A), restricted addition to Rs. 73.13 crores. Hon'ble Bench deleted the addition. The relevant para 126 (vii) is reproduced hereunder: "It is not the case of the revenue that assessee has not shown the relevant stock register before the assessing officer. The assessee has maintained the complete stock tally in its accounting software. Such ....
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....o be non-genuine (contrary to the legal provisions) and further erred in invoking the provisions of Section 68 in respect of such cash sales. Attention is drawn towards the judgment of the Hon'ble Jurisdictional High Court in the case of Smt. Harshila Chordia v. ITO (2008) 298 ITR 349 [CLC Pages 310 to 315] wherein the Hon'ble High Court held as under: "So far as question No. 2 is concerned, apparently when the Tribunal has found as a fact that the assessee was receiving money from the customers in hands against the payment on delivery of the vehicles on receipt from the dealer the question of such amount standing in the books of account of the assessee would not attract section 68 because the cash deposits becomes self-explanatory and such amounts were received by the assessee from the customers against which the delivery of the vehicle was made to the customers. The question of sustaining the addition of Rs. 6,98,000 would not arise." "We, therefore, hold that no addition was required to be made in respect of Rs. 6,98,000, which was found to be the cash receipts from the customers and against which delivery of vehicle was made to them." 2.28. Attention is invited towards th....
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....ced on the judgment of the Hon'ble Supreme Court in the case of Lalchand Bhagat Ambica Ram v. CIT (1959) 37 ITR 288 [PB 198-213] in which judgment is delivered in the background of promulgation of High Demonetization Bank Notes (Demonetization) Ordinance, 1946, with effect from January 12, 1946. The Hon'ble Apex Court laid down a ratio that accepting an explanation or books in part and rejecting the same for the remaining part is not justified. It is submitted that in the present appeal, same explanation was accepted for cash sales of Rs15,00,000/- and remaining amount of Rs 72,25,000/- was held to be non-genuine sales rejecting the same explanation. The Hon'ble Apex Court, in the case of LalchandBhagat (supra) further laid down a ratio that various probabilities on a macro level should not influence the decision of the AO in believing that on those macro reasons, the assessee might also be having black money. In the case before the Hon'ble Supreme Court, the ld. AO had made additions in the background of the following facts noted by the ld. AO, which find mention in the order of the Hon'ble Supreme Court at page 7 of the order: "The Income-tax Officer found that the appellant's ....
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....cation in case where an amount already disclosed by the assessee as his income, while filing the Return of Income on which no further addition has been made by the ld. AO, during the course of assessment proceedings. 2.31. Section 68 creates deeming fictions, whereby certain amounts which are not considered 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 an income. Section 68 converts non-income into income and has no application where income is already offered for tax. 2.32. 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, ....
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....see also relied upon the coordinate Jaipur ITAT decision also on the issue and the revenue not prove the sale made by the assessee which is executed after giving the goods to the customer, duly reflected in the invoice issued, assessee having sufficient stock in the books, sales is duly reflected in the books of accounts supported by payment of VAT. Therefore, the contention of the revenue based on the facts and circumstance of the case is not accepted and we see no reason to find any fault in the detailed reasoned finding in the order of the Ld. CIT(A). Thus, we sustain the order of the Ld. CIT(A) and based on these observations the appeal of the revenue in ITA No. 161/JPR/2022 stands dismissed..." 2.34.iii. ITAT, Jaipur Bench, in Chandra Surana, ITA No. 166/JP/2022 [CLC Page 94-105] held that "...It is also observed from the assessment order that the AO had not rejected the books of account of the assessee as no contrary material was available with him to reject the books of account of the assessee. As regards the addition of Rs. 2,90,93,500/- made by the AO by applying the provisions of Section 68 of the Act, it is noted that provisions of Section 68 are not applicable on the ....
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....the books of accounts have not been rejected by the ld. AO or NFAC under Section 145(3). Under such circumstance, no addition can be made to the income of the assessee under Section 68. 2.40. The aforementioned legal and factual position was submitted to the NFAC during the course of first appellant proceedings, however without any cogent basis were not accepted by the NFAC. 2.41. Rebuttal to certain contentions raised by NFAC in its order from Page 21 to 28 are set out hereunder: - 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. ....
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....1 183-190 188-189 6. Copy of the order of ITAT, Kolkata Bench in the case of Senco Alankar, ITA No. 10/Kol/2021 191-197 196-197 7. Copy of the order of ITAT, Visakhapatnam Bench in the case of Hirapanna Jewellers ITA No. 253/Viz/2020 and C.O. No. 02/Viz/2021 198-205 205 8. Copy of the order of ITAT, Delhi Bench in the case of Agson Global (P) Ltd. 115 taxmann.com 342 (Delhi-Trib.) 206-279 275 9. Copy of the order of High Court of Delhi in the case of PCIT vs. Agson Global (P.) Ltd,134 Taxamann.com 256 (Delhi) 280-309 280 10. Copy of the order of High Court of Rajasthan in the case of Smt. Harshita Chordia 298 ITR 349 (Rajasthan) 310-315 314-315 11. Copy of the order of ITAT, Jaipur Bench in the case of Mahesh Kumar Gupta, ITA No. 149/JP/2022 316-335 316 S. No. Particulars Page No. 1. Copy of Purchase Invoices for AY 2017-18 1-14 2. Copy of Written Submissions filed by the assessee company before ld. CIT(A) in the first appellate proceedings 15-28 7. In addition to the written submission so filed the ld. AR of the assessee submitted that in this appeal effectively the assessee has taken two grounds, one ground related to addition made u/s ....
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....erified the contention of the assessee. Since the assessee dealing in gold bar there is no need to have the opening and closing stock by the assessee. The spike in the sales is on account of Diwali and marriage seasons. This aspect has not been appreciated by the lower authorities. As regards the contention of the business place of the assessee, ld AR submitted that it should not be decisive factor of the sales made by the assessee. Ld. AO should have appreciated the fact that out of 58 notices so issued, 40 notices were served itself shows the genuine of the transactions recorded in the books of account of the assessee. 8. Per contra, Ld. DR vehemently argued that this case of the assessee is required to be seen differently as the assessee has deposited heavy amount of cash of the demonetized currency into his bank account. The intention of the announcement of demonetization was to unearth the unaccounted money. As is evident from the record that the assessee has deposited huge amount of money of demonetized currency in the bank account. Based on eyewash documents which shows no weight of the gold was shown and they merely for the name sake filed the details. Therefore, the provi....
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....d. Subsequent, theory of sales made by the assessee cannot prove the unexplained receipt money by the assessee. The decision cited by the ld. AR of the assessee are on different on fact and therefore, in the absence of onus costed upon the provisions invoked by this section 68 of the Act is correct and required to be sustained. 9. In the rejoinder, the ld. AR of the assessee stated that the principles of probabilities falls enquiry of the assessee, the assessee has received advances and notices issued in majority of the cases have been served and replies were also received and therefore, the decision of Durga Prasad More (supra) cited by the ld. DR in fact in support of the case of the assessee. The Revenue authority has not debited purchased made by the assessee, every seller on his own selling silent of the case when the assessee has received the money in advance and thereby thereafter delivery of goods for which there is not contrary material placed on record by the Revenue even though the details of parties from whom the advances received were given to the lower authorities out of 58 notices 40 notices were served so burden to safety to the Revenue. After given all the details....
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....dha v. Deputy Director of Income-tax, Circle-1(1), International Taxation 10. The ld. AR of the assessee filed a detailed distinguishing note on the decisions relied by the revenue and the same is reiterated herein below: "During the course of hearing before the Hon'ble Bench of the captioned appeal, Id. DR relied upon certain judicial pronouncements. The same are not applicable in the instant case. The same are distinguished hereunder for the sake of ready reference 1. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta) The decision of Hon'ble High Court is not applicable to the facts of the present case. The above decision involves the transaction of long-term capital gains in which the price of the shares were inflated. However, the facts of the assessee's case are altogether different and, therefore, the case law is not applicable. 2. Sumati Dayal vs. CIT [1995] 80 Taxmann 89 (SC) The decision of the Hon'ble Supreme Court is not applicable to the facts of the present case, as the transactions, involved in the present case before the Hon'ble Tribunal, are fully supported by evidences. Therefore, the same are not applicable 3. Indian & Eastern Newsp....
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....e present appeal. This decision of the Hon'ble Supreme Court rather supports the case of the assessee because Hon'ble Supreme Court has held: "We concede that the question as to the source from which a particular income is derived is one which has to be decided on all the facts of the case." 8. Roshan Di Hatti [1977] 107 ITR 938 (SC) The aforementioned case deals with the source of capital introduced by the assessee, The source of such capital was in question and factors did not justify the Tribunal's inference of calculating the value of the assets held by the assessee. The courts ruled in the favour of the assessee. The fact of sales and capital of the assessee are two different aspects and, therefore, the facts are contrary to the case of the assessee. 9. Securities and Exchange Board of India v. Kishore R. Ajmera [2016] 66 taxmann.com 288 (SC) The present decision of the Hon'ble Supreme Court is with reference to the following Acts and has no bearing on the proceedings under the IT Act, 1961: "Securities and Exchange Board of India Act, 1992, Securities and Exchange Board of India (Stock Brokers and Sub- Brokers) Regulation, 1992 and the Securities....
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....th respect to the cash deposit which are generated out of cash sales. Therefore, both the cases are altogether different. 14. N.R. Portfolio (P.) Ltd. [2013] 29 taxmann.com 291 (Delhi) This decision of Hon'ble Delhi High Court is delivered under different set of facts and context. The sole issue was of share application money received. However, the present case involves the issue of cash deposits which are generated out of cash sales. Therefore, both the cases are delivered in different context. 15. Hersh W. Chadha [2011] 43 SOT 544 (Delhi) The decision of Hon'ble Delhi High Court is on different set of facts. The issue under consideration was of commission received from Govt of India which was not declared in return of income by the assessee. The same was credited in foreign bank accounts. However, the facts of this case do not apply to the case of the assessee." 11. We have heard the rival contentions, perused the material placed on record and judicial precedent cited by both the parties to drive home to the contentions raised. In this appeal effectively assessee has raised two grounds of appeal. Ground no. 1 relates to the addition of Rs. 1,71,28,000/- being the....
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.... revealed certain material discrepancies, abnormal variations, illogical & 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 the contention of the assessee by observing that the assessee has commenced the business in Financial Year 2014 but till 08.11.2016 there were no sales if there it was very negligible amount. While filling the ITR for earlier year the assessee has shown the nature of business as legal profession and not the legal profession. To verify the contentions of the assessee about the receipt of the advance for supply of Gold Ornaments notices were issued u/s. 133(6) of the Act to 58 cases of which the ld. AO received the reply of 20 parties. Out of 58 notices so issued 18 received back and thus 40 notices issued were served upon the details given by the assessee. Thus, ld. AO taken a view that the assessee failed to prove the identity of the parties from whom the monies were received and therefore, he has not considered the genuineness and creditworthiness. There was not....
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....rchasers were given. Only two purchasers denied the purchases having been made from the assessee directly to the ld. AO. No opportunity of cross examination given of such persons to the assessee. Assessee was not well known to be able to make sale of such huge amount. [NFAC Order, Page 25] On the eve of demonetisation many jewellers all across the country could register huge sales. Assessee also being one of them could make sales to different persons. Now the assessee is before us on the facts as narrated herein above. The bench noted that out of the 93 parties ld. AO choose the 58 parties and served the notices. Out of the notices so issued 69 % notices were duly served upon the address and the details submitted by the assessee. Therefore, the contentions of the revenue that the assessee fails in proving the identity of the parties has no merits because out of the selection the assessee details were correct to the extent of 69 %. Even out of the notices so issued confirmation were filed and the parities have expressed their willingness to confirm the said facts in persons and ld. AO did not went to verify the reals facts by issuing the summons. He merely relied upon the the rep....
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.... on the records so produced by the assessee. Merely the assessee has taken the advances for purchase of gold by those parties and that too on the eve of demonetization, cannot be doubted when the assessee has provided all the details related to the advances so received and the same were verified on majority cases. Thus, source for the sales is already considered and assessed as such as income and the profit from that has already been considered and not objected by placing any contrary evidence. The assessee shifted the burden casted upon him to the revenue to establish that the amount that the assessee has received is the unaccounted income of the assessee. Nothing contrary to the records were proved in even though all the details were placed on record by the assessee regarding the receipt of the advances, sales, and purchases from the said source of money. The assessment has been completed in the case of the assessee u/s. 143(3) of the Act without rejecting the book results. Therefore, once the sales is accepted the source of making that sales again cannot be added as unexplained receipt in the hands of the assessee as per provision of section 68 of the Act. We get strengthen of o....