TaxTMI 
TaxTMI 
2025 (4) TMI 1213
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....ter referred to as the "Act"), and Deputy Commissioner of Income-Tax, Central Circle-7(1), Mumbai, dated 29.03.2022, u/s. 144 read with Section 147 of Act, respectively, for Assessment Year 2017-18. 2. Grounds taken by the assessee in ITA No. 2813/MUM/2024 are reproduced as under: 1. Under the facts and in law, the learned CIT(A) erred in confirming the addition made by the Assessing officer (herein after referred to as "learned A.O.") of Rs. 52,45,78,500/-, being the cash deposit made out of sale proceeds of bullion, gold and silver ornaments, and other precious metals in the bank account, under section 69A of the Income Tax Act, 1961 (the Act) as unexplained money. 1.1 Under the facts and in circumstances, the learned CIT(A) failed to appreciate the fact that the cash deposited in bank account was part of appellant's turnover for the year i.e. Rs. 243.37 crores which has been duly offered to tax in the return of income filed. 1.2 Under the facts and in law, the learned CIT(A) erred in concluding that the appellant was not carrying out any business as well as alleging the parties from whom purchases have been made are bogus since there was survey ....
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.... 115BBE of the Income Tax Act, 1961. 7. All the aforesaid grounds are without prejudice to each other, independent and in the alternative. 2.1. Grounds taken by the assessee in ITA No. 2814/MUM/2024 are reproduced as under: "1. Under the facts and in law, the learned Commissioner of Income Tax (Appeal) - 49 (hereinafter referred to as "CIT(A)") erred in confirming the reopening of assessment under section 147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 1.1 Under the facts and in law, the learned CIT(A) erred in confirming the reopening based on the reasons recorded by the learned A.O. which are vague and does not indicate any escapement of income. The reasons recorded are nothing but change of opinion, on the basis of facts which were already on record. 1.2 Under the facts and in law, the learned CIT(A) failed to appreciate the fact that the cash deposit has been specifically scrutinized during the assessment proceedings completed under section 143(3) of the Act and hence there was no new material alluding to reopening of appellant's case. 1.3 Under the facts and in law, the learned CIT(A) failed to appreci....
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....he addition is made merely on the basis of presumption, surmises and conjecture of the learned A.O. 5. Under the facts and in law, the order passed by learned CIT(A) is against the principle of natural justice and equity. 6. All the aforesaid grounds are without prejudice to each other, independent and in the alternative. 2.2. Grounds taken by Revenue in its cross appeal in ITA No. 3059/MUM/2024 are reproduced as under: "1. On the facts and in the circumstances CIT(A) erred in allowing of the case and in law, the Ld. that assessee could the appeal of the assessee despite the fact not prove the nature and source of credits in his Bank Account. 2. On the facts and in the circumstances CIT(A) erred in of the case and in law, the Ld. appreciating allowing the appeal of the assessee without source of purchases the fact that assessee could not prove the nature and of Rs. 171,26,13,205/-. 3. On the facts and in the circumstances CIT(A) failed to appreciate of the case and in law, the Ld. that credit of Rs. 57,58,527/- over and 4. received above the from addition made on account of the same and information the investigation unit of the same, ....
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....rding to the ld. Assessing Officer was insufficient to prove the genuineness of the transaction, since verification could not be done. In this respect, ld. Assessing Officer also, after perusing the bank statement, noted that assessee did not make payments in respect of purchases made from the following parties, during the year i) Jorss Bullion Pvt. Ltd. ii) Rialto Exim Pvt. Ltd. iii) Rushabh Jewellers iv) Trikesh Tradelink Pvt. Ltd. v) Regalia Gold Pvt. Ltd. vi) Rajmal Lakhichand (Jalgaon) vii) Rajmal Lakhirchand Jewellers 4.1. Ld. Assessing Officer thoroughly analysed the transaction with the parties from whom purchases were made and noted that against the purchases debited in the profit and loss account, sundry creditors reported in the balance sheet are at Rs. 63,50,55,508/-. From this factual position, ld. Assessing Officer observed that out of total purchases of Rs. 169,23,05,543/-, sundry creditors reported at Rs. 63,50,55,508/- shows that the difference of Rs. 105,72,50,035/- ought to have been paid during the year and should reflect in the bank statement of the assessee. However, on verification of bank stat....
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....mes In the month of July 2016 NIL as no cash sales In the month of August 201 6 NIL as no cash sales In the month of Sept. 2016 Once only as no cash sales 5.4. From the above tabulated details and its analysis, ld. Assessing Officer observed that assessee has shown all the cash sales during the year under consideration, between the period from 01.04.2016 to 08.11.2016. No cash sales are reported during the demonetisation period as well as post demonetisation period. Entire cash sales are made within a short span of 25 days creating a serious doubt on the conduct of business by the assessee, more particularly, when meagre expenses are debited in the profit and loss account for running the business activity of such high volume. In this respect, it is noted that total salary expense debited amounts to Rs. 1,45,000/- only which shows that not many persons are working with the assessee. Ld. Assessing Officer posed a serious doubt on carrying out of such huge cash sales of more than Rs. 50 crores of jewellery ornaments within a span of 25 days without a team to handle such voluminous transaction as it would require sufficient number of persons for weighing, generatin....
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....1.08.2017 for which the leave and licence agreement was placed on record. 7.1. From the analysis of bank account statement, ld. Assessing Officer also observed that deposit of cash in the bank account during the demonetisation period from 09.11.2016 to 30.12.2016 was Rs. 52,45,00,500/- whereas it was only Rs. 3,000/- during the same period in the immediately preceding year. Based on all these analysis and observations from the submissions made by the assessee, ld. Assessing Officer concluded that assessee failed to substantiate cash deposit made in his bank accounts with documentary evidences. According to the ld. Assessing Officer, assessee could not substantiate exceptionally high cash sale during the year as well as could not establish the genuineness of the purchases recorded in the book of accounts which only reflects inflated stock to create cash balance in the books as on 08.11.2016 by recording fictitious cash sales and making fictitious sales bills. Based on these observations and findings, he held that books of accounts of the assessee are not reliable and are cooked up to channelise unaccounted cash. He thus, rejected the books of accounts u/s. 145 of the Act and held....
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.....r.t. to the opening stock for A.Y. 2017-18 were shown from the dubious parties iii. No payments were made against these purchases and only entries of sales made against these purchases. iv. Thus, the stock shown for cash sales is fabricated. v. Cash sales are mainly on account of 22 ct gold ornaments, whereas the main business of the appellant is bullion trading. vi. It is beyond any human probabilities to carry out the huge alleged cash sales." 10.1. Based on the above, he concluded that cash sales are found to be fictious and bogus and the source of deposit of cash in the bank accounts remained unexplained, thereby dismissing the ground raised by the assessee. On the issue relating to disallowance of claim of bad debts written off, assessee claimed that the debtor, Abhishek Enterprises, to whom sales were made in the Financial Year 2014-15 relevant to Assessment Year 2015-16 was untraceable and therefore the amount became irrecoverable which was already offered in the sales turnover for the said Assessment Year. In this respect, copy of ledger account of the said party was furnished from which ld. CIT(A) noted that total sales are in the mo....
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.... keeping in juxtaposition, the logistic and operational activities relating to transactions undertaken by the assessee within a short span of 25 days immediately preceding the announcement of demonetisation to justify the deposit of cash in various bank accounts of the assessee in the period of demonetisation. The thoughtful analysis done at both the levels of ld. Assessing Officer and ld. CIT(A), based on corroborative documentary evidences and financial data furnished by the assessee from its own books of accounts, evidently demonstrates the façade created by the assessee and has been pierced to bring out the true intent and purpose of explaining unaccounted money of the assessee. 11.2. Having perused orders of the authorities below, coupled with corroborative documentary evidences placed on record in the paper book, we do not find any reason to interfere with the conclusion drawn by the ld. CIT(A) in respect of deposit of cash in the various bank accounts of the assessee. Accordingly, the addition made u/s. 69A of Rs. 52,45,78,500/- is sustained. Grounds raised by the assessee in this respect are dismissed. 11.3. In respect of claim of bad debts written off during t....
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....carrying out bogus purchase and sales transaction enhancing the income by Rs. 4,22,69,707/-. We find that it is not a case of taking accommodation entry from the accommodation entry operators by the assessee. Furthermore, both ld. Assessing Officer and ld. CIT(A) have taken into consideration, the net profit estimation by rejecting the book of accounts of the assessee which has been upheld by us also, affirming the application of 0.1% of sales turnover as already stated above. Once the books have been rejected and net profit estimation have been applied, we do not find any justification for the enhancement made by ld. CIT(A) by presuming commission without any corroborative material on record. The enhancement so made by ld. CIT(A) is solely on presumption and assumption, more importantly when net profit estimation has already been sustained in the hands of the assessee. Accordingly, notional commission added in the hands of the assessee is deleted. Grounds taken by the assessee in this respect are allowed. 11.6. On the ground raised by the assessee on applicability of provisions of section 115BBE, it is to be noted that in the present case the alleged transaction of deposit of c....
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....tion 69C and also towards deposit of cash in the bank accounts. 13.1. From the perusal of assessment order, we note that all these issues were already considered in the original assessment made u/s. 143(3) for which we have adjudicated upon in ITA No.2813/Mum/2024 in the above paragraphs. In the original assessment made u/s. 143(3), books of accounts had been rejected after analysing both the sales and purchase transactions made by the assessee during the year under consideration and net profit estimation was done which has been up held by taking into consideration the finding of ld. CIT(A). In the impugned re-assessment order passed u/s. 147, addition is made towards purchase transaction which were already analysed and verified during the course of assessment, resulting into the aforesaid addition in the hands of the assessee. Taking up exercise of re-assessment for again making an addition by disallowing the purchases which have already been examined, amounts to change of opinion which is not permissible within the provisions contained in the section 147 of the Act. 13.2. Similar is the case, in respect of addition of Rs. 57,58,527/- made towards deposit of cash in the re-a....