TaxTMI 
TaxTMI 
2025 (6) TMI 156
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....utside India, in support of the claim that he was out of India during the period when the order was served upon him. He further stated that as soon he returned to India and came to know about the order of ld. CIT (A), immediately he filed the appeal and therefore, prayed for the condonation of delay in filing the appeal. 3. After considering the application filed by the assessee and the reason stated therein, we find that the assessee has sufficient cause for delay in filing the appeal and therefore, the delay is condoned and appeal is admitted for adjudication. 4. Brief facts of the case are that the assessee is an individual and e-filed his return of income on 24.08.2017 declaring total income at Rs. 3,18,960/-. The said return was revised on 29.12.2017 wherein the total income was revised at Rs. 3,18,750/-. The AO had information that the assessee has deposited cash of INR 10,45,500/- in Specified Bank Notes (SBN) in the bank account No.2010004597420 maintained with INDUSIND Bank during the demonetization period and therefore, the case was reopened and notice u/s. 148 of the Act was issued however, the assessee did not file return of income. Thereafter, various notices u/s....
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....M/s Ambey Bhawani Associate Co. The said firm is registered with VAT authorities and having TIN. The assessee has filed his return of income u/s 44AD on presumptive basis where the total income was declared at Rs. 4,14,024/- on total turnover of Rs. 49,03,470/- comprising of cash sales of Rs. 30,25,930/- and through banking system at Rs. 18,77,540/-. Ld. AR submitted that out of the cash sales, assessee has deposited SBN during the demonetization period. He further submitted that while dismissing the appeal of the assessee, ld. CIT(A) has observed that total cash sales declared by the assessee in the return was of Rs. 12,05,300/- which is incorrect fact. As stated above, assessee had made cash sales of Rs 30,25,930/- which is evident from the copy of the ITR filed, available in the paper book, wherein at page 4 of the paper book, under the title "Details of income from business or profession" the figure of cash sales at Rs. 30,25,930/- is stated. Ld. AR further submitted that the AO has not doubted the sales declared thus, the cash deposit out of such cash sales could not be held as unexplained investment. Ld. AR argued that when sales have already been offered for tax, the cash ge....
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....tions of whole of amount deposited in the bank during demonetization. Supreme Court in case of Lakhmichand Baijnath Vs CIT clearly held " When an amount is credited in business books it is not an unreasonable inference to draw that it is a receipt from business. The view was upheld by ITAT Cochin Bench in case of Balakrishna Reddar and Sons VITO for cash entries appearing in the bank statement of the appellant. 9. In view of the above submission, it is prayed by ld. AR that the addition made on account of cash deposit in SBN deserves to be deleted. 10. Per contra, ld. Sr. DR vehemently supported the order of lower authorities and stated that assessee has made cash deposit during demonetization in SBN with Indusind bank and claimed the said was made out of cash sales without any evidence to support the claim. It is submitted by ld. Sr. DR that the AO has made threadbare analysis of the cash deposited into bank and sales made by the assessee during the year under appeal. He further submitted that the assessee has not filed any details before the AO or before ld. CIT(A) with regard to the purchases etc. thus, the cash sales is not established by the assessee. He thus prayed for ....
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....rsection 68 on account of cash deposits could not be made simply on reason that during demonetization period, cash deposits vis-a-vis cash sales ratio was higher - Whether once, it had been established that sales representing outflow of stocks was duly accounted in books of account and there was no abnormal profit during year, then there was no justification to treat deposits made in bank account out of cash sales to be income from undisclosed sources - Held, yes Whether, therefore addition made under section 68 was to be deleted -Held, yes [Para 14] [In favour of assessee]" 13. The Hon'ble Delhi High court in the case of CIT v. Kailash Jewellery House in ITA No. 613/2010 (Delhi High Court) has held as under: In the facts of above case cash of Rs. 24,58,400/- was deposited in bank account. The Assessing Officer made the addition on the ground that nexus of such deposit was not establish with any source of income. The assessee claimed that it was duly recorded in the books on account of cash sales and was considered in the Profit and Loss Account. The Assessing Officer had verified the stock and cash position as per books and had accepted the same. Complete book....
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....t rejected the book results and brought to tax the total sales declared by the assessee in its books. Since the cash were already recorded and explanation is already part of the book results, there is no avenue for the CIT(A) to reject such explanations. This expression "explanation is found not satisfactory to the AO" is purely relates to the money found with the assessee which are not recorded in the books of account. In this case, the above expression has no relevance since the assessee had already declared the cash sales in its books. In the similar situation, the coordinate bench has held in the case of J.R.Rice India (P) Ltd as under: "At the cost of repetition, to the extent of sales made, the stock position is also correspondingly reduced by the assessee which goes to prove the genuineness of the claim of the assessee. On examination of the cash book of the assessee, it is found that the assessee had cash balance of Rs. 55.94 lakhs as on 8-11-2016, i.e., the date on which demonetization was announced, which sufficiently explains the source of deposit of Rs. 52.60 lakhs in specified bank notes. Apart from this, the assessee had duly furnished the month wise details ....
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.... has to be computed by the Assessing Officer on the basis of available material on record and it is very important to have a direct evidence to make an addition rather than circumstantial evidence. When the assessee gives any reply or submission or any documents to the Assessing Officer, it is duty of the Assessing Officer to examine the same in the light of the available evidence. In the present case the Assessing Officer and the ld CIT(A) have concluded the findings on the basis of conjectures and surmises. The Assessing Officer has to establish the link between the evidence collected by him and the addition to be made. The entire case has to be dependent on the Rule of evidence, the assessee in this case explained the source of bank deposits are from cash sales. The Assessing Officer proceeded to disbelieve the explanation of the assessee on the presumption basis without bringing the corroborative material on record. The Assessing Officer is required to act fairly as reasonable person and not arbitrarily capriciously. The assessment should have been made based on the adequate material and it should stand on its own leg. The Assessing Officer without examining any parties to whom....