TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 1194
X X X X Extracts X X X X
X X X X Extracts X X X X
....e condone delay in filing of appeal and admit appeal filed by the assessee for adjudication. 3. The assessee has raised the following grounds of appeal: A. The order of the National Faceless Appeal Centre (NFAC)/ Commissioner of Income Tax (Appeals) /CIT(A) had erred both in law and on facts by confirming the order of the Assessing Officer. The said Order is just an endorsement of the Learned Assessing officer's order without applying the judicial powers of Appellate Authority in respect of the issues involved. B. Both the LAO and The NFAC / CIT (A) erred in law in treating the SBNs were no longer valid legal tender during the period of 9° November to 31° December, 2016, the period of demonetisation. C. The LAO, after having sought for the details of sales, collections and cash deposits as required under the CBDT Instructions relating to the Assessment relating to demonetisation cases, failed to take cognizance of the data, its meaning and failed to appreciate that the statistics do not portray extraordinary activities leading to any suspicion and that they confirm the Assessee's bonafide nature. The NFAC/ CIT (A) ought to have pointed out the lapses in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he cash deposit into the bank accounts by third parties. 6.3 The Assessing Officer has not contested the genuineness of the business transaction carried out by the assessee. The verification has been made purely based on audited books of account and the actual cash deposit made in the bank accounts. Since there was difference in the cash balance as on 09.11.2016 and the cash deposit made in the bank account, it was proposed to bring to tax the unaccounted money . 7. Since the assessee has not satisfactorily explained the deposit of money amounting to Rs. 32,26,000/- into the bank account, the same is brought to tax u/s 69A of the IT Act as unexplained money and charged to tax u/s 115BBE of the IT Act 1961. Penalty proceedings u/s 271AAC is initiated separately, since the addition is covered by the provisions of section 115BBE of the IT Act." Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Ld.CIT(A)-NFAC. 5. Before the appellate authorities the assessee stated that the order of the Assessing Officer is erroneous and against the natural justice to the facts and circumstances of the case. The assessee stated that 5. The expr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cash deposits are recorded in the books of accounts and received from the customers of the assessee and all transactions are in the normal course of business. Further, the PAN and address of the customers along with ledger account copies of the parties as per the books of accounts of the assessee have also been filed before the Assessing Officer. In these circumstances, it is evident that the Assessing Officer has note down a case calling for an addition u/s. 69 of the Act. However, the Ld.CIT (A) was not convinced with the submissions of the assessee and confirmed the additions made by the Assessing Officer by holding as under: "6. I have perused facts of the case, assessment order of the Assessing Officer, submission of the appellant and the documents available on record. On perusal of the record, it is seen that the addition made is in respect of cash deposits amounting to Rs. 32,26,000/- u/s 69A of the IT Act. On perusal of the submissions and the documents filed during appellate proceedings, it is observed that the concern Sai Pooja Agro Farms is engaged in broiler integration. Commercial farming activity is carried on contract basis in which broiler chicks are prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der sub-section (2) of section 26 of the Reserve Bank of India Act, 1934, shall cease to be liabilities of the Reserve Bank under section 34 and shall cease to have the guarantee of the Central Government under sub-section (1) of section 26 of the said Act." 7.1 The Ld.AR stated that the specified bank notes pursuant to 08.11.2016 up to 30.12.2016 was always allowed and it was never the intention of the Legislature to prohibit their use for transactions up to 31.12.2016. In support of the above, the assessee relied on the decision of ITO vs Tatiparti Satyanarayana of ITAT Visakhapatnam, wherein the Tribunal held as under: 9. We have heard both the parties and perused all the documents on record. We find that there was sufficient cash balance with the assessee as detailed in page No. 30 of the paper book. The Specified Bank Notes (Cessation of Liabilities) Act, 2017, defines "appointed day" vide Section 2(1)(a). As per Section 2(1)(a), "appointed day" means the 31 Day of December 2016. Section 5 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017 also deals with prohibition on holding, transferring or receiving specified bank notes. Section 5 states that "On an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng vs ACIT v) Raju Dinesh Kumar vs DCIT vi) RM Sales Corporation vs ITO vii) Vasanth Co Tirupur vs ITO viii) Muthalif Moideen vs DCIT 8. Per contra, the ld.DR relied on the orders of the lower authorities. 9. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The fact with regard to the impugned dispute are that the assessee has deposited a sum of Rs. 35,52,000/- in specified bank notes during demonetization period to his bank account beyond the cash balance held on 08/11/2016. It is admitted from the records that the assessee is engaged in the business of poultry. The case was selected for scrutiny to verify the source for cash deposited and called for certain details. The assessee deposited cash of Rs. 35,52,000/- after announcement of demonetization by Government of India. Out of which the assessee shown cash balance on 09/11/2016 of Rs. 3,26,337/- and hence explained the source for cash deposits of Rs. 32,26,000/-. The Assessing Officer confirmed the addition of Rs. 32,26,000/- u/s. 68 of the Act. In response to notice u/s. 142(1) of the Act, the assessee had furnished cash b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... State Marketing vs ACIT v) Raju Dinesh Kumar vs DCIT vi) RM Sales Corporation vs ITO vii) Vasanth Co Tirupur vs ITO viii) Muthalif Moideen vs DCIT 12. We further noted that the Central Board of Direct Taxes had issued a circular for the guidance of the Revenue Officer to verify cash deposits during demonetization period in various categories of explanation offered by the assessee and as per the circular of the CBDT, examination of business cases, very important points needs to be considered is analysis of bank accounts, analysis of cash receipts and analysis of stock registers. From the circular issued by the CBDT, it is very clear that, in a case where cash deposit found in business cases, the AO needs to verify the explanation offered by the assessee with regard to realization of debtors where said debtors were outstanding in the previous year or credited during the year etc. Therefore, from the circular issued by the CBDT, it is very clear that, while making additions towards cash deposits in demonetized currency, the AO needs to analyze the business model of the assessee, its books of account and analysis of sales etc. In this case, if we go by analysis furnished by t....