TaxTMI 
TaxTMI 
2025 (6) TMI 1108
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....necessary approval of the competent authority. The Assessing Officer has called for the KYC copy of bank account of State Bank of India from the bank and notice u/s 142(1) and 143(2) were issued to the assessee from time to time. As the assessee was not making proper compliance to the notice, ld. AO issued a summons u/s 131 of the Act to the assessee and thereby his statement was recorded wherein he was asked to explain the source of cash deposit as well as other activities carried out for the year under consideration. The assessee explained that at present he is proprietor of M/s SS Diam and is also director in M/s SS Diam (P) Ltd. in which jewellery business done. As regards the source of cash deposit in saving bank account with SBI, Kanwar Nagar, Jaipur, he stated that he was doing the work of purchase and sale of old ornaments on which only brokerage was earned. The cash deposited was out of sale amount of the ornaments and after this deposit, cheques were issued to the seller parties. Relevant portion of the questions and answers on this issue during his statements recorded is reproduced herein below:- प्रश्न 7 :- कृप....
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....9;झे ग्राहक मिलते थे जिनके हेतु मुझे दलाली प्राप्त होती थी। प्रश्न-8 कृपया इस दलाली एवं बैंक में जमा नगदी के बारे में विस्तृत से बतायें। उत्तर :- महोदय, मेरे पास पुराना सोना बेचने जो लोग आते थे उनको में उनके सोना....
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....;य कोई दस्तावेज वर्तमान में मेरे पास उपलब्ध नहीं है। Based on the above statement, ld. AO noted that the assessee has not substantiated what has been stated in the statement with corroborative evidence. Therefore, that contentions of the assessee were not considered and accepted by ld. AO and ld. AO noted that it is concocted story. Accordingly, ld. AO added the cash deposit of Rs. 32,50,000/- in the hands of the assessee in addition to the returned income of Rs. 11,69,690/- filed by the assessee. 3. Aggrieved from that 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: "Ground No. 1: That the learned Assessing Officer has erred in law in making addition of whole of the cash deposit of Rs. 32,50,000/- without taking into consideration that the assessee has made sale of old gold ornaments on behalf of cu....
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....pellant has not produced any evidences regarding the receipt of old gold from the sellers, stock register of all gold, copies of or the counter foils of acknowledgements issued by the appellant on receipt of the old gold from the sellers. There are no details of the names and addresses etc, of the sellers of the gold. This argument of the appellant is also contrary to the prevailing fact that in the business of purchase and sale of old ornaments, the seller & buyer always transact in cash as there is no reason for the seller of the old gold to wait for next day or any other further day before getting the proceeds of the sales of the old gold. Old gold is readily saleable and there is no need of waiting. Further old gold articles are generally sold only in the case of urgencies or emergencies and the seller would not like to wait in getting the proceeds of the sale from appellant whereas the seller can sell the gold to other parties and get the proceeds immediately. Further I also agree with the opinion of the learned assessing officer that the transactions of all gold are generally done in cash to hide their identity and also to avoid any taxation litigation whereas in the case....
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.... the assessee has already declared commission income of Rs. 74,510/-. 2. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing." 5. As is evident that the assessee has raised single ground challenging the confirmation of addition for an amount of Rs. 32,50,000/-. In support of that solitary ground raised by the assessee, ld. AR of the assessee filed written submission which is reproduced herein below: "The assessee is an individual. In response to notice u/s 148 dated 27.03.2017 the assessee was filed return on 17.11.2017 declaring total income at Rs. 10,97,620/- as filed originally on 12.08.2010 u/s 139(1). The Learned Assessing Officer completed the assessment u/s 143(3) rws 147 of the IT Act on 11.12.2017 determining total income at Rs. 44,19,90/- by making the addition of Rs. 32,50,000/- on account of cash deposited in the bank account which is related the sale of the assessee on which the assessee has already declared commission income of Rs. 74,510/-. Aggrieved with the order of the learned Assessing Officer the assesee preferred appeal before the Learned CIT(A). The Learned CIT(A) has passed the ex-part....
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....1 of the Income Tax Act, 1961. In para 5 of the assessment order the Learned AO has reproduced the statement which are as under: - 5. In this case, since the assessee was not making compliance of the notices issued u/s 142(1) even on his new address, summons u/s 131 of the Act was issued to him and he appeared on 6.11.2017. His statement was recorded wherein he was asked to explain the source of cash deposits as well as other activities. He explained that at present he is proprietor of M/s SS Diam and is also director in M/s SS Diam (P)Ltd in which jewellery business are being done. Regarding source of cash deposit in saving bank account with SBI, Kanwar Nagar, Jaipur, he stated that he was doing the work of purchase and sale of old ornaments on which only brokerage was earned. The cash deposited was out of sale amount of the ornaments and after this deposit, cheques were issued to the seller parties. Relevant portion of the questions and answers on this issue during his statements are reproduced below: प्रश्न 7 :- कृपया बतायें कि आपके द....
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....#2375; जिनके हेतु मुझे दलाली प्राप्त होती थी। प्रश्न-8 कृपया इस दलाली एवं बैंक में जमा नगदी के बारे में विस्तृत से बतायें। उत्तर :- महोदय, मेरे पास पुराना सोना बेचने जो लोग आते थे उनको में उनके सोना लेकर चैक दे देता थ&....
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....#2340;मान में मेरे पास उपलब्ध नहीं है। Since, all the transactions are not recorded in the books of accounts the assessment was completed after a gap of 17 years the assessee could not substantiate and produce the evidences for verification of the Learned AO. Therefore, the Learned AO has made addition of total credits of Rs. 32,50,000/- in his bank account. The copy of income tax return filed by the assessee in original is placed on paper book page no. 1 to 4. Copy of revised return filed in response to notice u/s 148 is placed on paper book page no. 5 to 7. Copy of bank statement is placed on paper book page no. 8. From the perusal of the bank account that in all the cases money was deposited by cheque and the amount was also withdrawn by issuing cheques. The difference between debit and credit i.e. Rs. 74,510/- was offered as commission income. The Learned AO did not bring any adverse material on record that the money deposited was assessee's own money and money debited was any expenditure of assessee or any investmen....
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....rticulars Page No. 1. Copy of income tax return filed u/s 139(1) 1-4 2. Copy of income tax return filed u/s 148 5-7 3. Copy of bank statement 8 7. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee has already filed details as per statement so recorded stating that he has offered the commission income while filing the return of income. In response to the notice u/s 148 of the Act on 17.11.2017. Since the issue raised being very old he could not submit the details of purchase and sales. Since the relevant income arising out of that transaction is already offered as commission income of those alleged transactions, the action of the lower authority taxing the full amount is not correct and is required to be deleted. While adding the sum of cash deposited by the assessee ld. AO has not referred under which section he has added that amount as income of the assessee and even on that count the addition is required to be deleted. In support of that contention he relied on the decisions cited in the written submission. Ld. AR also stated that ld. AO while making the addition ignored the fact that income to the exten....
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....nwar Nagar, Jaipur, he stated that he was doing the work of purchase and sale of old ornaments on which only brokerage was earned. The cash deposited was out of sale amount of the ornaments and after this deposit, cheques were issued to the seller parties. Based on that statement, ld. AO noted that the assessee has not substantiated what has been stated in the statement with corroborative evidence. Therefore, that contention of the assessee was not considered as afterthought. Thus, finally ld. AO made the addition for Rs. 32,50,000/- being the amount of cash deposit as income in addition to the returned income of Rs. 11,69,690/- filed by the assessee. When the matter was carried to the first appellate authority i.e. ld. CIT(A) he confirmed the addition stating that the assessee has not furnished any information / evidence to rebut the finding of the ld. AO and thereby he confirmed the finding as recorded in the order of the assessment. While doing so he noted that "the old gold was sold on behalf of the villagers and on the other hand the appellant has claimed that the payment to the sellers was made in cheque whereas generally the villagers do not take cheque payment for such tr....