TaxTMI 
TaxTMI 
2025 (7) TMI 47
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....on 143(3) of the Act for AY 2017-18 after making various additions in the complete scrutiny assessment conducted in the case of the assessee. The AO noted that there were substantial cash deposits made by the appellant during the demonetization period and cash deposits in SBN during demonetization amounted to Rs 1.22 crore besides other cash deposits of Rs 69.80 lakhs during the relevant period. The case was heard on different dates and various queries were raised to the appellant by the AO. The AO has pointed out in the assessment order that no cash sales have been made in the earlier FY 2016-17, whereas in the instant year the appellant has claimed that the cash deposits of Rs 1.22 crore in 38 days (during demonetization) as compared to c....
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....e the AO. The A noted that the appellant is into the business of manufacturing of MS INGUTS from iron scrap, but it has failed to produce or furnish even the stock register. No cash book, purchase ledger, sale register, stock register was furnished before the AO and therefore the inventory of different items furnished was unsubstantiated. The VAT return was also not found sufficient by the AO and the opening cash amounts were also not established. Therefore, the AO made an addition of Rs 1,91,80,000/- under section 68 read with section 115BBE of the Act in the assessment order. In appeal Ld. CIT(A) noted that the documents submitted by the appellant are prima facie not sufficient to discharge onus of the appellant that the entire cash depos....
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....ook. However, the Assessing Officer was of the view that: (a) The assessee has not placed on record any stock register; (b) has not placed records any cash book/sales ledger; (c) That the assessee has furnished the list of 63 entities to whom the cash sales has been made. However, the same is no properly verifiable. Primarily on these grounds the A.O has made the addition of Rs. 1,22,00,000/-. While doing so, the AO clearly ignored the replies filed by the assessee, containing various details. At this juncture, in regard to non-filing of the reply and placing the evidence on record, it was submitted that the fact of matter is that in response to show cause notice dated 14.12.2019 the A.R. tried to file the required reply along with required....
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....turns for the relevant quarter, assessment order passed under VAT and copy of the appellate order under the VAT proceeding (kindly refer page no. 244-291 of the paper book), (d) stock register in regard iron mix metal, iron scrap and slag kindly refer page no. 312-328 of the paper book)and (e) sales register in regard iron mix metal, iron scrap and slag kindly refer page no. 329-336 of the paper book). In regard to these documents the CIT(A) duly called a remand report from the Assessing Officer. The same was submitted by the Assessing Officer. The Ld. CIT (A), however have merely confirmed the addition made by the AO, without pointing out any discrepancy in the books of account of the appellant, without considering that the amount has alre....
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...., the books of accounts are not rejected. In other words, the addition can be made, only when the books of account of the assessee are rejected. We note that ITAT Vishakhapatnam Bench on identical issue in the case of ACIT v/s. Hirapanna Jewellers [2021] 128 taxmann.com 29/86 GST 300/50 GSTL 120 (Karnataka) held that the assessee was maintaining complete stock tally, the sales were recorded in the regular books of accounts and the amount was deposited in the bank account out of the sale proceeds, therefore, the addition made by the AO and sustained by the Ld. CIT(A) was no justified. It is noted that the relevant documents to substantiate the cash sales has been provided by the assessee and no discrepancy or defects has been pointed out in ....