TaxTMI 
TaxTMI 
2025 (7) TMI 184
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....h deposits of Rs. 2,25,04,409/- made out of normal course of business and levying tax u/s 115BBE of the Act." 3. The only ground raised by the assessee relates to challenging the order of the Ld. CIT(A) in upholding the additions made u/s 68 of the Act as unexplained income with regard to cash deposits. In this regard, we have heard the counsels for both the parties and perused the material placed on record, judgments cited before us and also the orders passed by the revenue authorities. 4. From the records, we notice that the additions were made in the present case on account of the fact that there was an abnormal increase in cash deposits during the demonetization period as compared to the pre-demonetization period. 5. In this regard, Ld. AR submitted that the assessee is an HUF and is engaged in the business activity of trading in gold and silver jewellery, and the cash deposit is out of cash sales and during the FY 2014-15 and 2015-16, they had not deposited any cash in the bank account, but submitted all the required documents to prove the source of the cash deposited during the year under consideration. 6. However, as per the revenue, the assessee had not submitte....
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....d for taxation and accepted by the AO, the AO cannot make the addition of the same amount again under section 68 of the Act, as it amounts to double addition of the same income. 9. We place reliance upon the following decision of the Hon'ble Supreme Court: i. Sreelekha Banerjee vs. CIT (1963) 49 ITR 112 (SC): The Department cannot by merely rejecting unreasonably a good explanation, convert good proof into no proof. ii. Lalchand Bhagat Ambica Ram vs. CIT (1959) 37 ITR 288 (SC): the Tribunal in arriving at the conclusion it did in the present case indulged in suspicions, coniectures and surmises and acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, or the finding was, in other words, perverse and this court is entitled to interfere. iii. Mehta Parikh and Company vs. CIT (1956) 30 ITR 181 (SC): the decision of the Tribunal must rest not on suspicion but on legal testimony. iv. Dhakeshwari Cotton Mills vs. CIT (1954) 26 ITR 775 (SC): the Income-tax Officer is not fettered by ....
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....ed to in clause (23FB) of section 10". As per plain reading following condition must be fulfilled for applicability of Section 68." 11. Thus, it is clear that the following conditions must be fulfilled for the applicability of section 68: I] Any sum found credited in the books of accounts maintained by the assessee. II] Assessee offers no explanation about such credit. III] Explanation of the assessee is not found satisfactory by the Assessing Officer." 12. But after analysing the facts of the case in totality, we find that the addition u/s 68 of the Act is not possible in the case of the assessee due to the following facts: 1. Stock existed on the date of sale, and it has not been proved that any backdating occurred. It is not the case of the revenue that back dating the entries in its accounting software it has increased the sale factiously. 2. The assessee has maintained the complete stock tally in its accounting software. Such books of accounts are audited, quantitative records produced before the tax auditor, such quantitative records are certified by the tax audit, and no questions have been raised by the assessing o....
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....ceipt is accounted for as income, no separate addition of the same amount as income of the assessee under any other Section of the Act can be made as it would be a double addition. In the result, we delete the addition made and allow its claim of the assessee." C] ACIT v. Dewas Soya Limitd (Indore ITAT) ITA No. 336/Ind/2012 "Even otherwise, the goods were supplied to the parties after receiving the advance payments which were credited through cheques/DDs/RTGs, etc. Therefore, we hold that the CIT(A) has rightly come to the conclusion that the addition made by the Assessing Officer u/s 68 of the Act by considering the sale proceeds as cash credits cannot be sustained." D] CIT v. Vishal Exports Overseas Limited (Gujarat High Court) Tax Appeal No. 2471 of 2009 "5. Revenue carried the matter in appeal before the Tribunal. The Tribunal did not address the question of correctness of the C.L.T. (Appeals)'s conclusion that amount of Rs. 70 lakhs represented the genuine export sale of the assessee. The Tribunal however, upheld the deletion of Rs. 70 lakhs under section 68 of the Act observing that when the assessee had already offered sales realisation and such i....
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....sessee jewelers in its bank account post demonetization, since assessee had explained source of said cash deposits as sale of jewellery, provided sale bills and admitted same as revenue receipt as well as offered it for tax and had also represented outgo of stocks which was matching with sale, impugned addition was to be deleted." H] Nikantha Saha v/s ITO [ITA No. 881/Gay/2020] 14. We conclude that in the above factual scenario, no additions were warranted as sales are already recorded in the books of accounts and the addition of the same amounts to double addition. A receipt cannot be treated sale proceeds and unexplained cash credit simultaneously. A prejudice view on sale cannot be drawn when purchases are accepted without any reservation. Section 68 connotes amount credit in books of accounts remained unexplained needs time added. Recorded sale are not unexplained cash credits. The books of accounts of the Appellant had not rejected by the Assessing Officer while passing the Assessment Order. 15. It is important to mention and highlight here that during the year under consideration, the assessee had made total sales of Rs. 473,25,36,214/- of gold bars/coins (Rs. 473 cr....
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....ms 08.11.2016 Shri Laxmi Kedar 300 gms 08.11.2016 Shree Sambhav Bullion 100 gms 08.11.2016 Vyomee Enterprises 1000 gms 08.11.2016 Royal Refinery Pvt Ltd 1000 gms 08.11.2016 Arihant Traders 1000 gms 08.11.2016 Rajendrakumar S Bubne 400 gms 08.11.2016 Labdhi Bulllion 1000 gms 08.11.2016 Sales made to different individuals of approximately 50g cach 5600 gms 08.11.2016 Closing stock as on 08.11.16 2050 grams 16. Moreover, the AO had accepted the assessee's entire sale and purchase offered in the books of account as genuine. Therefore, the addition made by the AO on account of cash deposited during the demonetisation period on the pretext that the assessee had created an artificial scenario in its books of account where unaccounted income was shown by them as cash sales and then deposited into bank accounts. In this regard, there....