TaxTMI 
TaxTMI 
2025 (7) TMI 305
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....ggrieved, assessee preferred the appeal before the Ld. CIT(A), who vide his impugned order has deleted the addition. Against the same, Revenue is in appeal before us. 4. Ld. DR relied upon the order of the AO. 5. Per contra, Ld. AR relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order, which do not require any interference and need to be upheld. In support of his contention he submitted that where cash deposited in bank by assessee during demonetization period was out of cash sales which was duly shown in books of account and Assessing Officer did not point out any specific defect in books of account maintained by assessee and no inflated purchases or suppressed sales were found, such cash deposit could not be treated as unexplained money of assessee was to be deleted. Reliance is placed on: Deepak Sharma v. ACIT, ITA No. 2886/Del/2022 Bharat Agro Industries v. DCIT, ITA No.3934/Del/2023 JB Nuts v. ITO, I.T.A No.104/Del/2022 M/s Shivam Industries v. ACIT, ITA No.1612/Del/2021 Raju Dinesh Kumar v. DCIT, [2024| 159 taxmann.com 1598 (Chennai - Trib.) Fine Gujaranwala Jewellers v. ....
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....le) on gross basis (without any deduction/ allowance). In fact, it is reiterated that the treatment of the cash deposits as unexplained money U/s 69A by the A.O has resulted in double taxation of the same amount, once in the form of cash sales already offered to tax by the appellant at the rate of tax applicable to firms and again by way unexplained money. Such recourse is unwarranted keeping in mind the objective to introduce section 115BBE of the Act was only to curb the practice of laundering of unaccounted money by taking advantage of the basic exemption limit. In light of the above, it is prayed that the order of the Ld. CIT(A) may kindly be upheld. 6. We have heard the rival contentions and gone through the facts of the case. We find Ld. CIT(A) has discussed the issue in dispute elaborately by observing as under:- "I have gone through the impugned assessment order passed by the AO, the submissions of the Appellant, the ratio of judicial pronouncement referred and relied upon as well as the provisions of Law. The facts adduced would reveal that the Appellant is an individual and during the captioned assessment year (as also in the earlier assessment years)....
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....ediately preceding previous year. While assailing the aforesaid comparison, the Appellant has contended that during the immediately preceding previous year (FY 2015-16), the Appellant was unwell. The relevant medical papers in this regard have been enclosed in the paper book and were also filed before the AO. IT has been contended that the ill-health of the appellant was one of the major reasons which prevailed in the A.Y. 2016-17 and hence the cash sales for that period were low and cannot be considered and compared for the A.Y. 2017-18. The AO has however completely failed to appreciate this. As per the evidence adduced the appellant is suffering from multiple sclerosis and had gotten himself examined at AlIMS, as well as other notable medical institutions within and outside India. Even though the period to which these prescriptions pertain to do not correspond to the FY 2015-16, yet considering that the disease is a disease which pertains to life style / living habits, the explanation adduced by the Appellant ought to have been considered and taken note of. In the instant case, the following facts emerge: i. The Appellants books of accounts were duly tax audite....
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....the cash was deposited out of cash sales has not been controverted. Thus, the impugned addition has resulted in double taxation of the same amount, once in the form of cash sales already offered to tax by the appellant at the rate of tax applicable to the appellant and then again by way unexplained Cash Credit on deposits arising from such sales u/s 68 at higher rates specified u/s 115BBE. ix. The appellant had furnished his sale register for the FY 2016-17 before the AO. The sales were duly corroborated with the output tax on account of VAT. The copies of VAT returns were also furnished before the AO. x. When the assessee had purchased goods through proper banking channel and the books of accounts were neither disbelieved nor rejected by the AO, so merely for the reason that assessee had made higher cash sale during the impugned assessment order vis-à-vis the preceding previous year cannot be a sole reason for disbelieving the cash sales made, more-so when the lesser sales during the preceding previous year is substantiable on account of ill health of the appellant. The addition appears to have been made, more on the basis of suspicion, conjectures and sur....
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....oint out any defect in the books of account or audit financial statement of the assessee. The suspicion, however, strong it may be the same cannot be accepted as final truth without bringing on record some tangible evidence. Mere surmise cannot replace an evidence to prove the wrong doing if any by the assessee. Once, the A.O. accepts the books of accounts and the entries in the books of account are matched, there is no case for making the addition as bogus sales. The Hon'ble High Court in the case of Lal Chand Bhagat Ambica Ram Vs. CIT (1959) 37 ITR 288 (S.C) held that the assessee maintained the books ot accounts according to the mercantile system and there was sufficient cash balance in its cash books and the books of account of the assessee were not challenged by the Assessing Officer. If the entries in the books of accounts are genuine and the balance in cash is matching with the books, it can be said that the assessee has explained the nature and source of such deposit. 8. The another reason for making the addition by the A.O. that the assessee has not obtained full address details of the customers who have purchased jewellery below the amount of Rs. 2 l....