TaxTMI 
TaxTMI 
2025 (7) TMI 433
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....l analysis presented in para 11 of assessment order makes it clear that abnormal sales happened only in a particular time period i.e. from01/10/2016 till 08/11/2016 and not through tax invoices but through sales invoices. Moreover, though assessee claimed that all his sales are fully vouchered, assessee had not furnished any vouchers of sales through sales invoices in the time period from 01/10/2016 till 08/11/2016. The Hon'ble Supreme Court in Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1, had also clearly stated that the onus is on the assessee to explain the nature and source of cash credits, whether they stand in the assessee's account or in the account of a third party. 3.) During assessment proceedings the assessee had not submitted any invoices of sales made through sales invoices. There was no way to ascertain the identity of these customers and to ascertain genuineness of these transactions. Moreover all these transactions were blow the limit of Rs.2,00,000/- so that mandatory requirement of quoting the PAN number may be bypassed." 2. Subsequent to the filing of the aforesaid appeal, the assessee filed a Cross Objection in which the following grounds ....
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.... authorities, which was only due on the 20th day of the following month and therefore assessee's who were indulging in such malpractices had the benefit of the period from 1st October, 2016 to 20th November, 2016 to manipulate their sales and accounts, in order to explain their unaccounted SBNs. Proceeding from this understanding, the ld. Assessing Officer noted that the assessee had made total sales of Rs.49,99,07,263/- during the financial year 2016-17 and the total cash sales during the year amounted to Rs.4,94,40,120/-. In respect of these cash sales, the customers were not identifiable. He noted that the average daily cash sale through sale invoices during the financial year 2016-17 was only Rs. 1,35,452/-. However, of the total cash sales, of Rs.4,94,40,120/-, the assessee had made cash sales of Rs.3,68,53,859/- in October, 2016 and of Rs.37,25,359/- uptil 8.11.2016 i.e. in the period between 1.10.2016 to 8.11.2016, the assessee had suddenly made cash sales to the tune of Rs. 4,05,79,218/- to unidentifiable small customers. The ld. Assessing Officer further noted that, this abnormality (of the spurt in October/November sales) was not seen in sales made through proper tax invo....
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....corded as cash sales in his books during the period 1.10.2016 to 30.10.2016, he held the same to be unexplained under section 68. However, he noted that the assessee had offered a sum of Rs.70,00,000/- as unexplained cash in PMGKY and therefore, he made an addition of only Rs.2,98,53,859/-. However, the ld. Assessing Officer separately added back Rs.70,00,000/- declared under the PMGKY and claimed as deduction under section 37, holding that the deduction was only allowable if at least 25% of the declared undisclosed income was deposited in a bank or post office as per section 199C of the Scheme and since the assessee had not furnished any evidence in this regard, the same was added back to the income of the assessee and it was determined at Rs.5,26,55,469/-. 5. Aggrieved with this assessment order, the assessee went in appeal to the ld. CIT(A). Before the ld. CIT(A), it was submitted that the assessee had furnished a quantitative tally of stock month wise for the previous year as well as for the current year; that the assessee had furnished a complete cash book; that the month wise sales and purchases for the last two years and the succeeding year had also been furnished; that t....
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....also questioned the decision of the ld. AO to deny the deduction under the PMGKY, pointing that he had deposited Rs.3,80,00,000/- in his bank account out of his sales. In view of the enquiry made by the Investigation Wing of the Income Tax Department and pressure applied by them, he made the declaration under PMGKY to purchase peace and it was advised to him at that time that the amount would be deducted from his business income and the said declaration had been made only with a view to avoid harassment and litigation. 7. The ld. CIT(A) considered the submissions made by the assessee and noted that the ld. AO had not established that the assessee had accumulated cash in its books which was deposited on 10.11.2016. The assumptions made on the basis of comparison of sales figures of earlier years were not foolproof, as similar or higher sales have been made by the assessee in following financial year and the refusal to accept the sales shown by the assessee was not on account of any independent enquiry but only on the basis of assumptions/interpretations made by the ld. AO while comparing results of earlier years. Therefore, the ld. CIT(A) deleted the addition of Rs.2,98,53,859/- ....
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....etails, monthly sales details and monthly opening and closing stock details before the ld. AO and the ld. AO had not pointed out any discrepancy in any of these. It was also submitted that the assessee had filed the cash book for the period 1.10.2016 to 8.11.2016 before the ld. AO and the ld. AO had not pointed out any discrepancy in the same. The ld. AR took us through page no. 54 of his paper book which showed that the assessee had an opening stock of Rs.4,68,60,215/- as on 1.04.2016. It was submitted that as a result of monthly purchases and sales, the details of which had been submitted to the ld. AO, the assessee had an opening stock of Rs. 13,08,49,603/- as on the 1st of October and a closing stock of Rs.9,53,63,490/- on 31.10.2016. Thus, the assessee clearly had the necessary stocks in its possession to effect the sales. It was further submitted that any comparisons of the assessee's sales with sales for any previous year, were odious in view of the fact that the assessee's business was expanding and this was proved by the fact that it was not just the period of demonetization which had seen an increase in sales, but the sales continued to grow throughout the rest of the yea....