TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 43
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....ssing Officer noted that the assessee in the Profit & Loss Account has shown total sales at Rs. 39.71 Crores, cost of sales at Rs. 32.45 crores and other expenses at Rs. 3.72 Crore thus, showing a book profit of Rs. 4.13 crore before payment of salary and interest to the partners. He therefore asked the assessee to furnish the party-wise details of purchases and other expenses. The assessee produced the purchase register before the Assessing Officer reflecting the names of the suppliers along-with the amount. Since the purchase register does not reflect the details such as the addresses and PAN of the suppliers, therefore, the Assessing Officer held that the authenticity of the purchases could not be ascertained. According to the Assessing Officer, though the assessee, vide submission dated 04.12.2019, claims to have furnished details on 25.10.2019 in respect of parties for expenses exceeding Rs. 1,00,000/-, however, the assessee had neither furnished such details on 25.10.2019 nor made any submission on said date. Furthermore, the assessee furnished only details of sundry creditors on 04.12.2019. Thus, the assessee according to the Assessing Officer has failed to discharge the onu....
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....the various parties from whom the assessee had shown to have taken unsecured loans. However, no replies were received from any of the parties. The Assessing Officer noted that in the audit report filed along with the return of income the assessee has shown unsecured loan received at Rs. 25 lakhs from Shri Ashish Madan Mutha. However, in the confirmation of this party filed during the course of assessment proceedings in response to the show cause notice the assessee has shown to have received an amount of Rs. 20 lakhs only from this party. In absence of any proper explanation to his satisfaction regarding the discrepancy, the Assessing Officer made addition of Rs. 5 lakhs to the total income of the assessee u/s 68 r.w.s. 115BBE of the Act. 5. The Assessing Officer further noted that the assessee has deposited an amount of Rs. 43 lakhs in its bank account during the demonetization period which was deposited in two installments i.e. Rs. 40 lakhs on 02.12.2016 and Rs. 3 lakhs on 08.12.2016. On being asked by the Assessing Officer the assessee explained the source of cash deposited as under: 1. Cash on hand as on 01.04.2016 Rs. 50,000 2. Cash sales from verifies persons Rs. 6....
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.... appellant and in the absence of which notice u/s 133(6) of the Act also could not be issued to the appellant. However on perusal of the submission made by the appellant it is seen that the appellant has submitted date-wise details of all the submissions made before the AO and the relevant documents submitted before the AO along with them. Further it is also seen that the appellant has shown turnover of Rs. 39,71,30,604 against which it has claimed expenses of Rs. 36,17,58,045/- After going through the submissions of the appellant and the AO 's order, it is seen that on one hand the appellant has made the following submissions: "1.1 The assessee is in the business of trading in marble, granite and other stones. It filed ROI on 28.09.2017 declaring total income Rs. 1,55,00,900. 1.2 The assessee's sales during the year amounted to Rs. 39,71,30,604/-. The expenses incurred and depreciation as per books during the year were Rs. 36,17,58,045/- as detailed below: S.No. Particulars Amount (Rs.) 1 Cost of sales 32,45,46,670/- 2 Manpower Expenses 41,52,025/- 3 Administrative Expenses 68,44,745/- 4 Selling Expenses 40,40,527/- 5 Finance Cost 1,80,66,894/- ....
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....ition. Copy of the VAT order dt 05.12.2019 is enclosed in Annexure J 1.11 In para 3.9 of the Asst order the AO has alleged that copies of books of accounts were not furnished. We submit that the assessee had produced a tally back up of accounts for the year on 04.12.2019 which is duly acknowledged by the Dept (Ref "Annexure 1 Reply 04.12.2019") and taken the AO through this on laptop in the course of assessment proceedings on 25.10.2019. At the relevant time no discrepancies or adverse observations were made wrt the books of account. The assessee undertakes to make available the Tally back up of its books of accounts for verification of the AO. (In case there are not readily available in the Dept). 1.12 For ease of understanding we have summarized ledger transactions of the expenses as mentioned in para 1.2 above giving breakup in terms of materiality. It is to be noted that almost entire expenses are paid for by cheques. There are no expenses in excess of Rs 10,000 paid for in cash, as is also reported in Form 3CD by the auditors. 1.13 From the above-mentioned facts and circumstances, it is evident that the purchases & expenses and corresponding creditors outstanding on 31....
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.... year FY 16-17. So Form3CD had effect of showing journal entry of Rs 5 lacs as well as receipt of Rs 20 lacs received from Sh.Ashish Mutha received in the current year. In view of the above the clarification given by the appellant, the claim of the appellant appears to be valid and hence the addition of Rs 5 lacs made by the AO is hereby deleted." 9. So far as the addition of Rs. 40 lakhs added by the Assessing Officer u/s 69A as unexplained money is concerned, the Ld. CIT(A) / NFAC deleted the same by observing as under: "From the above table, it is observed that number of documentary evidences have been provided by the appellant during the assessment proceedings and the appellate proceedings. Further it is seen that the total cash sales is actually 1.67% of the total turnover shown by the appellant. The issue regarding discrepancy of opening balance as noted by the AO has also been explained wherein it is seen that Rs. 50000 pertained to the imprest cash available with the employees on 1.12.16 and in fact the opening cash balance as on 01.04.16 is Rs. 4,09,967/-. Further as far as cash deposits out of cash sales are concerned the appellant has produced cash book, sales ledger ....
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....fficer in the assessment proceedings? 11. Grounds of appeal No.1 and 2 relate to the order of the Ld. CIT(A) / NFAC in deleting the addition of Rs. 1 crore made by the Assessing Officer. 12. The Ld. DR strongly challenged the order of the Ld. CIT(A) / NFAC in deleting the additions made by the Assessing Officer. He submitted that many details were not filed by the assessee and no books of account were ever produced before the Assessing Officer. The assessee made purchases from unknown parties. He submitted that the Ld. CIT(A) / NFAC has deleted the addition by relying on the additional evidences submitted by the assesse which were admitted at the back of the Assessing Officer. Since the Ld. CIT(A) / NFAC has violated the provisions of Rule 46A of IT Rules, 1962 r.w.s. 251 of the Act and has not called for a remand report from the Assessing Officer, therefore, the order of the Ld. CIT(A) / NFAC be reversed and that of the Assessing Officer be restored. 13. The Ld. Counsel for the assessee on the other hand strongly supported the order of the Ld. CIT(A) / NFAC. Referring to para 3.10 of the assessment order, he submitted that the Assessing Officer has alleged that the assessee did....
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....es Ground No 3: Cash Deposits of Rs 43 lakhs 2 Monthly VAT Return in Form 231 from April 2016 to Oct 2016 3 Sales Tax Assessment Orders: Central Sales Tax (CST): Dt 05.12.2019 Value Added Tax (VAT) Dt 30.11.2019 4 Ledger extract of cash sales [Annexure O before CIT(A)] 5 Copies of Invoices of cash sales for the year [Annexure N before CIT(A)] 6 Submission before AO dt 12.12.2019 [Annexure F before CIT(A)] 7 Monthwise summarized details of sales as per books and VAT Returns for y e 31.03.2017 (Annexure P before (CIT(A)] 8 Cash book summary for y e 31.03.2017 furnished before CIT(A) in Annexure Q 14. He submitted that no additional evidences were filed before the Ld. CIT(A) / NFAC. The Assessing Officer simply made the addition without pointing out any defects in the books of account. The Ld. Counsel for the assessee referring to page 218 of the paper book drew the attention of the Bench to the percentage of GP and NP for various assessment years which are as under: Sr No Asst Year Turnover (Rs) GP Ratio (%) NP Ratio (%) Assessment U/s 143(3) Remark 1 2013-14 262,175,920 13.18 1.65 Or....
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....ase accounts along with invoice copy and purchase register for financial year 2016-17 and the hard copy of the same was produced before the Assessing Officer subsequently. The various other details furnished before the Assessing Officer are also given in the paper book. The Assessing Officer without pointing out any defect in the books of account, has made an adhoc addition of Rs. 1 crore. Further, the assessment orders for assessment years 2013-14 to 2015-16 which were passed u/s 143(3) of the Act show that no additions were made out of purchases. The GP and NP rates declared by the assessee for the impugned assessment year are also higher than the past four years. Under these circumstances, without pointing out any defect in the various details furnished by the assessee, addition of lump sum amount of Rs. 1 crore made by the Assessing Officer in our opinion, is not justified. 18. So far as the allegation of the Revenue that the Ld. CIT(A) / NFAC has accepted the additional evidence is concerned, the Ld. DR also could not point out which are the additional evidences that the Ld. CIT(A) / NFAC has accepted especially when all the details produced before the Ld. CIT(A) / NFAC were ....
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....e the assessee has erroneously shown this loan of Rs. 5 lakhs received in the preceding year as advance received from customers but rectified the same in the subsequent year through a journal entry, therefore, we do not find any infirmity in the order of the Ld. CIT(A) / NFAC deleting the addition by accepting the contention of the assessee on this issue. Ground No.3 raised by the Revenue is accordingly dismissed. 23. Ground of appeal No.4 raised by the Revenue relates to the order of the Ld. CIT(A) / NFAC in deleting the addition of Rs. 40 lakhs made by the Assessing Officer u/s 69A of the Act. 24. The Ld. DR strongly relied on the order of the Assessing Officer. 25. The Ld. Counsel for the assessee on the other hand while supporting the order of the Ld. CIT(A) / NFAC submitted that the assessee has sufficient cash balance on the date when the deposits were made. The sales of the assessee were not disturbed by the Assessing Officer and the books of account were also not rejected. He submitted that the cash sales of the assessee for the year amounted to Rs. 66,50,490 which is roughly 1.67% of the total sales. The details of cash sales were also produced before the Assessing Offi....