TaxTMI 
TaxTMI 
2025 (9) TMI 1190
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....ailable on record that assessee has made cash deposits in the bank accounts during demonetization in Specified Bank Notes (SBN), case of the assessee was taken up for scrutiny. After considering the submissions made, assessment was completed u/s 143(3) at a total income of INR 2,03,49,108/- by making following additions/disallowances:- (i) Cash deposit during demonetization as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act of INR 28 Lakhs; (ii) Payment of INR 56 Lakhs to Vani Designs as undisclosed; (iii) Payment of purchase of INR 52,07,920/- as unexplained investment u/s 69C r.w.s. 115BBE of the Act; and (iv) Purchase of INR 35,32,658/- as bogus. 3. Against the said order, assessee preferred appeal before Ld. CIT(A), who vide impugned order dated 27.06.2023, dismissed the appeal of the assessee. 4. Aggrieved by the order of Ld. CIT(A), assessee preferred appeal before this Tribunal by taking following grounds of appeal as given in Form 36 filed:- 1. "The Officer at National Faceless Appeal Centre (hereinafter referred to as the CIT(A)) erred in upholding the action of the Assistant Commissioner of Income tax, Circle 5(2)....
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...., needs to be deleted. 4. The CIT(A)erred in upholding the action of the Assessing Office making disallowance of aggregate amount of Rs 35.32.65% of purchases debited to the profit and loss account treating the same as bogus purchases. The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer inasmuch as he has not correctly appreciated the facts of the case in its entirety, the impugned addition thus, needs to be deleted. 5. The Assessing Officer erred in disallowing the claim of deduction under chapter VIA of Rs 21,950 per return of income without giving any reasons. The appellant contends that on the facts and in the circumstances of the case and in law, this being a mistake apparent on record, a suitable direction may be given to the Assessing Officer. The appellant craves leave to add to, alter or amend the aforestated grounds of appeal." 5. All grounds of appeal were argumentative in nature therefore, Ld. Counsel was directed to file precise grounds of appeal and accordingly, assessee filed concise grounds of appeal which read....
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....provision of section 145(3) of the Act nor any defect was pointed out in the cash book and other details submitted. It is further submitted that Ld. CIT(A) upheld the addition mainly for the reason that assessee had not made any sales in cash of this magnitude in preceding AY. Ld. AR submits that during the course of assessment proceedings, month-wise and person-wise details of cash sales made were submitted, according to which total sales of INR 34,88,666/- was made in cash to various parties. Besides a chart was also filed containing month-wise sales for which payments were received in bank, as available at Pages 154 to 156 of Paper Book and submits that AO has not made any inquiries though the assessee has not only filed ledger accounts but also submitted the copies of the bills issued to these parties. It is further submitted by Ld. AR that assessee filed her written submissions before GST/VAT authorities who had not doubted the turnover declared by the assessee. Therefore, the cash deposit during demonetization being fully supported by cash sales thus deserves to be accepted as genuine. Reliance is also placed on following judgement of Co-ordinate Bench of Tribunal : ....
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....le on the same day. As observed above, as per cash book, withdrawal of INR 99,500/- [52,500 + 47,000] were made on 19.11.2016 and 21.11.2016 which cannot be in SBN from bank and thus, this amount was received either in new currency or in INR 100/- & INR 50/- currency. Further receipt of INR 50,500/- on 10.11.2016 from Mansha, INR 21,700/- on 15.11.2016 from Anshu and INR 1,20,000/- from Vismita on 20.11.2016 shown as receipts in cash book could not in SBN as it was not legal tender after 8.11.2016. Thus, as on 22.11.2016 total amount of INR 2,91,700/- (99,500 + 1,20,000 + 21,700+ 50,500) available with assessee was must be in new currency or in the currency other than SBN and therefore, out of total cash balance of INR 8,43,836/-, cash balance in SBN of INR 5,52,136/- (8,43,836 - 2,91,700) was only available with the assessee for deposit. As against this assessee deposited INR 8.00 Lakhs in SBN on 22.11.2016 thus the source of balance amount of INR 2,47,864/- (8,00,000 - 6,24,336) remained unexplained. Therefore, it could be safely presumed that INR 5,50,000/- was utilized for making deposit in bank out of the cash balance as per books of accounts and source of remaining INR 2,50,0....
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....ted that assessee has repaid the loan taken earlier from M/s Vani Designs which inadvertently was not reported in the Tax Audit Report. It is submitted by Ld.AR that merely because the said amount was not reported in Audit Report, same cannot be added back to income of assessee more particularly when entire transaction was carried out through banking channel and duly recorded in the books of accounts of assessee wherein source of payment is duly declared as regular business transaction. 16. On the other hand, Ld. Sr.DR for the Revenue vehemently supported the orders of the lower authorities and requested for the confirmation of the addition made. 17. Heard the contentions of both the parties and perused the material available on record. From the perusal of copy of ledger account as appearing in the books of assessee as well as assessee's account in M/s Vani Designs, it is seen that a sum of INR 76,55,506/- was payable to M/s Vani Designs as on 01.04.2016 out of which INR 50,00,000/- were paid by the assessee during the year through bank. It is a running account with M/s Vani Designs, having opening balance of INR 70,15,000/- as on 01.04.2015 and during FY 2015-16, assessee ha....
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....al contribution. However, facts remained that assessee failed to file precise payments as well as recipients and other particulars. Therefore, the genuineness of these payments remained unverified. At the same time, since these payments were recorded in the books of accounts, same could not be treated as unexplained investment u/s 69 of the Act. Looking to these facts, we are unable to concur with the arguments of the assessee that no addition could be made as the assessee has failed to substantiate the claim. Accordingly, the addition made is hereby confirmed. As we have already hold that the provision of section 115BBE of the Act are not applicable to AY 2017-18, thus AO is directed not to invoke the provisions of section 115BBE on this addition. Accordingly, Ground of appeal No.4 raised by the assessee is partly allowed. 23. Ground of appeal No.5 raised by the assessee is with respect to the addition of INR 35,32,658/- by holding the purchase made from two parties as bogus. 24. Before us, Ld.AR for the assessee submits that assessee made purchases from various suppliers however, AO has made addition of INR 18,02,666/- towards purchase from M/s Sunlight Enterprises and of I....
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....nts- Sunlight Enterprises 282 3. Month-wise purchase details- Sunlight Enterprises 283 4. Invoices of purchases from Sunlight Enterprises 284-297 5. Bank A/c Statement highlighting entries with Sunlight Enterprises 298-300 6. Affidavit and Aadhar Card of Sanjay Deopa, proprietor of Chirag Enterprises 301-304 7. Confirmation of Balance- Chirag Enterprises 305 8. Confirmation of Accounts- Chirag Enterprises 306 9. PAN Card of Sanjay Deopa 307 10. Invoices of purchases from Chirag Enterprises 308-318 11. Month-wise purchase details- Chirag Enterprises 319 12. Bank A/c Statement highlighting entries with Chirag Enterprises 320-323 13. Purchase qty. details from April, 2016- March, 2017 324-335 14. Details of month-wise sales 2016-17 336 15. Month wise stock details- April, 2016- March, 2017 337-348 16. Details of Purchases above Rs. 50,000 from a single party- Nidhika Rehani (prop. M/s Dsyngreen) 349 28. The assessee has filed confirmation of the parties, item purchased, copies of invoices, bank statements wherein payments made to these parties by banking channel etc. It is further seen that asses....
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....ary paid to Rekha for the month of Oct 2016 cash 11,950.00 24,99,866.00 Dr Dr Salaries Payable Payment Being Cash Salary paid to Gurmeena for the month of Oct 2016 cash 12,000.00 24,87,866.00 Dr Dr Salaries Payable Payment Being Cash Salary paid to Kiranpal for the month of Oct 2016 cash 8,000.00 24,79,866.00 Dr Cr PALLAVI PATEL Receipt cash 1,22,325.00 26,02,191.00 Dr Being amount cash recd Dr (as per details) Payment 11,686.00 25,90,505.00 Dr Fan 3,850.00 Dr Electrical Repair & Maint. 7,836.00 Dr Being Cash Paid for Fan & electric goods for repaimg & fitting as per detail attached Dr Bhirgu Nath Sah Payment 15,000.00 25.75,505.00 Dr Being Cash Paid to Bhirgu Nath for his full payment vide bill no - 184 10-Nov-16 Dr (as per details) Payment 314.00 25,75,191.00 Dr Tape 100.00 Dr Kaaj Work 74.00 Dr Zip Dyeing 100.00 Dr Needle 40.00 Dr Being Cash Paid For Tape, Kaaj Work, Zip Dyeing, & Needle as per expenses detail attached 26,25,691.00 Dr Cr MANSHA Receipt 50,500.00 Being amount cash recd against order 500.00 26,25, 191.00 Dr 12-Nov-16 Dr Conveyance Expenses Payment Being cash paid to Hargovind....