AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1056
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....Circle - 1, Jalgaon) on 08.04.2019 as per jurisdiction. Notice u/s 142(1) of the Act on 20.05.2019 along with questionnaire asking the assessee to file certain details regarding the scrutiny assessment. Second notice u/s 142(1) of the Act was issued on 31.10.2019 requesting the assessee to furnish the details as per the questionnaire. The assessee in response to notice filed certain documents such as computation of income, financial statement, tax audit report, VAT return, party wise purchase details, sundry creditors, bank statement etc. 3. During the course of assessment proceedings the Assessing Officer observed from the details furnished by the assessee that it has deposited total cash to the tune of Rs.1,68,15,700/-. Out of total deposits an amount of Rs. 33,66,000/- was deposited into bank through SBN notes (demonetized notes). From the various details furnished by the assessee, he noted that the assessee is having closing cash in hand of Rs. 18,65,717/- as on 08.11.2016 i.e. on the day of demonization. Since the assessee has deposited SBN notes to the tune of Rs. 33,66,000/- during the demonetization period which is more than closing cash in hand as on 08.11.2016, therefo....
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....ls as the required details are very well available with the assessee in the form of purchase/sales bills, stock register, etc which are required to be maintained mandatorily as per the provisions of Bombay Prohibition Act. The assessee did not furnish the purchase price and MRP of various types of liquor along with the working of GP separately for country liquor and the IMFL. In view of said facts, I have left with no option but to adopt reasonable average G.P of 10.00% in absence of separate details thereof." 5. After deducting the GP already shown by the assessee at Rs. 79,67,562/-, the Assessing Officer made addition of Rs. 54,18,873/- on account of difference in the GP. 6. Before the Ld. CIT(A) / NFAC it was argued that the assessee has deposited cash of Rs.1,68,15,700/- during the demonization period out of which an amount of Rs.13,56,000/- was Specified Bank Notes deposited in the account maintained with the Hasti Co-op. Bank Ltd., Chalisgaon and an amount of Rs.20,10,000/- SBN deposited in the bank account maintained with Godavari Laxmi Co-op. Ltd., Jalgaon. Thus, the total cash deposited in specified bank notes come to Rs.33,66,000/- which has been adopted by the Asse....
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....ed. Your appellant prays for deletion of entire addition. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice. 9. Ground No.1 relates to the validity of the order passed u/s 143(3) in absence of 143(2) notice issued by the ACIT, Circle-2, Jalgaon. 10. The Ld. Counsel for the assessee at the outset submitted that the first notice u/s 143(2) of the Act was issued by the ITO, Ward 2(2), Jalgaon which was duly served on the assessee. Subsequently the case was transferred from the ITO, Ward 2(2), Jalgaon to DCIT Circle-2, Jalgaon (now Circle - 1, Jalgaon) on 08.04.2019. However, after such transfer the new Assessing Officer has issued notice u/s 142(1) on 20.05.2019 along with questionnaire. Thereafter, second notice u/s 142(1) was issued on 31.10.2019. However, no notice was issued by the ACIT, Circle - 1, Jalgaon u/s 143(2). Therefore, the entire proceedings on account of non issue of notice u/s 143(2) by the jurisdictional Assessing Officer vitiates the entire assessment proceedings. 11. The Ld. DR on ....
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....e find an identical issue had come up before the Co-ordinate Bench of the Tribunal in the case of ACIT vs. Out a box Media Solutions LLP (supra). We find the Tribunal after considering various decisions has dismissed such a ground raised by the assessee by observing as under: "18. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed by both the sides. We have also considered the various decisions cited before us by both sides. Before dealing with the merit of the case, first, we would like to decide the legal ground raised by the assessee as per Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 according to which, the ACIT, Panvel Circle being the jurisdictional Assessing Officer has not issued the notice u/s 143(2) of the Act and therefore, the assessment order is invalid. It is an admitted fact that the assessee had filed its return of income before the ITO, Ward-2, Panvel who had issued notice u/s 143(2). Subsequently due to monetary limits of the income returned, the ITO Ward-2, Panvel transferred the file to the ACIT, Panvel Circle who issued notice u/s 142(1) ....
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....st proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier; (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made." 20. We find an identical issue had come up before the Hon'ble Supreme Court in the case of DCIT vs. Kalinga Institute of Industrial Technology (supra). In that case, the Hon'ble High Court of Orissha has quashed the assessment order on the ground that the jurisdiction to issue notice u/s 143(2) of the Act in case of assessee laid with JCIT (OSD) (Exemption), Bhubaneswar, whereas the notice u/s 143(2) of the Act....
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....assessee are concerned, these are distinguishable and not applicable to the facts of the present case especially in view of the decision of Hon'ble Supreme Court cited (supra). In view of the above discussion and following the decision of the Hon'ble Supreme Court in the case of DCIT vs. Kalinga Institute of Industrial Technology (supra), we hold that the assessment order dated 16.12.2019 passed by the ACIT, Panvel Circle is valid. The legal ground raised by the assessee under rule 27 of the Rules is accordingly dismissed." 16. Since in the instant case the assessee has never challenged the non issue of notice u/s 143(2) by the new Assessing Officer after transfer of files to him as per jurisdiction from the ITO, Ward 2(2), Jalgaon and has participated in the assessment proceedings, therefore, we do not find any merit in the ground raised by the assessee challenging the validity of assessment in absence of issue of notice u/s 143(2) by the DCIT, Circle - 1, Jalgaon. The first issue raised by the assessee is accordingly dismissed. 17. The second issue raised by the assessee relates to the order of the Assessing Officer in passing the order without issuing specific show....
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....tions or partners' capital because the appellant doesn't fall in the entity entitled for receiving the SBN during demonetization period. Hence, the appellant has failed to furnish any plausible and satisfactory explanation with respect to the sources of the excess SBN deposits during the demonetization. This is the reason, why the AO has assessed the deposits of SBN in bank as unexplained money u/s 69A of the Act. 4.3.3 Besides, the appellant has furnished the comparative figure of cash sales for A.Y. 2016-17 and 2017-18 in the written submission but the issue in the present case is not the source of cash deposits in regular time/period but the issue relates deposit of SBN during the demonetization period which can't be equated with the cash deposit during non-demonetization period. Under these circumstances, the decision of the Hon'ble Supreme Court in the case of Sumati Dayal [214 ITR 801 SC] and Durga Prasad More [(1971) 82 ITR 540 SC] is relevant wherein it was held that the apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look ....
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....ation of Rs. 5,40,450/-. The third ground raised by the assessee is accordingly dismissed. 22. So far as the fourth issue i.e. addition of Rs. 54,18,873/- made by the Assessing Officer on account of low GP which has been sustained by the Ld. CIT(A) / NFAC is concerned, we find the Assessing Officer adopted GP rate of 10% on the total turnover of Rs. 1,33,86,435/- due to non submission of certain details required by the Assessing Officer such as purchase/sales bills, stock register, etc which are required to be maintained mandatorily as per the provisions of Bombay Prohibition Act. The assessee did not furnish the purchase price and MRP of various types of liquor along with the working of GP separately for country liquor and the IMFL. We find the Ld. CIT(A) / NFAC while sustaining the addition has elaborately discussed the issue and dismissed the grounds raised by the assessee by observing as under: 4.2.1 In the present case, the appellant engaged in running a wine shop of foreign liquor as well as country liquor. During the present year, the appellant firm had shown gross profit of Rs. 79,67,562/- on total sales of Rs. 13,38,64,348/- which comes to 5.95% of the total sa....
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....te details of purchasers because a retailer should sale the liquor to permit holders only after obtaining the complete details of the purchaser. However, the appellant failed to furnish the MRP of the each sold product and also the copies of purchase & sales bills to satisfy the assessing officer with respect to correctness of the claim of purchases, sales and valuation of closing stock. Under these circumstances, I am convinced with the action of the AO rejecting the book results of the appellant. 4.2.2 So far as the rate of gross profit considered by the AO is concerned, it is seen from the assessment order itself (point no. 11.6 & 11.7 of show cause notice reproduced at page 7 & 8 of assessment order) that the AO has pointed out after examination of cost cards that the retailer's margin in liquor other than country liquor is around 8% to 8.5% other than the various discounts and scheme from the distributors/manufacturers. The AO also pointed out that the retailers' margin in country liquor case ranges from 12% to 15%. In fact, I have also seen the information available on public domain and find that the liquor business generally fetches margin of 20% to 30% of t....