TaxTMI 
TaxTMI 
2025 (11) TMI 1389
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....iating the explanations, documents and evidences submitted by the appellant regarding the source of cash deposits. 2. That on the facts and circumstances of the case the ld. Assessing officer grossly erred in relying of the statement given by Shri Rambabu Samaria and treated the purchase and consequently sale as bogus and made addition of Rs 44,61,000/-. Deposit in the bank account during the demonetization period. 3. The appellant craves leave to add, alter, amend, or withdraw any of the above grounds of appeal at the time of hearing. 3. Succinctly, the fact as culled out from the records is that the assessee e-filed return of income on 7.11.2017 declaring total income at Rs. 12,53,650/-. The case was selected for scrutiny assessment under CASS and accordingly, notice u/s 143(2) of the IT Act was issued on 9.8.2018 fixing the hearing on 23.8.2018. In response thereto, assessee has filed reply on 23.8.2018. Thereafter, notice u/s 142(1) along with questionnaire was issued on 21.1.2019, 9.2.2019 & 4.9.2019. In response thereto, the assessee has uploaded his reply on portal. The replies were examined on test check basis. Record reveals that for the year under con....
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....tated to have never filed ITR. Thus, the only alleged credit purchase also proved bogus. From above statement of Shri Rambabu Sambharia, it is evident that he was not engaged in the any business activities and the proprietorship concerned namely Parijat Enterprises was opened and operated in his name by some other person and he is not aware of the transactions made in this concern. Thus, the purchases shown by the assessee from this party proved to be bogus. On 17.12.2019, notice u/s 133(6) was issued to Commercial tax department, Jaipur for providing details of VAT/Sales tax return for AY 2016-17 and KYC of following concerns: a) Shri Ram Babu Sambharia, Prop. M/s Parijat International b) Shri Puneesh Lodha, Prop. M/s Pragati Gems & Jewels c) Shri Kamlesh Sharma Prop. M/s K S Jewells In the case of M/s Parijat International (TIN No.08574052608), the CTO, Jaipur has submitted that "this firm is closed on 31.3.2013. So it has no assessment after 2013-14. In the case of M/s Pragati Gems & Jewels (TIN No.08152259212), the СТО, Jaipur has submitted only KYC form. He has not submitted any return. In the case of M/s K S Jewels (TIN No.08842....
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.... its just a "Make believe arrangement" to make a veil on unexplained cash deposit made by assessee. 8.3 The explanation submitted that assessee has purchased the stock through valid bills and made payment through RTGS/cheque. The said plea is squarely rejected in view of above investigation made during the course of assessment proceedings. Apart from above, assessee has failed to submit any of the following corroborative evidence for "test of genuineness of purchases" i.e. a) Confirmation account of purchaser b) Copy of bank account of purchaser c) Copy of ITR of purchaser d) Copy of Sales tax return e) Copy of stock register 8.4 Apart from above, assessee has not demanded the cross-examination of Shri Rambabu Samaria whose statements were supplied to the assessee along with show cause notice dated 18.12.2019, which is evident from the remarks in front of show cause notice ie. "refer to attachment The assessee's ADCPK0819N_2017_Attachment_100022360763.pdf. objection for not providing the statement of Sh. Rambabu Samaria is squarely rejected. For the sake of natural justice, the same was again provided to the assesse....
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...., in a surprise announcement, demonetization of old Rs. 500/- and Rs. 1000/- notes was announced by the Government of India and the demonetization came into effect from 00.00 hrs of 09.11.2016. All the citizens of the country were given option to deposit old demonetized currency notes of Rs. 500/- and Rs. 1,000/- held by them as on 08.11.2016 by 31.12.2016 in their bank accounts besides nominal amounts of Rs. 2,000 to Rs. 4,500 which could be exchanged from banks or withdrawn from ATMs. During the period 09.11.2016 to 30.12.2016 there was virtually no liquidity in the country. Therefore, all the major business cash transactions in the month of November, 2016 took place only for 8 days from 01.11.2016 to 08.11.2016 in old currency notes of Rs. 500/- and Rs 1000/-only. Demonetization was an unexpected announcement with the purpose of curbing black or parallel economy of the country. Owing to sudden announcement of demonetization, persons who had accumulated their unaccounted income as on 08.11.2016 in the form of cash of old Rs. 500/- and Rs. 1000/- currency notes were left with no option but to deposit their unaccounted income in their bank accounts or stand losing the enti....
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....lly in October 2016, was due to festive season demand. However, this contention also does not hold under scrutiny. The AO rightly observed that the cash deposits during the 50-day window of demonetization saw an abnormal spike of over 561% compared to the same period in the preceding year, and a 710% jump in overall annual cash deposits. Similarly, cash sales recorded during October 2016, just days before demonetization, spiked unnaturally to Rs. 34.64 lakhs, as against Rs. 95,091/- in October 2015, an exponential rise unsupported by any credible evidence or third-party confirmations. The assessee failed to produce even a single customer invoice with a verified identity. No KYC, PAN, or addresses of customers were submitted to justify the volume and nature of such sales. The claim that all customers were unidentifiable cash buyers goes against commercial prudence, particularly in the sale of high-value gold and diamond jewellery. Furthermore, the argument that sales increased due to Diwali in October 2016 is speculative and unsubstantiated, especially when no matching increase in stock purchases or inventory movement is credibly demonstrated. It is pertinent to no....
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....tances, human conduct and preponderance of probabilities." The Hon'ble Supreme Court by placing reliance on its own judgment in the case of Durga Prasad More, observed the following in the case of Sumati Dayal vs. Commissioner of Income-Tax 1995 AIR 2109 "As laid down by this Court, 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 into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities." Quite clearly, in the case of the appellant, the 'apparent' is not the 'real', the apparent wears the mask of legitimacy, while the 'real' is a sham and a farce. According to Oxford English Dictionary, a 'sham' means "a thing that is not what it is purported to be. What is purported to be' in this case is an attempt made by the appellant to explain its unexplained money as cash sales from business because due to the sudden announcement of demonetization it had no option but to deposit the unexplained money into banking system. Wha....
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....ions made under section 68 of the Income Tax Act, 1961 in the hands of the assessee That the assessee appellant is an individual and engaged in the business of trading of Gold Ornaments & Jewellery in the names of proprietorship concern Alka Gems and is regularly filing its return. That For the year under consideration, it was is also registered under the provisions of Rajasthan Value Added Tax Act under the composition scheme. That the assessee filed its Return of Income u/s 44AD of the Act on 07.11.2017 and declared total income at Rs 12,53,650. GROUND NO. 1-2 [Addition of Rs 44,61,000/- u/s 68 r.w.s 115BBE] 1. That the assessee had deposited cash of Rs. 44,61,000/- in its bank account out of cash in hand available with it on 10.11.2016 & 11.11.2016, i.e., during the period from 09.11.2016 to 30.12.2016 (Demonetization period). Desired information was uploaded on the portal of the income tax department. 2. That the case of the assessee appellant was selected for regular scrutiny u/s 143(3) of the Act and notices u/s 143(2), 142(1) were issued to the assessee appellant from time to time. That in response to notice issued u/s 142(1), assessee app....
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....y recorded in the books of accounts; the source of cash was from sales made by the assessee out of stock-in-hand available with the assessee and thus there was no occasion to invoke section 68 of the Act when the same was already declare in the sale made during the year under consideration. 9. That for the sake of convenience we are reproducing the cash flow statement of the year under consideration which were submitted before the ld. Assessing officer:- S. No. Particulars Amount 1 Opening Cash in Hand as on 01.04.2016 1756396.00 2 Cash Sales during the period of 01.04.2016 to 31.03.2017 7322266.00 3 Expenses paid in Cash/Cash Purchases made during the period of 01.04.2016 to 31.03.2017 1180980.00 4 Cash deposited in the banks during the period of 01.04.2016 to 31.03.2017 i) Cash deposited from 01.04.2016 to 08.11.2016 Rs. 4000.00/- ii) Cash deposited from 09.11.2016 to 31.12.2016 Rs. 4461000.00/- ili) Cash deposited from 01.01.2017 to 31.03.2017 Rs. 1044000.00/- 5509000.00 5 Cash withdraws made by Alka Khandaka during the period of 01.04.2016 to 31.03.2017 2355000.00 6. Closing Cash in Hand as on 31.03.2....
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....HIGH COURT] in which it was held that "Addition u/s 68 could not be made in respect of the amount which was found to be cash receipts from the customers against which delivery of goods was made to them". Thus, the sales recorded in the books of account of the assessee firm cannot be considered as unexplained and thereby we direct the ld. AO to delete that addition as the assessee has duly supported the source of cash deposited immediately on 3rd day of demonstration which was the proceedings of the sale made by the assessee. The bench noted that it was not the cash of the revenue that the assessee has accounted the sales in cash on the date of demonetization but we note that sales invoice no. 540, 541 dated 08.11.2016 was by cheque. Even out of cash deposit of Rs. 70,00,000/- the sale after the demonetization was for Rs. 26,12,469/- which was also supported by the delivery of goods and having details of the items sold to customer. Considering the overall facts and material placed on record we see no reason to sustain the addition and therefore, the same is directed to be deleted. Appeal of the assessee is allowed Hon'ble Chandigarh Bench in Sandeep Kumar Sanserwal....
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....osited cash on demonetization on single day on 13.11.2016. In support of the sales the assessee had submitted all the details as required under law and the AO based on the same details accepted the part of the sales on same set of records. Thus, we see no reason to sustain the addition of the amount recorded as sales i.e., for an amount as "unexplained cash deposits" u/s 68 and thereby direct the AO to delete the same. Ground no. 1 raised by the assessee is allowed. * Hon'ble Jurisdictional ITAT Jaipur Bench in Dinesh Kumar Soni v. DCIT [2024 (11) TMI 854] has held: Addition u/s 68 - unexplained cash credit - Case of the assessee was selected for scrutiny as the assessee has deposited cash during demonetization period - HELD THAT:- On one hand ld. AO accepted the sales and on the other hand on the same set of evidence placed before him he is not considered the other part of the sales and that too based on the estimation, presumption and assumption he has not placed on record failure on the part of the assessee as when the part of the sale is considered then why the other part is not considered. Addition made by the ld. AO and sustained b....
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....us sales, evidence of bogus purchases, and non-existing cash balance in the books of account. The AO did not even reject the books of accounts of the appellant under the provision of section 145(3) of the Act. Therefore, the contention of the revenue on the facts and circumstance of the case is not accepted - Appeal of the revenue is dismissed. 13. It is further submitted that provisions of Section 115BBE are applicable only on the income which is taxable under the head Income From Other Sources. Since in this case, the source of cash deposit in bank is income from business thus section 115BBE is not applicable. It is further submitted that the assessee had already offered cash sales as income in trading account then the same cannot be taxed u/s 68 or u/s 69A r.w.s. 115BBE of the Act. PRAYER In view of the above facts, legal submissions, and judicial precedents, the assessee-appellant most respectfully prays that the illegal addition of Rs. Rs 44,61,000/- made by the Assessing Officer u/s. 68 r.w.s. 115BBE of the Act being contrary to settled law and being devoid of merits on facts be directed to be deleted. 6. To support the contention so raised in the writ....
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....92/- and profit of Rs 10,03,660/-. V) The main issue examined during the scrutiny proceeding was cash deposit in the bank account during demonetization and verification of unexplained purchases for the period under consideration. VI) The Ld. Assessing Officer made addition u/s 68 r.w.s. 115BBE on account of cash deposit amounting to Rs 44,61,000/-. VII) The Ld. CIT(A) dismissed the plead taken by assessee in toto. VIII) The assessee is in appeal before the Hon'ble ITAT Bench, 'A' and has raised various grounds of Appeal. The revenue is taking liberty to submit rejoinder and the argument taken by the AR before the Hon'ble Bench on 23/09/2023 as under: - a. The First ground of Appeal is related with the action of Ld. CIT(A). The same is reproduced as under- i. On the facts and circumstances of the case, the Ld. CIT(A) has grossly erred in confirming the addition of Rs 44,61,000/- made by the assessing officer u/s 68 r.w.s 115BBE of the IT Act, 1961 without properly appreciating the explanation, documents and evidences submitted by the appellant regarding the source of cash deposit. The revenue humbly submits that the grou....
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.... and Sale Bills, VAT Returns, Cash Books, Bank Book, Bank Statements,, Stock Summary, etc. and all other information as desired by the Assessing Officer. 3. That the Assessing Officer with preconceived notions, disregarded the submissions of the assessee on assumption & presumption and passed the impugned assessment order dated 16.12.2019 u/s. 143(3) of the Act and made addition of entire cash deposited by the assessee during the demonetization period of Rs. 44,61,000/- u/s. 68 read with section 115BBE of the Act. 4. That Id. Assessing officer issued the summon u/s 131 of the Act to the one of the seller of the assessee appellant i.e Shri Ram Babu Sambharia prop. of M/s Parijat International from whom the assessee make a purchase of Rs 10,80,450/. That Shri Ram Babu Sambharia denied the fact of any sale made by him to the assessee appellant during the year under consideration. 5. That on the basis of the statement recorded u/s 131 of the Act, the Id. Assessing officer treated the purchase made by the assessee as bogus irrespective of the facts that the entire payment were made by the assessee through account payee cheque on 21.03.2017 and same was debit i....
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....iled to appreciate and consider that the assessee was having a jewelry business and cash sales is a normal feature; There is no bar in making cash sales. In the impugned assessment order as well, the Assessing Officer has also not highlighted which statutory provision the assessee had not complied with. That it is settled law that suspicion howsoever strong but cannot take place the character of evidence. 11. That Ld. Assessing officer made addition of Rs 44,61,000/- u/s 68 of the Act which was merely cash deposit during the demonetization period and same is by way of sale transaction which supported by the complete sale biils and purchase biils. That once the assessee declares the cash deposit by way of sale then the sales recorded in the books of account of the assessee firm cannot be considered as unexplained. 12. For the afore-said proposition, we wish to refer & rely upon the following binding judicial precedents of Hon'ble Jurisdictional ITAT, Jaipur Bench, Jaipur: * Hon'ble Jurisdictional ITAT Jaipur Bench in SHREE DURGA JWELLERS v. ACIT [2025 (5) TMI 116] has held: Addition u/s 68 - cash deposited in the bank account - assessee has not dis....
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....that the cash receipts for the month of October have been deposited in the very next month in November cannot be a reason to dispute rather it supports the case of the assessee by satisfying the proximity test and the nexus which the assessee has established between the sales and the deposits, this coupled with the fact that there was epidemic regarding FMD disease and winter season resulting in increase sales in these two months has not been totally discarded by the AO and the Id CIT(A) and the fact that the sales have been duly reported and forms part of VAT filing and VAT assessment shows that sales cannot be disputed. The decision in case of J.M.J Essential Oil Company [2022 (7) TMI 1017 - HIMACHAL PRADESH HIGH COURT) doesn't support the case of the Revenue as in that case, there were cash sales only in a particular month and there was sufficient material on record to show cash sales were fabricated unlike the present case, where the assessee is regularly undertaking cash sales and there are no material on record to establish the sales so reported are fabricated except suspicion due to high sales vis-à-vis other months and which cannot be a ground to dispute....
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....d on the presumption and assumption. They did not deal to the fact of the case on the same set of evidence part of the sale is accepted and part of the same were not accepted. Considering that factum we do not find any reason to sustain the addition and therefore, we direct the Id. AO to delete that addition made in the hands of the assessee. Assessee appeal allowed. Hon'ble Jurisdictional ITAT Jaipur Bench in ITO v. Raj Kumar Nowal (2022 (11) TMI 1334] has held Addition u/s 68-cash sales of the assessee unexplained - assessee is an individual and deriving income from business of jewellery - CIT-A deleted the addition HELD THAT:- The assessee is engaged in the business of Jewellery and gold. The higher cash sales on festival season Karva Chouth, Dhanteras and Diwali is general feature in the trade of the assessee and such sales is also apparent from the cash book submitted during the course of assessment proceedings. It is not the case of the A.O. that the assessee did not have the sufficient stock for making the sales. Thus, it cannot be said that the figures of sales and purchases are not supported by the quantity details. As regard to not providing....
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.... Siddharth Ranka/ Saurav Harsh/Satwika Jha Authorized Representatives Encl: as above' Conclusion on Ground No. 1 The Revenue respectfully submits that Ground No. 1 is not maintainable. The assessee has not pointed out any specific factual error, perversity, or legal infirmity in the order of the Ld. CIT(A). A vague allegation that the appellate authority did not "properly appreciate" evidence is insufficient in law. The Hon'ble Supreme Court in CIT v. Calcutta Discount Co. Ltd. (1973) 91 ITR 8 (SC), para 11 held that general and vague grounds of appeal which do not specify the error in the order under challenge are not maintainable. Similarly, in CIT v. Walchand & Co. Pvt. Ltd. (1967) 65 ITR 381 (SC), para 16, the Court observed that unless a finding of fact is shown to be perverse or unsupported by material, it cannot be interfered with. In the present case, the Ld. CIT(A) has passed a reasoned, self-speaking order after considering the assessee's submissions, the evidence produced, and the report of the Commercial Tax Department. The assessee has not demonstrated how such findings are contrary to record or in violatio....
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....nd after considering submission of the Assessee made additions. The assessee prepared profit and loss account and Balance Sheet on the basis of that computation was prepared and taxes were paid and declared all the details in the return of income. Before making comments on these documents Revenue respectfully submits that each and every assessee has not only rights but duty also to declare true profit in the income tax return. It is also important and vital to highlight and income tax return is a self-declared document and every filer verified that at the end of the ITR form. In gist, the verification says that whatever declaration has been made, is to the best of its knowledge and belief and same are correct and complete with an approach that same is in accordance with the provisions of the IT Act in respect of Income Chargeable to Income Tax Act, 1961. The taxing system in India is for benefit of country and to establish equality among the citizen of nation. The Income Tax helps in strong building of nation with aim to transparency in the system. The assessee filed the Income Tax return as per her declared business. Now, what was the responsibility of the assessing office is to v....
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.... denied having signature in the bills, stating that these bills are not in his handwriting. Under these evidences, the assessee is still using those documents before an Appellate Authority is an classical example of misrepresentation and concealment of facts. * The Ld. Assessing Officer also issued 133(6) to the commercial tax department for further verification and the same has been confronted to the assessee (Page No. 7 of the Assessment Order). The CTO provided the information that Parijat International was closed on 31/03/2013. * The assessee has submitted another confirmation from Pragati Gems which is not having any signature of Paper Book (Page No 24 of the Paper Book). In the confirmation copy (Page No 27 of the Paper Book) signature are there but without any date and complete name of signatory authority. The assessing officer inspector was deputed to serve 131 to Sh. Puneesh Lodha Prop. M/s Pragati Gems as claimed by the assessee. But the inspector submitted the report that summon could not be served as no one was available at the given address (Page No. 3 of the Assessment Order). The Commercial Tax Officer responded in response to 133(6) that only KYC f....
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....0.95 lakh in Oct 2015. Closing cash in hand 31.10.2016: Rs. 41.69 lakh, but not deposited before demonetization (only Rs. 4,000 deposited). Abnormal 710% rise in deposits, 561% rise during demonetization, 374% rise in cash sales. Assessee's Defence: Claimed genuine purchases (bills + RTGS payments), festive season spike, business depends on customer footfall, maintained cash for business needs. Requested not to treat deposits as unexplained. AO's Findings Bogus Purchases: Parties non-existent; assessee failed to produce them. No confirmations, bank accounts, ITRs, VAT returns, or stock registers produced. Summons returned unserved. Statement of Ram Babu denied any sale; assessee did not demand crossexamination. Bogus Sales & Deposits: Sales concentrated mainly in Oct-Nov 2016; abnormal spike without evidence. No proof of customer identity or stock movement. AO held assessee tried to camouflage unexplained cash as sales. Application of Section 68: Cash deposits of Rs.44,61,000 treated as unexplained credits. Taxed under Section 115BBE @ 60%.....
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.... the claim of double taxation cannot survive. Application of Human Probability As held by the Hon'ble Supreme Court in Durga Prasad More (82 ITR 540) and Sumati Dayal (214 ITR 801), taxing authorities are entitled to look beyond the apparent and test transactions against the yardstick of human probability. It is not probable that jewellery worth lakhs would be sold entirely in cash to anonymous buyers without identity proof, especially during demonetization. The conduct of the assessee shows that the so-called "sales" were only a façade to introduce unaccounted cash. Colourable Device Following the principle in McDowell & Co. Ltd. (154 ITR 148, SC), colourable devices cannot form part of legitimate tax planning. The attempt of the assessee to give colour of genuineness to unexplained money by routing it through fabricated purchases and fictitious cash sales is a clear subterfuge. Conclusion In light of the above, the addition of Rs.44,61,000 made by the AO u/s 68 and confirmed by the CIT(A) is fully justified. The assessee has failed to discharge the onus cast upon her. The findings of the CIT(A) are bas....
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....ncome her case was came up for scrutiny assessment under CASS. Required statutory notices were issued and the assessee has filed the details as called for by the ld. AO. The assessee is engaged in trading business in gold jewellery in the name & style of her proprietorship concern M/s Alka Gems and also partner in M/s Raj Rattan Jewellers and Khandaka Sons Jewellers. For the year under consideration the assessee has declared total sales of Rs. 80,54,292/- and declared net profit of Rs. 10,03,660/- and filed her ITR as per the provisions of section 44AD of the Act. In the assessment proceedings the ld. AO noted that the assessee has maintained bank account with United Bank of India, Jaipur bearing account No. 1666050004145 wherein she deposited a sum of Rs. 44,61,000/- during the period 9.11.2016 to 30.12.2016. When the assessee was asked about the source of the money so deposited into the bank account the assessee submitted that it is the proceeds of the sales and in support the assessee filed the copy of the cash book, purchase bills, sales bills copies of the value added tax return and those record were also attached in the paper book filed by the assessee. Ld. AO examined the....
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....2), the СТО, Jaipur has submitted only KYC form. He has not submitted any return. In the case of M/s K S Jewels (TIN No.0884212515), the CTO, Jaipur has submitted the following: "the registration of the firm M/s K S Jewels Tin 08842212515 was cancelled on 1.7.2014. Due to cancellation, the firm was not assessed for the FY 2016-17. Also no VAT return was filed by the dealer for the FY 2016-17 as per the dealer profile report on official web portal." After examination of details filed, a show cause notice was issued on 18.12.2019 for seeking explanation on 20.12.2019 on the above issues as placed on record by the Assessing Officer. Assessee has filed reply / explanation on 19.12.2019 at portal. The ld. AO noted that the written submission filed by the assessee has been taken into consideration, but the explanation furnished by the assessee were found not acceptable. Having noted so ld. AO noted that assessee has tried to substantiate the cash deposit by way of bogus purchases / sales and mislead the revenue and thereby he rejected the contention of the assessee as per para 8.1 to. 8.7 of his order and thereby he by invoking the provision of section 68 of....
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....the ADIT, Jaipur II; that you are kindly requested to first clarify to us as to what is meant by the term Bogus Bills, according to use a bill is a bill. 4.1 A business man during the course of his business purchase the goods locally or from foreign parties mainly on credit. All such parties are income tax assessee (PAN is allotted by the income tax Department) and Sales tax assessee (TIN is allotted by the Sales tax Department). As a businessman we are supposed to know the products we are buying, the terms for which the goods are sold and also do a reasonable check on the parties who are supplying the products. Our checks are based on PAN issued by the income tax department and TIN issued by the Sales tax Department. We do not have the infrastructure nor have the power to investigate the parties who are supplying us the goods. What else are we supposed to gather from the parties? That is not the intention of the income tax Act and if that were the case then how one will conduct the business? If you as an official of the income tax Department do not own upto the parties to whom you have issued PAN then it is not the fault of the businessmen. Entire issue of bogus bill bein....
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....mission." 19.1 Vide letter dt. 9.8.2011, the A/R further submitted his arguments as under: Without prejudice to what has been submitted earlier and without admitting what has been stated earlier with reference to the purchase made by the assessee as well as sales made by the assessee over the years, we further submit that the employees or/and other persons clearly have stated in their statements that purchases or/and sales in the following units are genuine, fool proof, verifiable and not tainted: Jewellery Unit. Nizami Unit. Mumbai Division Thus, as far as these units are concerned they have to be treated to have been properly accounted for are genuine, not tainted, are fool proof and all purchases/sales in these units deserve to be accepted as such and no addition is required to be made as far as these units are concerned. For other units also, we have already explained that no addition is required to be made as all sales are vouched, detailed, verifiable and mainly on credit and all purchases so made have been made by A/c Payee Cheques and all payments relating to sales have been received by the assessee by A/c Payee Cheuqes. Further ....
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....the late night. Similar has been the Affidavit of Sh. Raghu Dutt Tiwari also. We have already placed on record the Affidavits of both these persons alongwith our letter of August 5, 2011. We strongly rely on these. On the face of it, these are after the alleged statements if any and therefore whatever has been stated on oath by them has to be accepted rather than what they had stated earlier under threat, coercion or pressurizing tactics. It is in the light of these facts that we again request you to provide right to cross examine of the persons who say otherwise/adversely other than, what is apparent on record. One may be a Director or an employee but if coercive measures are used one may not withstand atrocities committed by the officers & can write whatever one wishes & sign on the dotted lines. It is on record that pressurizing tacks were used employees were manhandled, were not permitted to eat properly, meet family members, sleep properly and threatened. We again submit that it is merely a bold statement by them and deserves to be ignored or it has no evidentiary value. 25. Since books of accounts were not complete on the date of search exact stock as per books on th....
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....dy discussed. 8. He also taken us to the submissions made by the appellant before the CIT(A) in para no.5.2 which reads as under:- 5.2 The AR of the appellant has contended as under:- The additions made by the Learned Assessing officer in the trading account are assailed as under- Business of the assessee-The assessee is a company and engaged in the business of manufacturing and trading of gem stones. The company has separate main four units working at different locations in Jaipur besides other branches at Mumbai and other places in various parts of India. Separate books of accounts are maintained for these units. The four units working at Jaipur are named as Gem Unit, Silver Star Unit, Jewellery Division and Nazami Division. Complete books of accounts have been maintained during the course of business. The assessee is maintaining all the books of accounts including cash book, bank books journal book, Ledger bills & voucher along with their supporting as prescribed U/s 44AA of the Income Tax Act, 1961. The books of accounts are maintained on mercantile system of accounting. The books of accounts are audited u/s 44AB of the Income Tax Act, 1961 a....
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.... the Learned Assessing Officer which suggests that assessee earned in the aforesaid process of bogus vouchers. The Learned Assessing Officer has not conducted any post search inquiries which may also support the finding of the Learned Assessing Officer of earning higher profits by the assessee by way of obtaining bogus purchase vouchers and issuing bogus sale vouchers. Thus there was no justification of the Learned Assessing Officer for taking u/s 153 in the case and subsequently completing the assessment by making addition of Rs. 1,02,92,954/-. Sunjay Oil Case Industries v. CIT 10 DTR 153 (Guj.) case is not applicable- The Learned Assessing Officer has referred the aforesaid case law on page no.36 of the assessment order. It is submitted that the ratio of this case has not been found applicable in the case of the assessee in Assessment Year 2006-07 wherein addition was made by disallowing 25% of the bogus purchases to the tune of Rs. 5.40 crores. In the first appeal itself the Learned CIT(A) directed for applying GP rate of 8.5% as against 7.40% disclosed by the assessee. It is further submitted that as mentioned by the Learned Assessing Officer in the assessment....
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....1. A.Y. Turnover Gross profit G.P. Rate Remarks 2006-07 546642847 40452067 7.40% 8.5% applied by the Learned CIT(A) 2007-08 687479941 58148440 8.45% 2008-09 977758373 94661850 9.68% 2009-10 103062727 140129208 13.59% 1 2010-11 154038479 15893587 10.31% The persual of the aforesaid table reveals that the result shown in Assessment Year 2010-11 is better in comparison to earlier years. The GP rate disclosed is better in comparison to that upheld by the ld. CIT(A) in A.Y. 2006-07 of 8.5%. No addition is Decision of ITAT in assesses's own case in assessment year 2005-06 to 200-10. The Hon'ble ITAT in ITA No.245/JP/2013 to 249/JP/2013 has deleted the entire addition made under the similar facts and circumstances therefore the issue of the appeal is squarely covered in favour of the assessee. 9. He contended that tribunal has committed serious error in not appreciating the argument advanced by the appellant in para no.5.5 before the CIT(A) which reads as under:- 5.5 The appellant was ag....
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....256(1) for referring the aforesaid two questions said to be arising out of Tribunal's order. 3. Having perused the assessment order made by the AO, the order made by the CIT(A) and the Tribunal, we are satisfied that the Tribunal was justified in rejecting the application under s. 256(1). It cannot be a matter of an argument that the amount of sales by itself cannot represent the income of the assessee who has not disclosed the sales. The sales only represented the price received by the seller of the goods for the acquisition of which it has already incurred the cost. It is the realisation of excess over the cost incurred that only forms part of the profit included in the consideration of sales. Therefore, unless there is a finding to the effect that investment by way of incurring cost in acquiring goods which have been sold have been made by the assessee and that has also not been disclosed. In the absence of such finding of fact the question whether entire sum of undisclosed sale proceeds can be treated income of the relevant assessment year answers by itself in negative. The record goes to show that there is no finding nor any material has been referred about the suppression....
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....y holding as under:- 19. We have heard the rival contentions and perused the material available on record. The ld. CIT(A) noted that during the course of search conducted at the premises of the assessee company, a number of incriminating documents were found pertaining to unaccounted sales, purchases and expenses of the business. It was further noted by the ld. CIT(A) that the assessee has admitted in the course of statement recorded during the course of search that total sales of all the units during FY 2008-09 was around Rs. 107 crores and the declared turnover was only around Rs. 10.36 crores. Further, ld. CIT(A) refers to the order of the AO and stated that the appellant has suppressed the turnover of the business substantially as may be seen from para 22 of the assessment order. It was further noted by the ld. CIT(A) that AO has accordingly rejected the book results declared by the appellant. It was further noted from the order of the AO that books of accounts were found to be not complete on the date of search and as per the stock statement as on 30.04.2009 filed by the appellant with the State Bank of Indore, the value of stock as on 30.04.2009 was Rs. 29,55,67,819/....
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.... the director of the assessee company has admitted that during the FY 2008-09, total sales are of Rs. 107/- crores as against recorded sales of Rs. 10.36 crores in its books of accounts and the fact that the said amount of Rs. 107/- crores has been brought to tax during the FY 2008-09 relevant to assessment year 2009-10. For the year under consideration, the quantification of undisclosed turnover has been determined by comparing the value of the physical stock as on the date of search i.e., 20.05.2009 and as per the stock statement submitted by the assessee with the State Bank of Indore on 30.04.2009. Given that the books of accounts were not complete as on the date of search, exact stock as per books on the date of search could not be worked out neither in terms of value nor quantitative tally. In post search proceedings and during the assessment and appellate proceedings as well, the assessee has failed to reconcile the same and offer any satisfactory explanation. Regarding valuation of such stock at the time of search, the AO has held that "the valuation was done by the experts, in the presence of assessee's employees dealing/managing the affairs on the date of search/seizur....