TaxTMI 
TaxTMI 
2025 (11) TMI 1892
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.... Rs. 7,66,500/- (ii) Disallowance on TDs - Rs. 68,742/- (iii) Disallowance of interest on loans - Rs. 28,46,677/- (iv) Disallowance of Expenses under section 14A - Rs. 20,050/- (v) Addition under section 69A towards cash deposits -Rs. 1,24,41,000/- (vi) Disallowance of lease charges - Rs. 35,00,000/- 3. On further appeal, the CIT(A) gave partial relief to the assessee. Though the assessee has raised various grounds with regard to the additions sustained by the CIT(A) during the course of hearing the ld. AR submitted that the grounds other than Ground No. 4 are not pressed. Accordingly, Ground No. 1 to 3, 5 & 6 are dismissed as not pressed. Ground No. 4 reads as under: "4. In the facts and circumstances of the case, Ld. AO has erred in invoking the provisions of section 69A of IT Act, 1961 as none of the conditions for invoking section 69A are satisfied as to: ⮚ Non recording the money (herein) in books of accounts Cash has been duly recorded in the books of accounts & tax has also charged on the said income recorded. AND ⮚ No explanation about the nature & source of acquisition of money....
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....hich well explained before the AO. The ld. AR also submitted that having accepted the cash sales making an addition under section 68 towards the same would amount to double taxation. The ld. AR relied on the decision of the Ahmadabad Bench of the Tribunal in the case of ITO vs. Ashapura Petrochem Marketing Pvt. Ltd. (ITA No. 511/Ahd/2020 dated 18.10.2023) where an identical issue has been considered by the Tribunal and deleted the addition towards cash deposit. 5. The ld. DR on the other hand submitted that the assessee has received SBN against the Circular issued by the Government of India which is in violation of law and therefore the AO has treated the cash deposit as unexplained. The ld. DR fairly conceded that the AO has not examined the issue of merits based on documents submitted by the assessee and accordingly prayed that the issue may be remitted back for re-examination. 6. We heard the parties and perused the material on record. During the course of assessment the AO noticed that the assessee has deposited a sum of Rs. 1,24,41,000/- in SBN into the Bank A/c during the demonization. The AO did not accept the submission of the assessee that the Petrol Pump falls withi....
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....71AAC of the Act are initiated for misreporting of income." 7. From the perusal of the above findings, it is clear that the AO has made the addition for the reason that the assessee has been receiving SBN in violation of circular issued by the Government and that the assessee has not filed any response to the show cause notice. We notice that the finding with regard to submission of details, is factually incorrect since the assessee has filed various details such as ITR, audited financials, tax audit report, sales register, bank statement, monthly purchase & sales, month-wise cash book summary VAT return, month wise quantitative details of stock along with stock register etc., before the AO vide letters dated 18.12.2018, 01.11.2019, 22.11.2019 and 13.12.2019. However we are unable find anything being recorded by the AO in the assessment order regarding the above details submitted by the assessee or any adverse findings as why these details are not acceptable. We further notice that even the CIT(A) has not given any findings on merits. From the perusal of the month wise details of cash & credit purchases and sales details (page 48 to 50 of paper book) we notice that out of the to....
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....es, Copies of VAT returns etc. However the Ld. A.O. is not able to find any defect in the books of accounts, except general statements made in the assessment order. Though the A.O. has doubted the sales made during the year, he is not doubted the purchases made or stock maintained by the assessee during the year. Further the assessee also demonstrated the fluctuations in the sales during the entire period and there is no drastic increase in sales during the period of demonetization. It is further noticed that it is the month of May 2016 sales reported at 84.81 lacs. Similarly, in the month of November 2016 (demonetization period), the sales is reported at 1.04 crores which is not found to be drastic higher figure. Thus the deletion made by the Ld. CIT(A) does not require any interference. 8. The Co-ordinate Bench of this Tribunal in the case of Shree Sanand Textiles Industries Ltd. (cited supra) held as follows: " ... .9.6. We also note that the provisions of section 68 cannot be applied in relation to the sales receipt shown by the assessee in its books of accounts. It is because the sales receipt has already been shown in the books of accounts as income at the t....
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....ed various details including the books of accounts, VAT returns, details of cash deposits made in the requisite format and other details called for by the AO. In the order of assessment, the AO has brought to tax the impugned addition u/s. 68 by stating that - "3.7 I have carefully gone through the reply of the assessee. The assessee has made cash deposit during demonetization period of Rs. 2,18,38,160/-. On verification of the e-filed cash book it is seen that cash balance as on 08/11/2016 is Rs. 6,32,731/-. From this it is clear that the assessee has made cash deposit of Rs. 2,18,38,160/-, out of opening cash balance as on 08/11/2016 of Rs. 6,32,731/- & cash sales from 09/11/2016 to 31/12/2016 of Rs. 2,12,05,429/-. 3.8 As per RBI notification vide no. SO 3416(E) dated 09/11/2016 and subsequent SOS it is clearly mentioned that "For making payments in all Pharmacies on production of doctor's prescription and proof of identity", .. However, the assessee in the reply has stated that they are not required by law to keep the copy of the prescription for record; hence, they have not maintained it. From this it is very clear that the assessee firm has violated the R....
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....Bhageeratha Pattina Sahakara Sangha Niyamitha (cites supra) held as follows: 15. The case of the A.O is that the assessee has collected the demonetized notes after 8.11.2016 in violation of the notifications issued by RBI. Accordingly, he has taken the view that the above said amounts represents unexplained money of the assessee. I am unable to understand the rationale in the view taken by A.O. I noticed that the AO has invoked the provisions of sec.68 of the Act for making this addition. I also noticed that the assessee has also complied with the requirements of sec.68 of the Act. The AO has also not stated that the assessee has not discharged the responsibility placed on it u/s 68 of the Act. Peculiarly, the AO is taking the view that the assessee was not entitled to collect the demonized notes and accordingly invoked sec.68 of the Act. I am unable to understand as to how the contraventions, if any, of the notification issued by RBI would attract the provisions of sec. 68 of the Income tax Act. In any case, I notice that the assessee has also explained as to why it has collected demonetized notes after the prescribed date of 8.11.2016. The assessee has explained that it ....
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