TaxTMI 
TaxTMI 
2025 (12) TMI 276
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....ion of addition of Rs. 20,63,763/- by ld. CIT (A) as made by the ld. AO on account of cash deposited during the demonetization period u/s 69A of the Act as unexplained money. The assessee has also challenged the estimation of profit at the rate of 3.68% on the undisclosed sales of Rs. 60,43,953/- thereby making an addition of Rs. 2,22,417/- without rejecting the books of accounts u/s 145(3) of the Act, which was also confirmed by the ld. CIT (A). 04. The facts in brief are that the assessee filed the return of income on 17.12.2017, declaring total income of Rs. 3,75,760/-. The assessee derived income from business and profession and other sources during the year. The case of the assessee was selected for scrutiny and statutory notices along with questionnaire were issued and duly served upon the assessee. The ld. AO during the course of assessment proceedings observed from the record that the assessee had deposited cash into two bank accounts with Syndicate bank, Rajarhat branch cash aggregating to Rs. 22,00,350/-. Accordingly, show cause notice was issued to assessee as to why the same should not be added u/s 69A of the Act. There was no compliance by the assessee and according....
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....thorities below. The Ld. D.R therefore prayed that the order of Ld. CIT(A) may kindly be affirmed. 08. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee has undisputedly deposited cash during demonetization period amounting to of Rs. 22,00,350/-, which were duly accounted for by the assessee in the books of account. We note that the cash was deposited out of the cash available in the cash book which was out of sales effected by the assessee in the normal course of business. We note that the assessee has shown these cash sales in the profit and loss account and computed the income accordingly. In our opinion, if the addition u/s 69A of the Act is allowed to be made as unexplained money which is not so as the said cash deposited were out of cash sales then it would result into double addition of the same income which is not permissible under the Act. We also note that the AO has not rejected the books of account and even sales were not doubted. Therefore, the action of the AO by adding the cash deposited during demonetization u/s 69A amounted to double addition which is not permissible under the Act. First by....
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....asis and third party comparable which gives credibility to such an estimation. All these assumptions and calculations carry AO's own figment of imagination. We note that the assessee has countered all the assertions and assumptions made by the AO by submitting the details from its audited books of accounts and stock registers by providing all the relevant details from time to time. We note that the assessee had given all the explanations which are reasonable and there is no other material except for the estimation of probable sales value done by the Ld. AO for the purpose of treating the deemed income as unexplained money in the hands of the assessee. We also note that assessee has duly recorded in its books of accounts all the sales made on the date of announcement of demonetization in the time window available on that day which has been credited in the P&L Account. It is also noted that the assessee had stock in hand to meet the sales demand, all of which is duly recorded in the stock register furnished before the authorities below. It is also noted that there is no specific discrepancy pointed out in respect of the books of account, more particularly when the purchases have not ....
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....nce or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, or the finding was, in other words, perverse and this court is entitled to interfere." 7.3 Ld. Counsel pointed out that assessee had all the capabilities, infrastructure, manpower, process and procedures to handle and deal with high volume of customers during small time window available to it. For comparability of the circumstances which existed on the day of demonetization announcement, he pointed to the occasion of Dhanteras which is a festival wherein similar kind of high traffic volume of customers happens for the purchase and sale of gold/bullion/jewellery, it being an auspicious day for making such investments. It was placed on record that on the day of Dhanteras which fell on 28.10.2016 i.e. prior to the day of announcement of demonetization, sales bills to the tune of 229 numbers were generated while dealing with those many customers which was also during the smaller time window available on that day depending on the muhurats. It was also pointed out that the VAT retu....
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....ority have proceeded on the premise that the credit entries appearing in the books of account are unexplained cash credit u/s. 68 of the Act. It is quite patent and obvious that provisions contained u/s. 68 and 69 of the Act operate in different situations and conditions therein are also different. Therefore, when it was never the case of the Department that the disputed addition has to be treated as unexplained investment u/s. 69 of the Act, at the second appellate stage, a new dimension cannot be given to the disputed issue by converting the addition from section 68 to section 69, that too, without providing an opportunity of being heard to the assessee. More so, when applicability of section 69 was never within the purview of the Tribunal and not even the case of the Department. I don't intend to deal further on the issue as to whether the Tribunal has powers to change the provision under which the addition has been made by the Departmental Authorities as it is academic in the present case considering the fact that the conditions of section 69 are not satisfied." 09. Considering the facts of the case in the light of the above decisions, we are of the view that the order passe....