TaxTMI 
TaxTMI 
2024 (6) TMI 1525
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....erved on the assessee. The assessee submitted before the AO various documents and details as directed in the questionnaire accompanying the notice u/s 142(1) of the Act. The AO also issued notice u/s 133(6) to the banks of the assessee to furnish the bank statements, details of cash deposited in the specified notes, copies of pay-in-slips for cash deposits and details of payment made to various parties and KYC details etc. which were duly provided by the bank. The assessee, vide submission dated 11.10.2019 uploaded online, submitted that the details before the AO, which according to AO, were not in accordance with the notice u/s 142(1) of the Act dated 25.09.2019. Again show cause notice dated 26.11.2019 was issued fixing the hearing on 30.11.2019. The AO, after examining the information received from the bank, observed that the assessee has deposited cash during demonetization period and has failed to furnished any evidence of doing business. The AO,accordingly, again issued a show cause notice to explain the cash deposited failing which why the same should not be treated as unexplained money u/s 69A of the Act. Thereafter the AO, after giving details of cash deposits on page 2 to....
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....out the nature and source of acquisition of money, bullion, jewellery or other valuable articles or the explanation offered by the assessee is not satisfactorily then the money and value of bullion, jewellery or other valuable article may be deemed to be the income of the assessee for financial year. However,this is not the case of the instant year. The ld. A.R argued that in fact the sales were duly recorded in the books of account and the profit earned during the year from the business was offered to tax and due taxes were paid. Therefore at the very first place the invocation of section 69A is wrong as the same is not applicable to the case of the assessee. Therefore the Ld .A.R prayed that the addition so made under the wrong provisions of Act by misconstruing the provisions of law may be deleted by setting aside the order of Ld. CIT(A). Alternatively the Ld. A.R submitted that even if the addition is made by AO under wrong section then the same cannot be corrected by making the addition in the different sections which may be the correct as per the Act. The Ld. A.R submitted that undoubtedly the provisions of Section 69A were not applicable to the present case. In defense of ar....
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....ount received by assessee are nothing but sale proceeds in the course of business of the assessee. The addition has made only on the basis that after demonetization, the demonetization note could not have been accepted as valid tender. Since the sales proceeds for which cash was received are added u/s 69A of the Act which would amount to double taxation once as sale and another against as unexplained cash credit which is violate principles of taxation. The ld. AR further contended that Hon'ble ITAT of Kolkata in the case of ITO vs M/s. Senco Alankar in ITA No. 10/Kol/2021 dated 27.06.2022 on an identical fact held as under: "7. We have heard the rival submissions and carefully considered the material placed on record and gone through various judicial precedents relied upon by both the parties. At the outset, we find that the moot point for consideration is in respect of explanation furnished by the assessee regarding nature and source of cash deposit to the tune of Rs. 1,95,03,291/- (Rs. 3,87,69,800 - Rs .1,92,66,509) during the demonetization period which has been treated as deemed income of the assessee and added to the total income u/s. 69A of the Act as unexplained mon....
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....ecessary for the seller to bother about the name and address of the purchaser. 7.2 We further observe that the assertion of the ld. AO on the mere possibility of assessee earning considerable amount out of cash sales on the date of announcement of demonetization is a pure conjecture on the part of the AO and is based on surmises, speculating on the approach adopted by the assessee. Rather, the estimation approach of arriving at probable sales value by the Ld. AO cannot be rationally inferred to justify the addition so made. Thus, we find that the Ld. AO indulged in suspicion, conjecture and surmises and acted without any evidence and upon a view of facts which cannot reasonably be entertained. It is a settled position of law that in making the assessment, the AO is not entitled to make a pure guess and make an assumption without reference to any evidence or any material at all. It has been consistently held by various Hon'ble Courts that there must be some matter more than their suspicion to support the assumption made u/s. 143(3) of the Act. We find force from the decision of Hon'ble Apex Court in the case of Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC) wherei....
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....e sales value and the judicial precedents relied upon, we find no reason to interfere with the factual findings given by the Ld. CIT(A) in deleting the addition of Rs. 1,95,03,291/- made by the ld. AO. Accordingly, the appeal of the revenue stands dismissed." 8. On the issue of wrong invocation of provisions of Section 69A the Act, we observe that the same is not applicable to the transactions recorded in the books of accounts maintained by the assessee. For the sake of convenience the provisions of section 69A are extracted as below: 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for s....