TaxTMI 
TaxTMI 
2025 (12) TMI 852
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....selected for scrutiny under CASS on the ground of huge cash deposit during demonization period. Accordingly, notice u/s. 143(2) and 142(1) of the Act along with questionnaire were issued, which were complied with by the assessee by filing the copies of ITR, audited report, computation of total income, bank accounts and detail of cash deposits, etc. The assessee submitted the following details. The learned AO found that during demonetization period though the assessee deposited Rs. 5,63,05,000/- however, only 17,000/- were deposited in SBN. The learned AO also noted that there was steep rice in the cash deposits during the demonetization period which was almost 25 times rise in the turnover of the assessee from Rs. 1,18,63,219/-, in order to A.Y. 2016-17 to Rs. 25,44,40,568/- in A.Y. 2017-18. Finally, the learned AO treated Rs. 5,63,35,000/- as unexplained money u/s. 69A of the Act and added the same to the income of the assessee in the assessment framed u/s. 143(3) of the Act dated 23.12.2019. 2.2. In the appellate proceedings, the learned CIT (A) also dismissed the appeal of the assessee after taking into consideration the reply/ submission of the assessee. The learned CIT (A) ....
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....he assessee has not furnished the cash book nor proved the cash deposits during the demonetization period, which was confirmed by the learned CIT (A) on this ground only. However, the cash book was duly submitted before the learned AO which was recorded at page no.3 of the assessment order and was also submitted before National Faceless Appeal Centre as is apparent from the acknowledgement filed before us, a copy of which is available at page no.21 of the Paper Book. In this case, we found that the learned AO has not rejected the books of accounts and sales were also not doubted, Therefore, the addition if allowed to be sustained in respect of cash deposits of Rs. 5,63,35,000/-, it would result in double addition of the same income. First, the assessee suo moto offering the sales in the profit and loss account and secondly, by way of making this addition which is not permissible under the Act. 2.4. Besides, addition was made by the learned AO u/s. 69A of the Act which is not correct section under which this addition could not be made. The case of the assessee is squarely covered by the decision of this Tribunal in the case of Ragini Verma Vs ACIT Circle-49(1), Kolkata in ITA No.....
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..... 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 money. We find that written submissions and all the relevant documentary evidences were placed on record. 7.1 The foremost point which invites our attention is the computation method adopted by the AO in arriving at this figure of Rs. 1,95,03,291/- which is nothing but based on a hypothesis to arrive at estimated probable sales value that could have been made on 08.11.2016 between the time window from 8.30 PM to 12 midnight and the entire day. As discussed above, Ld. AO has made certain assumptions on the logistics and the conduct of business transactions/operations to arrive at this probable sale value estimation. We find that the assumptions so made by the Ld. AO are devoid of any scientific basis 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....
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....e 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) wherein it was held as under - "The mere possibility of the appellant earning considerable amounts in the year under consideration was a pure conjecture on the part of the Income-tax Officer and the fact that the appellant indulged in speculation (in Kalai account) could not legitimately lead to the inference that the profit in a single transaction or in a chain of transactions could exceed the amounts, involved in the high denomination noted, - this also was a pure conjecture or surmise on the part of the Income-tax Officer. It is, therefore, clear that the Tribunal in arriving at the conclusion it did in the present case indulged in suspicion, conjectures and surmises and acted without any evidence 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." ....
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....nation 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 such financial year.] 8.1. A perusal of above section reveals that it deals with unexplained money in the form of bullion, jewellery or other valuable articles which are not recorded in the books of account if maintained by the assessee for any source of income and the assessee has not offered any explanation about nature and source of acquisition of money, bullion, jewellery or other valuable article but in the present case, the facts are quite clear that the assessee has shown the receipt of money from cash sales which has been duly accounted in the books of accounts. In the case of JMK Exports (supra) wherein the it has been held as under: "19. In the facts of the present appeal, it is an admitted factual position that the disputed transactions are duly recorded in the books of accounts of the assessee. Therefore, at the very threshold the provisions of section 69 will not get attracted. In fact, learned Standing Counsel appearing for the Revenue fair....