TaxTMI 
TaxTMI 
2025 (2) TMI 1419
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....explained credits and the learned CIT(A) has also erred in law as well as on facts in confirming the same. 3. Succinctly, the factual panorama of the case is that assessee before us is an Individual and filed its return of income, on 29.10.2017, declaring therein total Income at Rs. 22,10,140/-. The return of income has been processed u/s 143(1) of the Income Tax Act, 1961. Later on, the assessee`s case was selected for complete scrutiny under CASS. The notice u/s. 143(2) of the Act was issued on 10.08.2018 and duly served upon the assessee. Further, various notice u/s 142(1) of the Act was issued to the assessee, calling for various details relevant to the e- assessment proceedings in his case. In response to the above notice, the assessee through e-filling portal uploaded necessary details online as called for and details were verified by the assessing officer. During the assessment proceedings, the assessing officer noticed that assessee deposited cash of Rs. 3,00,00,000/- in the bank during demonetization. Vide notice u/s. 142(1) of the Act, the assessee was requested to furnish the details regarding the cash deposited during the demonetization. In this response, assessee su....
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....;ble Kolkata High Court in the case of CIT Vs. Precision Finance (P) Ltd. 208 ITR 465(Cal), on the issue of genuineness of transactions. The ld CIT(A) also relied on the judgement of Hon'ble Supreme Court in the case of PCIT VS NRA Iron and Steel Pvt. Ltd. 412 ITR 161 (SC), wherein it was observed that all the transactions of conversion of unaccounted money should be subjected to careful scrutiny. Hence the assessee was required to prove the source of cash deposited during demonetization period with proper evidence but the assessee has failed to prove it as incomplete sale bills have been filed. Hence, relying upon various case laws as mentioned above, the addition of the Assessing Officer was confirmed by ld. CIT(A). 8. Aggrieved, by the order of the ld. CIT(A), the assessee is in further appeal before us. 9. Learned Counsel for the assessee, Shri Chetan Agarwal, pleaded that during the course of assessment proceedings, the assessee submitted various documents and evidences, such as, cash book, sales register, stock register, profit and loss account, balance sheet and cash flow statements etc. The assessee`s books of accounts are audited by chartered accountant. The audi....
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....e the assessee has sold the goods during the demonstration period, as there is no corresponding Sales in the subsequent years. The Ld. CIT(DR) further stated that the assessee has filed during the assessment proceedings, the VAT return and cash book and other finance statements, which should not be relied on, because it is an exceptional case, which raises doubt. Hence, the addition made by the assessing officer should be confirmed. The Ld. CIT(DR) has also submitted written submission before the Bench, which are reproduced below: "1. Introduction of Turnover and Average Sales Calculation: * The person has a total sales turnover of Rs.547 crore from selling gold and silver during the financial year 2016-17. * Assuming the business operates for 300 days in the year (excluding holidays and non-working days), the average daily turnover is calculated as follows: Average daily sales-2547 crore 300 days 1.82 crore per day text (Average daily sales) \frac (2547 text(crore) | (300 text(days)) 21.82 text crore per day) Average daily sales 300 days 547 crore 1.82 crore per day 2. Fact of Cash Sales Limited to Two Days Only: A key fact in ....
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.... suddenly switch to making high-value cash transactions, especially when the impending demonetization created significant uncertainty about the value of large currency denominations, 6. Support from Supreme Court Judgment-CIT vs. Sumati Dayal: In CTT vs. Sumati Dayal (1995) [214 ITR 801 (SC)], the Supreme Court emphasized that claims contradicting common human behaviour and market probabilities should not be accepted without substantive evidence. In that case, the Court rejected Sumati Dayal's claim of frequent horse race winnings due to the improbability of such events occurring naturally. Applying this principle here, the sudden and unnatural surge in high-value cash sales on two specific days-when all other sales throughout the year were processed through banking channels-defies normal business practices and market trends. The drastic spike in cash transactions just before demonetization is highly suspicious and unlikely to be coincidental. 7. Conclusion: The sudden shift from zero cash sales for the entire financial year to Rs. 1.5 Cr. In cash sales on 07.11.2016 and 08.11.2016, just before the demonetization announcement, is hig....
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....file of the lower authorities. We note that assessee is engaged in the business of trading of gold and silver bullion for a decade. During the year under appeal, the total turnover of the assessee was Rs. 542.72 crores. Out of the total sales of Rs. 542.72 crores, the assessee made the cash sales to the tune of Rs. 2,99,87,180/- only, which is not even 1% of the total sales. The assessing officer has not doubted sales of Rs. 542.72 crores, and only doubted sales of Rs. 2.99 crore, besides, assessing officer has not doubted purchase made by the assessee. The cash sales of Rs. 2.99 crore, is not a significant amount if we consider the total sales of the assessee to the tune of Rs. 542.72 crores. Having so much Sales of Rs. 542.72 crores, the cash sales of Rs. 2.99 crore is not a material item, especially when the audited books of accounts of the assessee were not rejected by the assessing officer and purchase were not doubted by the assessing officer. To prove the genuineness of the cash sales of Rs. 2.99 crore, the assessee submitted, cash- book, stock register, balance sheet, profit and loss account and complete financial statements, including schedules and return of income, and VA....
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....in tax appeal No. 2471 of 2009 (ii) Hon'ble Delhi High Court in case of CIT vs. Kailash Jewellery House- Judgment dated 09.04.2010 in ITA No. 613/2010. (iii) Hon'ble Delhi High Court in case of PCIT vs. Agson Global (P.) Ltd.-441 ITR 550. 17. We find that the cash sales were duly recorded in the books of accounts and there was a complete tally of quantitative details of purchase, sales and stock. Further, the books of account were duly audited. The cash sales were reported in the VAT Returns and the same were reduced from the inventory of goods. The VAT department also accepted the sale of the assessee. In this situation, before taking any adverse view, it was incumbent upon the assessing officer to reject the books of accounts under section 145(3) of the Act, before disbelieving the sales. However, the assessing officer has not done the same and directly proceeded to disbelieve the sales. This action of the assessing officer is patently incorrect and untenable in law. It is a settled position under the law that the assessing officer cannot question the book result without rejecting the same by invoking the section 145(3) of the Act. In this regard, the....