AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 364
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....cted sales during the day and prior to the time of the survey, and such sales were not recorded in the books of account when the survey party conducted the stock verification. The appellant had duly submitted an explanation along with a reconciliation statement regarding the alleged stock difference, which ought to have been accepted. Accordingly, the appeal should have been allowed. 4. Regarding the deposit of Rs. 40 lakhs into the appellant's savings bank account, it was duly explained by the appellant that the said amount was already recorded in the books of account. Therefore, the provisions of Section 69A of the Income Tax Act have no application to the facts of the case. 5. The C.I.T. (Appeals) should have accepted that the sales were effected after the survey, and that the said sales were recorded in the books of account. The appellant had the requisite stock on hand for effecting the sales, and the sale consideration was duly recorded in the profit and loss account. There was no basis for the addition made by the Assessing Officer under Section 69A. and the CIT(A) equally is not justified in confirming the addition. 6. The C.I.T. (Appeals) sho....
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....l before the Tribunal. At the outset, the Learned Authorized Representative ("Ld. AR") submitted that only two issues arise for consideration in the present appeal: (a) Addition of Rs. 40,00,000/- made by the Ld. AO treating the cash deposits in the bank account as unexplained cash credit; and (b) Addition of Rs. 7,88,943/- made by the Ld. AO on account of excess stock found during survey. 6. With regard to the addition of Rs. 40,00,000/-, the Ld. AR submitted that the cash was deposited in the savings bank account out of cash sales made on 27.03.2019. He invited our attention to the cash book for the period from 01.03.2019 to 31.03.2019 placed at page nos. 40 to 47 of the paper book and submitted that the cash sales were duly recorded in the books of account. The Ld. AR further invited our attention to the returns filed under the GST Act placed at page nos. 9 to 18 of the paper book to demonstrate that all sales were duly reported and accepted by the GST authorities. He also referred to the stock statement for the period from 24.03.2019 to 31.03.2019 placed at page nos. 22 to 29 of the paper book and submitted that the corresponding reduction in stock was duly....
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....ated so during survey itself. The Ld. DR further submitted that the assessee has not produced any documentary evidence in support of the revised explanation either before the Ld. AO, the Ld. CIT(A), or before the Tribunal. Therefore, the explanation offered at this stage is an afterthought and deserves to be rejected. She accordingly prayed for sustaining both the additions. 10. We have considered the rival submissions and perused the material available on record including the case law relied upon. As far as the addition of Rs. 40,00,000/- on account of cash deposits is concerned, we find that the Ld. AO has accepted the books of account of the assessee and has not rejected the same. The net profit declared by the assessee has also been accepted. It is not in dispute that the cash sales are recorded in the books of account and are reflected in the GST returns filed by the assessee. The corresponding stock movement is also recorded in the stock register. The Ld. AO has not pointed out any defect either in the books of account, stock records, or GST returns. Once the cash sales are duly recorded in the books and the profit element thereof has already been subjected to tax, the cas....
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....ade out of the cash in hand as was available with it out of the cold storage rent receipts, but to the contrary, while framing the assessment had simultaneously subscribed to its claim by accepting the disclosed cold storage rent receipts out of which the cash deposits in question were claimed by the assessee to have been sourced. The A.O could not be allowed to blow hot and cold at the same time. If the assessee's claim that the cash deposits in question were made out of its duly disclosed cold storage rent receipts was not to be accepted, then, the A.O was obligated to have rejected the books of account of the assessee, for the reason, that by not doing so he had on the one hand held the cash deposits to have been sourced out of an unexplained source, while for at the same time by accepting its books of account had accepted its claim that the cash deposits in duly accounted bank accounts were sourced out of the duly disclosed source of the assessee firm. At this stage, it may be observed that the fact that the bank accounts in question in which the cash deposits were made by the assessee during the demonetization period formed part of its books of account can safely be gather....