TaxTMI 
TaxTMI 
2025 (2) TMI 1726
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....143(2) was issued on 09.08.2018 which was duly served upon the Assessee. The case was however, transferred to ld. Assessing Officer from ITO Ward 5(2), Chandigarh on 28.8.2018. Thereafter statutory noticed u/s. 143(2) was issued on 24.9.2018which was duly served upon the Assessee. 2.4 That Notice u/s. 142(1) along with the questionnaire was issued on 27.08.2019 to file reply electronically in 'e-proceedings' facility by 25.09.2019. Partial reply was submitted on 13.09.2019. Subsequently, notices under section 142(1) of the Act were issued to the assessee on 23.09.2019, 16.12.2019, 17.12.2019, 20.12.2019 and 21.12.2019. In response, the assessee filed submissions in e-portal from time to time, which have been examined and placed on record. 2.5 During the period under consideration the Assessee was engaged in the business of trading of jewellery. After due examination of submissions filed by the Assessee and inquires the ld. A.O. made the following assessment which are detailed as under:- 2.6 Unexplained money post demonetization: That during the post demonetization period i.e. from 9.11.2016 to 30.12.2016 from the bank account statement of the Assessee it has bee....
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....pecially during the months of October & November) reveals that during F.Y. 2016-17, the monthly average of cash sale from April, 2016 to September, 2016 comes to Rs. 12,00,160/- where as the cash sales during October, 2016 & November, 2016 stood at Rs. 28,41,780/- & Rs. 46,45,413 respectively. If October's cash sale spike may be attributed to the festival season, the abnormal cash sale of November, 2016 presents no credible explanation. (2) Further, if comparison of cash sale made from < 1.10.2015 to 08.11.2015 and cash sale made from 01.10.2016 to 08.11.2016 is made then it is seen that the cash sale made during the same period in 2016 registered a growth of 337% (it increased from Rs. 16,60,710/- to Rs. 72,56,603/-) which is abnormal given the fact that total cash sale during F.Y 2016-17 registered an increase of only 44.8% (the cash sale during F.Y. 2016-17 registered a growth of only 4.5% during the period from 01.10.2015 to 8.11.2016. (3) The above analysis clearly shows that the cash sales made from 01.10.2016 to 08.11.2016 have been inflated only to justify the cash deposit of Rs. 57,20,000/- made during demonetization period. (4) In view of ab....
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.... total sum of opening cash in hand as on 01.10.2016 and genuine cash sales as worked out above comes to Rs. 18,70,445/-. Thus, the genuine cash in hand at the end of October'2016 comes at Rs. 5,50,445/- . iii). By applying the same criterion, the acceptable cash sales for the period from 01.11.2016 to 08.11.2016 comes at Rs. 4,57,093/- (assessee showed cash sales of Rs. 4,37,410/- during the period from 01.11.2015 to 08.11.2015). Further, in order to give maximum benefit to the assessee considering the unprecedented demonetization circumstances and in order to be judicious and fair to the assessee and considering the nature of business of the assessee it is further accepted that on 08.11.2016 at night after the announcement of demonetization cash sales increased significantly, thus further cash sales booked on 08.11.2016 amounting to Rs. 2,00,000/- are also accepted on lump sum basis. Thus, the unacceptable cash sales made from 01.11.2016 to 08.11.2016 comes at Rs. 37,57,730/- (assessee claimed cash sales of Rs. 44,14,823/- during this period). The cash deposited by the assessee during the period from 01.11.2016 to 08.11.2016 was Rs. 4,70,000/-. 2.10 In light of above ....
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....hearing 3.1 The hearing in the matter took place before this Tribunal on 17.1.22024 when ld. AR for and on behalf of the Assessee appeared before us and the ld. DR for and on behalf of Revenue. Both of them were heard at length in respect of their respective submissions. The ld. AR has placed on record of this Tribunal a paper book containing pages 1 to 250 and a set of judgement in the form of compilation from pages1 to 99 and same were taken on record. The sheet anchor of the argument of ld. AR against addition of Rs. 53,21,162/- was that the Assessee's books of account have not been rejected by the ld. A.O., all bills were produced during the course of assessment proceedings, these bills are not held to be bogus or fictitious. Upon sales the sales Tax / VAT returns are filed. All these material documents have not been just considered and addition has been made erroneously. The addition has been made on the basis of assumption and presumption. It is well settled that no addition can be made on basis of assumption and presumption conjectures, surmise's etc. In order to made addition, there must be some credible material. In the instant case, no such thing is available on record....
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....The money is recorded in books of account with in the meaning u/s. 69A, the Assessee has offered an explanation hence addition is unjustified. 4.5 We hold that Department has failed to bring any material evidence prejudicial to the Assessee, therefore, findings u/s. 69A r.w.s. 115BBE is not sustainable as initial burden of proof that cash amount is towards sale of jewellery which was duly accounted in books of account of the Assessee stands discharged. Further books of account has not been even tainted as not properly maintained in accordance with law. Needless to state the books of account in law means asper Section 2(12A) as books or book of account includes ledgers, daybook, cash books, account books and other books whether kept in the written form or in electronic form or in Digital form or in floppy disk, tape or any other form of electro magnetic data storage devises. In the present case only on the basis of assumption and presumptions, Department has fastened the liability of tax u/s. 69A r.w.s. 115BBE without pointing out any lacuna in the books of account of Assessee. The only lacuna they have pointed out is cash deposit. Be that as it may, cash deposit are regularly de....
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....nd claimed that same arose out of cash sales of jewellery, since other wing of government had already accepted sale transaction under VAT and books of account of the Assessee were accepted by A.O., the said deposits could not be unexplained cash. Even in 102 ITR (T) 228 (Amritsar Tribunal) in the case of Balwinder Kumar vs. ITO, it is held that where Assessee deposited cash sales made during demonization period in his bank account and admitted such sales as Revenue receipts, since books of account of Assessee clearly reflected sufficient stock to affect such sales and same were accepted by the Revenue authorities, there was no basis for making additions under section 69A treating said deposit to be unexplained /bogus. 4.6 (iii) Basis above judicial pronouncements we are too of the considered view that in the instant case material documents were placed on record and no lacuna have been found in it by lower authorities basis which it can safely be concluded that cash stands unexplained. In order to treat cash stands as unexplained real time evidences should be available with the Revenue and in the absence of the same it cannot be said in law that cash stands unexplained u/s. 69A. ....
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.... Bench of the Tribunal in the case of 'Madan Lal Aggarwal HUF vs. DCIT' (supra), the relevant part of the order is reproduced as under: "11. It was further submitted that a complete set of books of accounts were maintained and audited by a Chartered Accountant and these books are not rejected by AO but at the same time, part of the sales were held to be bogus and cash received against such sales added as Income u/s. 68 ignoring that sales has already been declared as income by assessee. It was submitted that post deposit of cash, a survey was conducted to verify the deposit on 21-3-2017 and following undisputed facts are as per records: a. no evidence of any back dating of Sales were found. b. No difference in stock was found. c. There was sufficient stock available with assessee to make the sales. d. Assessee was regular in filing VAT returns and the same were never revised. e. If cash sales of Rs. 18,41,619/- is bogus then such stock must have been found in excess on the date of survey at the business premises. f. Further, VAT @ 12% is paid to Government on such sales. The regulatory authority i.e Sales Tax department....
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....61 such notes in the cash balance in their hands on 12th January, 1946, and then it applied a rule of the thumb treating 31 out of such 61 notes as within the bounds of possibility, excluding 30 such notes as not covered by the explanation of the appellants. This was pure surmise and had no basis in the evidence, which was on the record of the proceedings. To put the matter in a nut-shell, the accounts of the appellant have been accepted by the Tribunal as genuine, and it is impossible to say, having regard to the cash balance as shown therein, that the notes in question could not have been included therein. The Tribunal observes that it is unlikely that so many high denomination notes would have been held as part of the cash on hand for a such a large number of days. That, no doubt, is highly suspicious; but the decision of the Tribunal must rest not on suspicion but on legal testimony. 11.4 Our attention was further invited to the following decision of Coordinate Bench Chandigarh & a few others where under similar circumstances cash deposited during demonetization out of cash sales without rejection of books of accounts was held not justified: a. [2....
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....ing the months of October and November, 2016 are considerably higher than the respective months of F.Y. 2015-16 and F.Y. 2014-15. The onus to substantiate the cash sales was on the appellant which it has failed to discharge both during the assessment and appellate proceedings. The appellant has failed to furnish documentary evidence sought during the appellate proceedings thereby failing to establish genuineness of the cash sales and therefore, has failed to explain source and nature of such cash deposits in the bank account/ books of accounts. In view of the fact that the cash sales made by the appellant could not be verified and the genuineness of the same could not be established during the assessment as well as appellate proceedings, the addition made by the AO is justified and the same is hereby sustained. After going through the facts of the case it has been observed that unexplained cash sales is deemed income u/s. 68 of the Act as the appellant could not establish the genuineness of the same and the income assessed u/s. 68 is liable to be taxed as per the provisions of section 115BBE of the Act. Therefore, this case falls squarely under the ambit of section 115BBE of the Ac....