AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 828
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.... the CBDT. Accordingly, he pleaded that assessment framed consequently is invalid and void ab initio. In support, he placed reliance on the judgments delivered by Hon'ble ITAT Kolkata Bench in the case of Tera Unemployed Engineers Co-Operative Society Ltd. ITA No. 674/KOL/2024, A.Y. 2014-15 dated 06.05.2025 and Hon'ble ITAT Delhi bench in the case of Anita Garg ITA No. 4053/Del/2024, dated 30.07.2025. 3. Accordingly, the Ld. Counsel for the assessee pleaded that the assessment order passed by the AO may be quashed. 4. The Ld. DR on the other hand relied on the impugned order but he failed to rebut the contentions of the Ld. AR and furnish a contrary judgment on legal issue as regards to the defective notice u/s 143(2) of the Act. 5. We have heard the rival submissions and perused the material placed on record and case law cited before us. The Ld. Counsel for the assessee contended that the notice issued u/s 143(2) dated 12.09.2018, issued by the AO was in violation of CBDT instructions dated 23.06.2017 (APV Pg. No. 46 & 47), as it was not in specific format prescribed. This fact was not controverted by the Revenue before us. 6. The instruction issued by the CBDT, regard....
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....e AR further submitted that the assessee has also produced the bills and vouchers, books of accounts and other documentary evidences before the AO for verification of the transactions carried out by the assessee. However, the AO without giving any reasons, made an addition of Rs. 70,42,500/- u/s 69A and 43,34,000/- u/s 68 of the Act. The Ld. CIT(A) has summarily rejected the submissions of the assessee by observing that the sales registers and debtors realization submitted lack corroborative evidence providing cash receipt from customers and that the VAT records are however while acknowledging the VAT receipts but these do not conclusively proved that the amount deposited are free from suspicion, especially considering anomalous cash deposits during demonetization period. Likewise, he observes that VAT acceptance of derive over does not preclude scrutiny or addition under the Income Tax Act while sustaining the addition u/s 68 and 69 of the Act. 11. The ld. Counsel for the assessee had explained with evidence the cash received on sale of tractors and debtors etc. with the supporting documentary evidences before the AO. The AO had made general observation without pointing out any....
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....d made general observations without proper verification of the submissions filed by the appellant assessee during the course of assessment proceedings where some of the observations are contrary to the factual evidence available on record some contradictory observation made by the AO are briefly discussed here under: i. The Id AO had pointed out that the applicant had sold the tractor bearing Chassis & Engine No RKXB000039 on 22.10.2016. However, in registration certificate the Chassis & Engine No are same as recorded in sale bill but the date/year of model was reported 12/2016. It was explained that the appellant had obtained the delivery of such tractors from the company M/s Mahendra & Mahendra on 28.06.2016 and same was available in stock as evident from the bill of such company. Therefore, the allegation made by Id AO was contrary to evidences on record. Further also the bill issued by appellant is part of document while obtaining registration certificate by such party. ii. It is relevant to mention here that during the assessment proceeding the Id AO had directed the appellant to provide complete details and addresses of RTO Office where such tractor was regi....
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....re received through banking channel from the same customers during the period from 25.10.2016 to 08.11.2016 were treated as genuine but the cash received from them were questioned as bogus and un-explained money by AO without giving logical or rational reason for such observation. In our view, when the AO had accepted the sales and purchases declared by the appellant in its books of account as genuine then the payment received through cash on sale of tractors etc. are to be accepted as genuine. In the cases of the cash deposited during demonetization period, we are of the considered opinion that the addition made merely based on deviation in the ratio of cash sales and cash deposit to that of earlier period is not justified. 20. Hon'ble Delhi High Court in the case of Agson Global Pvt. Ltd. Vs. ACIT (2022) 325 CTR 001 held that addition made on sole ground of deviation in the ratio of cash sales and cash deposits during demonetization period as improper and unlawful. 21. In the present case, the VAT authorities had also accepted the declared purchases and sales of the applicants and that the sums so realised by the applicant has duly been credited in the cash book. The ledger....
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....ceived was not accepted is not justifiable. 25. From the record, it is clear that in the business of IOCL authorized dealership (petrol pump), the sales percentage, cash balance cannot remain uniform from year to year or month to month, as comparison mady by the Id AO for making addition on assumption and presumption basis. It is also noted that the allegation made by the AO is also in contravention to the instruction issued by the Board of Direct Taxes bearing No. 286/2/2003 IT(Inv) dated 10/03/2003 and disregarded the decision of Hon'ble Madras High Court in the case of CIT v/s S. Kader Khan Son reported in 300 ITR 157 (Mad) which was approved by the Hon'ble Supreme Court in the case of CIT v/s S. Kader Khan Son reported in 352 ITR 480 and CIT and V/s Vijay Nagindas Mehta Hon'ble Supreme Court Reported on 335 ITR (ST) 1, that the appellant firm is also assessed to tax with VAT authority. 26. We find that the sales and purchase made by appellant firm are duly disclosed before VAT authority and genuineness of such business activities had not been doubted by VAT authority, where the VAT authorities had accepted the purchase and sale as genuine. 27. In our view, ....