TaxTMI 
TaxTMI 
2026 (5) TMI 223
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....at, the Assessee is a partnership firm carrying on its business of gold, silver and diamond jewellery on retail basis and also undertakes job work on behalf of customers. The Assessee filed return of income declaring income of Rs. 12,18,930/-. The case of the Assessee was selected under CASS. The Assessee had deposited cash of Rs. 1,43,97,000/- in the bank account during the demonization period. The Assessee was asked to giving source of cash deposit during the assessment proceedings. The assessment order came to be passed on 30/12/2019 by making addition of Rs. 1,43,97,000/- under Section 69A of the Act as the Assessee failed to give source of the said cash deposit made during the demonization period and also made addition of Rs. 1,16,195/....
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....ect in cash books, sales register or purchase register was pointed out by the A.O., therefore, submitted that the authorities below have committed grave error in making addition/confirming the same, thus sought for allowing the Appeal. 5. Per contra, the Ld. Departmental Representative submitted that the Assessee was not maintaining stock register which casts serious doubts on the linkage of sales with the deposits. Further contended that in trade involving article such as gold and diamond of business of stock records undermines reliability of sales figures. Further submitted that both the A.O. and the CIT(A) have rightly appreciated the facts and passed the respective orders, therefore, relying on the orders of the Lower Authorities sou....
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....t in Assessment Year 2016-17 to 2018-19. 8. In order to prove the genuineness of the sales, the Assessee produced documents such as sales register, purchase registers, VAT Returns, GST details and comparative trading and P & L account. The Assessee has also produced cash book. It is matter of record that the department has not rejected the books of accounts of the Assessee. However, addition has been made u/s 69A of the act. The provision of Section 69A of the Act applies where the Assessee is found to be the owner of money which is not recorded in the books of account and the Assessee either offers no explanation or the explanation offered is not satisfactory. Thus, the money found must be unrecorded/ undisclosed in books of the Assesse....
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....eady part of the book results, there is no avenue for the CIT(A) to reject such explanations. This expression "explanation is found not satisfactory to the AO" is purely relates to the money found with the assessee which are not recorded in the books of account. In this case, the above expression has no relevance since the assessee had already declared the cash sales in its books..." (Emphasis Supplied) 10. In the present case, the reason for making addition u/s 69A of the act that the Assessee did not maintain any stock register linking purchases with sales. As observed earlier, the books of account of the Assessee were never rejected u/s 145(3) of the Act and no specific defect in the cash book, sales register or purchase register w....
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....of account defective, particularly in the case of a retail jewellery, business dealing in numerous small and various items. The Hon'ble High Court of Delhi in the case of CIT v. Smt. Poonam Rani [2010] 326 ITR 223 (Delhi) held as under: - "...10.. In any case, no statutory provision under the Income-tax regime requiring the assessee to maintain the Daily Stock Register has been brought to our notice. Hence, even if no such register was being maintained by the assessee as is contended by the learned counsel for the appellant, that by itself does not lead to inference that it was not possible to deduce the true income of the assessee from the accounts maintained by her, nor the accounts can be said to be defective or incomplete f....