AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 1472
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....e recorded the credits in its books, despite the tact that the credits remained unexplained in substance? 3. Whether the CIT(A) was correct in shifting the burden of proof onto the AO for making enquiries, ignoring the settled principle that the initial onus u/s. 69A lies on the assessee? 4. Whether reliance on audited accounts, without substantive verification of transactions, can be considered as sufficient explanation under law to delete the addition on account of excess bank credits? 5. The appellant craves to amend, modify, alter, add or forego any ground(s) of appeal at any time before and during the hearing of an appeal. 3. Brief facts of the case are that assessee filed the e-return of income on 7.10.2022 declaring total income at Rs. 14,56,070/-. The return was processed u/s. 143(1) of the Act. Thereafter, the case was selected for Scrutiny Assessment in accordance with the provisions of the Act. AO noted that sales and purchases shown in the profit and loss account was Rs. 51,77,11,860/- and Rs. 51,62,29516/- respectively whereas bank statement of HDFC A/c of the assessee in the name of proprietary concern M/s Tushar Rice Traders has total cr....
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....ings u/s. 274 r.w.s. .271AAC(1) of the IT Act. Ground of appeal no.5 is general in nature, not to be adjudicated upon. The above-mentioned grounds are adjudicated as below. 4.2 Ground of appeal nos.1 & 2: As per the assessment order, the appellant is an individual who is proprietor of firm M/s. Tushar Rice Traders. The appellant has e- filed her return of income on 7/10/2022 declaring total income of Rs. 14,56,070/-. The case was selected for scrutiny. During the assessment proceedings AO observed that sales and purchases shown in the P&L account of the appellant was Rs. 51,77,11,860/- and Rs. 51,62,29,516/- respectively whereas bank statement of HDFC A/c of the appellant in the name of Proprietary concern M/s. Tushar Rice Traders has total credits & debits of Rs. 64,65,25,184/- and Rs. 64,29,67,842/-respectively. Hence, AO asked the appellant to justify the excess credits and debits in the bank account compared to sales and purchases shown by the appellant in the P&L account with documentary evidences. However, the appellant stated that the variation was mainly due to advances made, expenses incurred, TDS etc. The appellant also submitted an annexure mentioning various sa....
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....nk credits and reported turnover which was submitted during the assessment proceedings. She further submitted that said reconciliation clearly demonstrates that the alleged difference is fully explainable and verifiable and also submitted ledger confirmation of the parties in the paper books which she had already submitted before the AO. She also submitted that the furnishing of ledger confirmations from the parties has substantiated the genuineness, nature of the transactions, source and creditworthiness of the source. The appellant further contended that as per the notification and provisions of section 12 of the CGST Act, 2017, such advances do not trigger liability to pay GST, nor are they reported as turnover in GST return unless the supply is executed. Therefore, appellant stated that credit entries in the bank account representing such advances cannot be equated to unreported sales or unaccounted money, as erroneously inferred by the AO. Further, the appellant contended that considering the facts of her case, invoking Sec. 69A of the IT Act was erroneous as all the transactions were recorded in the books of account duly maintained by her and explanation was fully offered to ....
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....ted as per the provisions of the GST Act. In view of the above facts, AO's observation holding the difference between bank receipts and sales receipts appear to be not justified and does not have any strength to support his contention that these receipts were unaccounted. Moving to the second question whether the difference in receipts reflected in books of account can be added u/s. 69A of the IT Act. Whatever the difference of receipts found by the AO of Rs. 12,88,13,324/- were duly reflected in the books of account and duly audited by the auditor as claimed by the appellant. However, it is not the case of the AO that these receipts were not accounted for by the appellant in the books of account. His only contention was that the appellant has not provided satisfactory explanation without going into the root of such transactions by making elaborate enquiries. Since the receipts were duly accounted for in the books of accounts, same cannot be treated as not recorded in the books of account if any maintained by the appellant for any source of income as required under the provisions of sec. 69A. Therefore, it can be rightly concluded that under the law, accounted entries in the bo....