TaxTMI 
TaxTMI 
2026 (6) TMI 211
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.... A.Y. 2017-18. 2. The Department has raised the following grounds of appeal: "1. Whether on the facts and circumstances of the case and in law, the ld.CIT(A) has erred in deleting addition made of Rs. 2,35,35,000/-, u/s 69A and taxed u/s 115BBE of the Act, without appreciating the fact that the assessee has made cash deposits amounting to Rs. 2,35,35,000/-, without providing details of cash sales proving that the assessee has just shown the bogus cash sales to justify the cash deposit made during the demonetization period? 2. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. 3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of t....
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.... 4. During the assessment proceedings, the Assessing Officer issued several notices calling for details such as purchase registers, sales registers, stock statements, cash book, bank statements, party confirmations, promotional offer documents and other supporting records. The assessee furnished the details called for and also uploaded various documentary evidences on the income tax portal. However, the Assessing Officer was not satisfied with the explanation furnished by the assessee. According to the Assessing Officer, the assessee had shown abnormal cash sales during the demonetisation period and many sales invoices did not contain complete details of customers. The Assessing Officer further doubted the genuineness of the sales by obse....
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....ance on judicial precedents viz. CIT v. Om Overseas (315 ITR 185), CIT v. Poonam Rani (326 ITR 223) and St. Teresa's Oil Mills v. State of Kerala (76 ITR 365) for the proposition that suspicion cannot substitute evidence. 6. The CIT(Appeals) further observed that the assessee had duly explained that the cash deposits were from sale proceeds already recorded in the books of account. Sales invoices, ledger extracts, stock registers, reconciled bank statements and quantitative details were furnished before the Assessing Officer. The CIT(Appeals) observed that the Assessing Officer had not disproved any of these records nor brought any material on record to establish that the sales were bogus. The CIT(Appeals) held that that once sales are r....
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.... nothing abnormal in such transactions. The CIT(Appeals) placed reliance on CIT v. Daulat Ram Rawatmull (87 ITR 349) and CIT v. Nangalia Fabrics Pvt. Ltd. to hold that once the assessee discharges the initial burden by furnishing supporting records, the onus shifts upon the Revenue to disprove the transactions. 8. The CIT(Appeals) also accepted the explanation regarding increase in sales during October and November 2016 on account of promotional schemes, anniversary offers and festive demand. The CIT(Appeals) held that such increase in sales was duly corroborated by sales registers, stock records and bank deposits and no contrary material was brought by the Assessing Officer. The contention of the Assessing Officer regarding absence of c....
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....ve details of stock movement. The Assessing Officer has not pointed out any discrepancy in the quantitative tally of stock nor has he established that the purchases or sales recorded by the assessee were fictitious. Even the trading results and audited financial statements of the assessee have substantially been accepted by the Assessing Officer. Once the sales are recorded in the regular books and corresponding profit element has already been offered to tax, the entire sale proceeds cannot again be treated as unexplained money under section 69A of the Act. 12. We further find that the CIT(Appeals) has rightly observed that the rejection of books of account under section 145(3) of the Act was made merely on suspicion without identifying ....