TaxTMI 
TaxTMI 
2025 (3) TMI 1753
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....s. 2. On the facts and circumstances of the case and in law the ld CIT(A) has erred in allowing assessee's appeal and ignoring the facts that in the bills, narration of goods sold by the assessee is mentioned as gold ornament (22/22 Ct.) only as well as the stock register/ details furnished by the assessee were not verifiable as the same was not prepared quality wise and item wise. 2.1 Apropos Ground of Appeal of the Department, it is noticed that the ld. CIT(A) has allowed the appeal of the assessee by deleting the addition of Rs. 5,40,00,000 made by the ld. AO on account of cash deposit during demonetization period. The narration as made by the ld. CIT(A) in his order is reproduced as under:- "5. Decision: I have carefully considered the facts of the case and submission filed by the appellant. 5.1 Since all the grounds are interlinked the same are adjudicated simultaneously The AO has made addition of Rs. 5,40,00,000/- for the reason that the cash deposited in the bank account during the period of demonetization While deciding this issue, the AO has observed that the assessee has manipulated the sales and also did not maintain stock register quantity....
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....change of opinion by the new incumbent it is a settled principle of law that change of opinion cannot be a ground to make addition in the hands of an assessee 5.3 The submission of the appellant was carefully perused and it is noticed that the AO has not pointed out any defect in the purchase and sales made as per books of accounts and merely rejected/disallowed the cash deposits made on 11.11.2016. If the purchase and sale details are accepted then there is no valid reason to reject the cash deposits made during demonetization period merely on the ground that of huge cash sales on single day Most importantly, discrepancy in sales figure was accepted by the appellant during the course of proceedings before the DDIT (Inv) and accordingly the appellant had declared an amount of Rs. 1,91,00,000/- under the PMGKY 2016. No other discrepancy was pointed out by the AO during the appeal proceedings and accordingly books was not rejected. Mere suspecting the amount of cash deposit into the bank account during the demonetization period cannot be basis of making addition under section 68 of the Act without rejecting the book result under section 68 of the Act. 5.4 Further, i....
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....ntral Circle Vs. HirapannaJewellers. Vishakhapatnam (supra) 5.7 Further, Hon'ble ITAT Vishakhapatnam in the case of ACIT vs Hirapannajewellers ITA No. 253/Viz/2020 vide order dt. 12.05.2021 wherein held as under 19. In view of the foregoing discussion and taking into consideration of all the facts and the circumstances of the case, we have no hesitation to hold that the cash receipts represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to effect the sales and we do not find any defect in the stock as well as the sales. Since the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or fax the same u/s 1158BE again. This view is also supported by the decision of Hon'ble Delhi High Court in the case of Kailash Jewellery House (Supra) and the Hon'ble Gujarat High Court in the case of Vishal Exports Overseas Ltd. (supra), Hence, we do not see any reason to interfere with the order of the Ld.CIT(A) and the same is upheld" 5.8 Furthermore, the Jurisdictional ITAT, Jaipur in the case of Mahesh Kum....
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.... invoice No. 82 to 158 of Bangaluru and 110 to 216 of Koklata outlets before AO which were of 28-10-2016 and these were earlier produced before Investigation Wing in FY 2016-17 i.e. after the sales were made and same were verified by the Investigation Wing also. This view of the Id. CIT(A) indicates that the assessee has maintained regular books of accounts, bills, vouchers and day to day stock register having complete quantitative details and said books of accounts are audited. The assessee vide submission dated 27-09-2019 had produced stock record during the course of hearing. The cash sales transactions are recorded in regular books of accounts and the sale are made out of stock in trade for which no adverse finding had been observed by the AO except for the change in the methodology in issuing bills as mentioned at page 7 to 8 of the assessment order. Further the Id. CIT(A) observed that the AO had treated the cash deposited in the bank during the demonetization period in demonetized currency as unexplained cash credit u/s 68 of the Act although the nature and source of the cash deposits being proceeds arising out of cash sales etc was evident from the entries in the audited bo....
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....y maintained by the assessee and the said cash deposited is duly supported by the entries passed in the books of account and part of the sale accepted by the AO in terms of these observations ground no 1 raised by the assessee is allowed" 5.9 In view of the above discussion made and case laws referred, addition of Rs. 5,40,00,000/- under section 68 of the Act on account of cash deposit made during demonetization period is hereby deleted. 5.10 Since, the issue has been decided in favour of the appellant, the second ground for levy of additional tax u/s. 115BBE become educative in nature. 6. In the result, appeal is allowed." 2.2 During the course of hearing, the ld. DR supported the order of the AO and submitted that the AO had rightly made addition of Rs. 5,40,00,000/- as unexplained cash credit u/s 68 of the Act and the order of the ld. CIT(A) should be quashed. To this effect, the ld. DR submitted following written submission. Brief Facts of the case: In the case, the assessee filed its Return of Income for the A.Y 2017-18 on 06.11.2017/-declaring total income at Rs. 27,14,340/- Subsequently, assessment was completed under section 1....
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....n the purview of the Act, Rules and clarifications issued by the Department of Revenue The Id CIT also relied upon the following decisions. 1. Hon'ble ITAT Chandigarh in the case of Kalanidhi Jewelers LLP vs. DCIT, ITA No.311/Chd/2021 vide order dated 25.03.2022 2. Hon'ble ITAT Delhi in the case of ACIT vs Delhi Spot Bullion Trading Co. Pvt. Ltd in ITA No. 1965/D/2021 vide order dated 23.04 2024 3. Hon'ble ITAT Vishakhapatnam in the case of ACIT vs. HirapannaJewellers, ITA No. 253/Viz/2020 vide order dated 12.05.2021 4. Jurisdictional ITAT, Jaipur in the case of Mahesh Kumar Gupta Vs. ACIT, Circle- 4, Jaipur vide ITA No. 149/JP/2022 vide order dated 23.03.2023. The decision of Id.CIT(A) is not acceptable for the following reasons: 1 The assessee has shown total sales of Rs. 5,99,10,883/- on 08.11.2016. 2 The demonetization was declared at 8.00PM and the 1000 & 500 rupee notes were legal tender till 8th November, 2016 to 23.59 3. Further, the assessee could not explain the sales made by it before 8.00 PM or after 8.00 PM on 08.11 2016. 4. The alleged purchasers must have taken some ....
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....f the id CIT(A) may be quashed.'' 2.3 On the other hand, the ld. AR supported the order of the ld. CIT(A) and reiterated the arguments as made before the ld. CIT(A). Ld. AR of the assessee also filed a detailed written submission supporting the view of the ld. CIT(A) and submitted submission on each ground taken by the revenue. 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee, a partnership firm is engaged in the business of manufacturing and trading of gold ornaments, diamond jewellery, silver articles bullion etc. The assessee firm for the year under consideration filed its return of income on 06-11-2017 declaring income of Rs. 27,13,340/-. It is noticed that the assessment u/s 143(3) of the Act was completed in the case of the assessee firm on 26-12-2019 wherein addition of Rs. 5,40,00,000/- was made towards cash deposited during demonetization period. The relevant observation as made by the AO in the assessment order is reproduced as under:- "3.9 Based on the above discussed facts, I hereby held cash deposits to the tune of Rs. 5,40,00,000/- as unexplained income of the assessee and ad....