TaxTMI 
TaxTMI 
2026 (5) TMI 1829
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....venue in its counter affidavit contended that it was the duty incumbent upon the assessee to inform the Department about changing of his counsel and inform the valid address on which notices and communication etc. should be sent to the assessee. Since this was not done hence, delay should not be condoned. 4. That as rebuttal to this counter affidavit, the Ld. Counsel for the assessee submitted various medical prescriptions which covers the period when the order of the Ld. CIT(Appeals)/NFAC was passed till filing of appeal by the assessee and proves that during the said relevant period the assessee was not well physically. The Ld. Counsel submitted that since the assessee was not well as evident from medical prescriptions, hence he could not communicate to the Department regarding change of his counsel which resulted in the delay in filing this appeal. That on question put forth to the Ld. Sr. DR by the Bench whether this constitutes a reasonable cause for condonation of delay, the Ld. Sr. DR fairly conceded that due to ill health condition of the assessee as evident from prescriptions which definitely covers the time period when the Ld. CIT(Appeals)/NFAC had passed order till th....
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.... purchasers are mentioned without any address while in most of the invoices even the names of the purchasers are missing, even when the size of single sale bill ranges from Rs. 18,000/- to Rs. 20,000/-. Even the customers' copies of the bills were not given to them and the same were lying with the appellant. Therefore, the cash sales bills generated by the appellant during this period were only to artificially inflate its sales so as to generate sufficient balance of cash in hand to stage- manage the impugned cash deposits in bank account. iii. The average value of monthly sales from April, 2016 to October, 2016 comes of the Act only Rs. 26,00,000/- whereas the cash sales for the month of November, 2016 itself have been shown at Rs. 60.92 lakhs. iv. The availability of stock is not an evidence which can prove the genuineness of sale as the unexplained cash deposits made by the appellant in his bank account has made purchase of stock possible for him. v. When questioned about details of cash purchases, the appellant brushed it aside stating that it is not possible for a shopkeeper dealing in grocery items to maintain complete details of purchasing part....
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....0 1464642.00 01.11 to 08.11 651040.00 3069294.00 Total Sale 1423188.00 4533936.00 Increase in sale 3110748.00 Stock as on 08.11 4065882.27 4283972.32 iii. Further, the appellant has also given comparative analysis of cash deposited by him in his bank account during the concerned FY vis-a-vis FY 2015-16, demonstrating that cash deposited during the concerned year was lesser than the preceding FY in terms of percentage of turnover. The comparative figures in tabular form are reproduced hereunder: Account No. Total Cash deposited during FY 2016-17 Cash Deposited and 30.12.16 Old Currency between 09.11.16 New Currency Total Cash deposited during FY 2015-16 Cash deposit in Bank 32437300.00 2469500.00 3508000.00 27650000.00 Sale 36654926.00 30018918.50 Cash deposit %age of Sale 88.49 92.11 Therefore, the addition made by the AO was based only on estimation and not any realistic findings. 9. The Ld. CIT(Appeals)/ NFAC on these two additions has held and observed as follows: ....
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....ht on record anything to controvert these findings of the AO with respect to lacunae in his sales bills. The onus lies on the appellant to prove to the satisfaction of the Revenue about the nature and source of cash deposited by him in his bank account. As the appellant claims the source of said cash deposits to be his cash sales, he ought to produce relevant sales invoices which can be verified and therefore be acceptable as credible evidence in support of his claim. However, to the contrary, it is found that defective sales bills have been produced by the appellant that are non-verifiable as to their authenticity, and hence non-acceptable as evidence to prove the nature and source of cash deposited by him. The appellant has only relied upon circumstantial evidences in the form of comparative analysis of cash-in-hand available with him on various dates and cash deposited by him in his bank accounts as a ratio of his total sales, during the current year vis-à-vis during the preceding year. The genuineness of its alleged source of cash deposits, viz., cash sales, has left to be satisfactorily explained by the appellant. Under these circumstances, I do not find any reason to d....
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....ng to certain clerical mistakes and his books of accounts are duly audited u/s. 44AB of the Act. - 5.2.3 It is observed that Quarter 3 coincides with the period wherein the above discussed period - 01.11.2016 to 08.11.2016 - falls, and also the period wherein demonetization was announced by the Government of India. It has already been discussed above, as to how the cash sales bills produced by the appellant before the AO were infested with shortcomings therein. The AO has taken reference of the said discussions and has contended that 6 sales invoices as mentioned by the appellant to have been missed out of the original Q3 VAT return were all cash sales and have been shown to be dated 31.12.2016. During the course of the current appellate proceedings apart from mentioning that the Q3 VAT return was revised by the appellant due to some clerical mistakes, and that his books of accounts are duly audited, the appellant has not brought on record the relevant sales bill to substantiate the genuineness of the same and therefore to substantiate that the corresponding revision in the VAT return was also genuine. Under these circumstances, addition made by the AO stands confirmed and....
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....sales were fictitious solely because the entire bills and vouchers were not produced. It is known fact that the assessee is operating in mufassil town and every sale is made to the villagers and petty customers in the nearby areas, therefore, it may not have been possible to record entire sale transactions through sale bills but when corresponding purchases and stock has been explained before the Department, against which, no questions were asked and was accepted, in such scenario, sales made cannot be held to be false and fictitious. The Ld. CIT(Appeals)/NFAC had not conducted any independent inquiry also in terms with Section 250(4) & (6) of the Act against the submissions placed on record by the assessee. That when the Department has accepted the source of income of the assessee, that when the Department has not brought on record any undisclosed sources of income of the assessee, that when audited accounts of the assessee have been accepted by the Department, that when the Department has not doubted purchases and opening stock during the relevant year, in such scenario, it is not open for the Department to disbelieve sale figure generated by the assessee. Both the A.O and the Ld....
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....ts either from the perspective of the income tax or from the perspective of the sales tax. Some of the petty pan-walas also conducts their business in some carts/trolley and they are not available every time at one single place. These realities have also not been disputed by the department. The Department has not questioned the turnover of the assessee and also has accepted the business module conducted by the assessee. Books of accounts of the assessee has also been accepted by the department. When all these parameters have been fulfilled by the assessee, there cannot be any addition u/s. 69A of the Act treating the cash deposits in the bank account as unexplained money of the assessee. In view thereof, I set-aside the order of the Ld. CIT(Appeals)/NFAC and direct the A.O to delete the addition of Rs. 17,61,000/- from the hands of the assessee." Respectfully following the same parity of reasoning and in the similar set of facts and circumstances, the department is directed to delete the addition of Rs.2,29,500/- from the hands of the assessee. 4. As per the above terms the grounds of appeal raised by the assesse are allowed. 5. In the result, appeal of the ass....
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....CIT(Appeals)/NFAC had brought any reasoning for refuting the contention of the assessee that the said amount is as per revised VAT return. The Revenue had clubbed the first addition and on the same basis has upheld this addition also. As I have examined in the foregoing paras regarding genuineness of the business activities of the assessee, genuineness of sales a/w. increase of purchases and stocks which never was doubted by the Department and specifically regarding this issue, when it is on record that such amount of Rs. 2,32,186/- is a part of revised VAT return, therefore, addition of this amount also is arbitrary, bad in law and misplaced and the A.O is directed to delete the additions accordingly. I further observe that the additions have been made u/s. 68 of the Act which pertains to unexplained cash credit. But in this case, regarding both the additions, there is no trail of any evidence or enquiry by the Department regarding any loan transaction so to justify addition u/s. 68 of the Act as unexplained cash credit. The entire trail of examination is regarding the nature and source of cash deposits and since the addition has been made by the Department stating the said cash d....
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.... of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon'ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning incorrect and irrelevant charging section is not sustainable and valid being bad in law. Accordingly, grounds of assessee are allowed and AO is directed to delete the entire addition. 15. In the result, appeal of the assessee is allowed." 17. Similarly, in the decision of Hon'ble High Court of Allahabad in the case of Smt. Sarika Jain Vs. The Commissioner of Income Tax, Bareilly and Another, reported in (2018) 407 ITR 254 (All) which decision was referred to and applied in the earlier decision of the Co- ordinate Bench of Delhi (supra), the Hon'ble High Court of Allahabad held as follows: "In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income under Section 68 of the Act and not whether such an additi....