TaxTMI 
TaxTMI 
2026 (7) TMI 616
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....ssessing officer in taxing the addition by taking the rate @77.25% by attracting S. 115BBE instead of taxing as per normal tax slab. The addition if any that may be confirmed should be taxed as business income. 3. Even otherwise on the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in taxing the income u/s 115BBE @77.25% in a retroactive manner by applying the duly substituted S.115BBE inserted retrospectively instead of taxing it at 35.54% as per the old provisions of S.115BBE. 4. It is therefore prayed that the above addition made by the assessing officer and confirmed by the CIT(A) may please be deleted." 3. The assessee is engaged in the business of petrol pump of Indian Oil Corporation Ltd. under the name and style of Aastha Petroleum at Olpad. The assessee filed return of income on 30.10.2017 for the A.Y. 2017-18 thereby declaring total income at Rs. 19,25,940/-. The case of the assessee was selected for scrutiny and notice u/s 143(2) of the Income Tax Act, 1961 (in short "the Act") dated 21.09.2018 was issued and served upon the assessee. Notice u/s 142(1) of t....
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.... on purely cash basis only. The said cash receipts from the cash sales were duly deposited by the assessee into his bank accounts. The petrol pump of the assessee is located in Olpad area which is basically a rural area, the majority of customers of the assessee were agriculturist, transporters or a small scale business owners who generally are uneducated and not having any bank accounts. The majority of the customers were regular customers of the assessee and hence most of the sales transactions of the assessee happened through the relations/ references. The Ld. AR further submitted that the assessee had deposited cash amounting to Rs. 56,06,796/- during the period from 01.11.2016 to 08.11.2016 from 58 parties. The assessee had given name of all the 58 debtors in his reply to show cause notice dated 24.12.2019. The Ld. AR submitted that among the 58 parties, cash received from 35 parties were from the credit sales made for the period April, 2016 to October 2016. The table showing list of names of all 58 parties are as follows: Sr. No. Party's Name Amount 1 Akshra Aqua Farm 3,49,870.00 2 Nandlal Gadri 93,600.00 3 Oma Ram 1,58,050.00 4 Mahen....
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....ve 58 parties, majority of the parties were regular customers of the assessee who had purchased petrol and diesel on regular basis from the assessee and made payment in cash due to demonetization declared. The Ld. AR pointed out that there were not a single new or unknown party from whom the assessee had received cash during the period from 01.11.2016 to 08.11.2016. Moreover, the assessee had duly submitted a table showing total sales made into cash sales and credit sales for A.Y. 2017-18 and A.Y. 2016-17 in his reply dated 24.12.2019 to the show cause notice. The Ld. AR pointed out from the table that the total sales of the assessee consist of 70% -80% of credit sales and balance sales were made in cash. A.Y. 2017-18 Month Cash Credit Total Sales % of Credit Sales Apr 64,11,914 1,26,73,502 1,90,85,416 66.40 May 65,79,439 2,23,32,728 2,89,12,167 77.24 Jun 61,15,240 2,70,94,003 3,32,09,243 81.59 Jul 59,00,198 1,75,70,137 2,34,70,335 74.86 Aug 50,07,136 1,29,93,263 1,80,00,399 72.18 Sep 46,90,367 96,72,567 1,43,62,934 67.34 Oct 48,49,661 1,06,07,842 1,54,57,50....
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....ounts and audited financial statements of the assessee were duly accepted by the Assessing Officer for A.Y. 2017-18. Further, the books of accounts of the assessee was never subjected to scrutiny before A.Y. 2017-18. Hence, it is imprudent on the part of the Assessing Officer to make addition of the collection from the debtors when he has never asked any clarification with regards to the outstanding debtors of the previous year and year under consideration. Therefore, the Ld. AR submitted that when the Assessing Officer has not contested the debtors as on 31.03.2017, doubting on the part of realization from such debtors does not arise. Further, the assessee had also submitted quantitative details of opening, inward, outward and closing stock of petrol and diesel for A.Y. 2017-18 along with month wise summary details of cash collected from debtors with name, PAN and address details and monthly sales details of cash sales and credit sales for A.Y. 2017-18 with all the necessary explanations and documentary evidences during the course of assessment proceedings. The assessee had also made the cash deposits into his bank account purely from cash receipts from his debtors on account of c....
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....ing S. 115BBE instead of normal tax rate, the Ld. AR pointed out that Mr. Gautam Babulal Jain was engaged in the business of running a petrol pump under the dealership of Indian Oil Corporation Limited. During the assessment proceedings it was clearly shown that assessee had received cash amounting to Rs. 56,06,796/-before the demonetization period. The said deposition was attributed only from credit and cash sales made out its routine business and not from any other sources. The Assessing Officer failed to detect any defects in the cash book, bank book, purchase register or sales register produced and submitted before him for his verification. The Assessing Officer has failed to pin point any other source of generation of cash in the case of the assessee nor has rejected the assessee firm's audited financial statements. The learned assessing officer has totally accepted the quantitative details provided and certified by the chartered accountant in the audit report with regards to the said sales and purchase of the petrol and diesel. Accordingly, since the firm has not got any other source of income and has derived income only from the business u/s. 28 of the I. T. Act, 1961, t....