TaxTMI 
TaxTMI 
2026 (8) TMI 1820
X X X X Extracts X X X X
X X X X Extracts X X X X
....g grounds of appeal:- "1) The Learned CIT(A) erred in continuing 10% of the disallowance made by the AO on an estimated basis. The disallowance made without any cogent material, on an estimated basis without valid reasoning is bad in law and needs to be cancelled. 2) It is submitted that section 68 creates a statutory presumption- a fiction and the same needs to given a strict interpretation. It is submitted that under section 68, each & every entry (i.e. every cash credit) needs to be verified and explanation for each entry needs to be tested. It is further submitted that addition u/s. 68 cannot be made on notional basis. The Ld. CIT(A) failed to appreciate that, unlike a disallowance of expenditure, addition u/s. 68 cann....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the file of the learned JAO for de-novo assessment. 10) The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal and/or to lay the additional evidences at the time of hearing." The revenue has raised the following grounds of appeal:- "(i). "Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in restricting the addition to 10% of the cash deposits and thereby deleting the balance addition of Rs. 1,32, 13,580/- out of the total addition of Rs. 1,46,81,756/- made by the Assessing Officer u/s 68 of the Income-tax Act, 1961, without appreciating the fact that the assessee failed to furnish satisfactory supporting documentary evidence such as bank statem....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1,46,81,756/- in the assessee's account maintained with Janata Sahakari Bank Ltd. during FY 2017-18. On the basis of the said information, proceedings u/s. 148A were initiated. 2.1. In response to the notice u/s. 148A(b), the assessee submitted that it was a pharmaceutical wholesaler/stockist supplying medicines to a large number of retailers in the Konkan region and that the cash deposits represented collections from customers against sales already recorded in the books of account. It was submitted that the total sales during the year were approximately Rs. 17.27 crore, out of which cash collections amounted to approximately Rs. 1.94 crore, the balance having been realised through banking channels. The assessee also stated that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... total income at Rs. 2,06,57,166/-, as against the returned income of Rs. 59,75,410/-. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). 3. Before the Ld.CIT(A), the assessee challenged, inter alia, the validity of the reassessment proceedings, the action of the Ld.AO in completing the assessment without considering its request for adjournment and video-conferencing hearing, and the addition of Rs. 1,46,81,756/- u/s. 68. It was contended that, the cash deposits represented realisation of recorded sales and that the same could not be brought to tax again as unexplained cash. 3.1. The Ld.CIT(A), after considering the assessment records and submissions of the assessee, noted that the assessee wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the assessee as well as the revenue are in appeal before the Tribunal. 4. We have considered the rival submissions and perused the material available on record. The Revenue is aggrieved by the action of the Ld. CIT(A) in restricting the addition of Rs.1,46,81,756/- made by the Ld. AO under section 68 of the Act to 10% thereof, whereas the assessee is aggrieved by the sustenance of the addition to the extent of Rs.14,68,176/-. 5. It is noted that the assessee was carrying on an established business and the sales recorded in its books have been accepted by the Revenue. The relevant bank accounts were also disclosed in the audited financial statements. The Ld. CIT(A), after examining the assessment records and the material furnished by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ground raised by the assessee seeking deletion of the addition sustained by the Ld.CIT(A) is also dismissed. 5.4. We further find it necessary to deal with the applicability of section 115BBE to the amount sustained. Section 115BBE prescribes a special rate of tax in respect of income referred to, inter alia, in Section 68. However, the mere fact that an addition has been sustained on an estimated basis does not, by itself, establish that the amount so sustained represents income of the nature contemplated u/s 68 of the Act. 5.5. In the present case, the finding of the Ld.CIT(A), which we have affirmed hereinabove, is that the assessee was carrying on an established business, the sales recorded in the books were accepted and the Ld.AO....