TaxTMI 
TaxTMI 
2025 (4) TMI 2175
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 15.11.2016 as unexplained money in terms of Section 69A in the computation of taxable total income without assigning proper reasons and justification. 3. The NFAC, Delhi to appreciate that provisions of Section 69A r.w.s 115BBE of the Act had no application to the present facts and in circumstances of the case, there by vitiating the findings in relation there to. 4. The NFAC, Delhi failed to appreciate that the pre-requisite conditions required for making an addition in terms of Section 69A r.w.s 115BBE of the Act were absent in the present case and in circumstances, there by negating the findings in relation there to. 5. The NFAC, Delhi failed to appreciate that having not examined the books of accounts which were made available at every stage of proceedings, the presumption of unexplained money should be reckoned as wholly unjustified and not sustainable in law. 6. The NFAC, Delhi failed to appreciate that having not rejected the financial statements as faulty, the presumption of unexplained money within the scope of Section 69A from the disputed cash deposits was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee filed its return of income for the assessment year 2017-18 on 30.09.2017, admitting an income of Rs. 21,11,200/-. The return was processed u/s.143(1) of the Act and later selected for scrutiny assessment under CASS. Accordingly, notices u/s.143(2) and 142(1) of the Act were issued to the assessee calling for source for cash deposits made during demonetization period into various bank accounts in the form of Specified Bank Notes along with other documents in support of the return of income filed. In response to notices, the assessee filed the replies / documents through e-proceedings on 22.10.2019. During the assessment proceedings in support of the demonetization deposits the assessee submitted the sales ledger, cash book, detailed statement of cash received from customers from 01.11.2016 to 08.11.2016 and 09.11.2016 to 31.12.2016 separately on 01.12.2019. Later in response to show cause notice issued by the AO, the assessee submitted the reply on 26.12.2019 by providing the details of month wise cash sales and cash deposits made to the bank account from 01.04.2016 to 08.11.2016 and also cash deposits made from 09.11.2016 to 31.12.2016 i.e. demonetisation period. However, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed to in clauses (i) and (i), or any service, exceeds two hundred thousand rupees" vii. The above activity of the assessee clearly spelt that either the assessee's unaccounted money have been introduced and accommodated under bogus customer's name nor somebody's unaccounted money would have been introduced and accommodated under bogus customer's name during the period of demonetization for commission basis. Since all the cash sales bills were spiltted up and booked under bogus customers name or the identity of the customer who have purchased jewellery by exchanging old jewellery or by paying cheque or any other bank mode details have been used to conceal the assessee's unaccounted income nor the third party unaccounted money who's identity had not been revealed by way of collection of TCS on cash purchases more than the prescribed limit as per sec 206C(1D) of the IT Act 1961, the claim of the assessee could not be ascertained. Therefore, the claim of assessee is not found to be genuine regarding the sources of cash deposit made during the period of demonetization. Hence, on relying Upon the decision of Hon'ble Supreme Court in the case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uman Probability Test' could be applied when the Assessee makes the Officer to believe his/her story as a valid event. The false claims of the Assessee cannot sustain before the test of Human Probabilities. Hence, the total cash deposited Rs 4,57,18,500/- during the period of demonetization, as per system record information available with this office, is treated as unexplained and unaccounted money in the hands of the assessee u/s. 69A of the I.T. Act and taxed the same at maximum marginal rate invoking section 115BBE or the I.T. Act, by relying upon the decision of Hon'ble Supreme Court in the following cases as discussed under: The Hon'ble Supreme Court in the case of Smt Srilekha Baneriee and others Vs CIT, Bihar & Orissa, reported in 1964 AIR 697, dated 27/03/1963, the Hon'ble Court held that the source of money not having been satisfactorily proved, the Department was justified in holding it to be assessable income of the assessee from some undisclosed source. "The fact of the case are that the assessee had encashed 51 high denomination notes of Rs. 1,000/- each in January, 1946. The assessee's explanation in his application for e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the notes by the assessee by himself, it is necessary for the assessee to establish, if asked, what the source of that money was and to prove that it did not bear the nature of income. The department is not at this stage required to prove anything. The fact that there was receipt of money or conversion of notes is itself prima facie evidence against the assessee on which the Department can proceed in absence of good explanation.' Therefore, in the case of assessee where huge Cash was deposited in the bank accounts during the period of Demonetization (9^th November, 2016 to 30th December, 2016), but the sources were neither explained nor such money offered for taxation, the onus is on the assessee's' to prove that the Cash deposits made did not bear the character of income. Subject to above discussion, the total income of the assessee is assessed for the FY 2016-17 as under: Returned Income Rs. 21,11,199/- Add: unexplained income as discussed above in para 7 Rs. 4,57,18,500/- Assessed Income Rs. 4,78,29,699/- 9. Further, in respect of above said unexplained money Rs 4,57,18,500/-as discussed in para 7, penalty proceedings u/s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1.08.2024 by holding as under: "10. The appellant during the appellate proceedings submitted various judicial pronouncements wherein it has been held that the cash sales deposited in the bank account during the demonetization period cannot be treated as undisclosed income. These judicial pronouncements relied upon by the appellant is duly considered and it is found that the decisions referred by the appellant are with reference to those cases where the assessee has furnished all the details and supporting evidence to prove that the cash deposited during demonetization period are out of stock recorded in the books of accounts. Further, in the cases referred by the appellant, the assessee was able to establish the nexus of cash sales and deposits with supporting evidence. However, in the case of appellant, the appellant failed to submit the details of sales. With supporting evidence of purchase of stock, payments, etc. Hence the decisions relied upon by the appellant is factually distinguishable and is not applicable in the case of appellant. 11. As stated in earlier paras, during the demonetization period, the appellant had deposited cash amounting to Rs. 3,73,28,6....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., since the assessee has maintained proper books of accounts like Cash book, bank book, sales register, purchase register, stock registers, monthly VAT returns, Audit report in Form 3CA and 3CD, Audited financials have been furnished during the assessment as well as appellate proceedings. The Assessee also furnished the month wise cash sales and cash deposit for the impugned year (A.Y. 2017-18) along with sales register specifically for the months from Sep 2016 to Dec 2016, entire cash sales details from 01.11.2016 to 08.11.2016 apart from day wise summary for the same period. The assessee also furnished day wise cash sales and cash deposited from 11.09.2016 to 31.12.2016 separately apart from statement of cash collections from customers and cash deposited from 01.11.2016 to 08.11.2016. The AO has also observed that the assessee has not made TDS u/s.206C of the Act for the sales made of each sales invoices for value more than Rs. 2.00 Lakhs and Rs. 5.00 Lakhs per person on sale of bullions and jewellary respectively. In this regard, the ld.AR stated that the AO has not noticed any of the invoices exceeding the said limit and which is not liable for TDS u/s.206C of the Act. Further,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not rejected the books of accounts filed along with tax audit report of the assessee and not doubted the stock and purchases but with the assumption of impracticability of sales made on a particular days i.e. 01.11.2016 to 08.11.2016 as unexplained and brought to tax and also confirmed by the ld.CIT(A), which is against provisions of the Act. 6.4 Further, the ld.AR brought to our notice that the assessee had enough stock on hand of both gold and silver bullions apart from purchases made during the impugned assessment year (Page 15 to 26 of Paper Book-II). The ld.AR also stated that the assessee is having overdraft facility to the tune of Rs. 4.00 Crores against the inventory held by the assessee. The average stock held by the assessee during the impugned assessment year was around Rs. 4.75 to Rs. 5.00 Crores. Therefore, the sales made from 01.11.2016 is supported by the proper evidence of holding stock along with the purchases and hence the impugned addition made by the AO and the action of the ld.CIT(A) in confirming the same cannot be justified and prayed for setting aside the order of the ld.CIT(A) by allowing the appeal of the assessee. The Ld.AR took us through following....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers which was less than Rs. 2.00 lakhs per person and there was no requirement on the part of the assessee to obtain details like name, address and PAN of the buyers. In response to notice u/s.142(1) of the Act, the assessee had furnished cash book, sales register, purchase register, bank statements along with stock registers for the relevant period. The stock moved out of the books on account of sales made by the assessee has established from stock registers, which is supported by the proper books of accounts maintained which are subjected to tax audit u/s. 44AB of the Act. The assessee also submitted the month wise abstract of purchases, sales, invoice wise details from 01.11.2016 to 08.11.2016, cash deposited in the impugned year along with prior F.Y. 2015-16, the details of cash deposited from 01.11.2016 to 08.11.2016 and from 09.11.2016 to 30.11.2016. The VAT returns and annual audit report under TNVAT Act for the relevant period reflected such sales which have been accepted by the VAT authorities. These books of accounts, statements and other documents furnished by the assessee before the lower authorities, which have not been disputed nor rejected. The books of accounts of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ITAT - ITA No.1106/2023 3. 03.04.2024 DCIT vs ANS Jewellery - Chennai ITAT - ITA No.1151/2023 4. 05.04.2024 ITO vs Surabi Gold - Chennai ITAT - ITA No.372/2023 5. 05.04.2024 DCIT vs Navaratna Maaligai - Chennai ITAT - ITA No.801/2023 6. 05.04.2024 JCIT Vs. Tara Jewellery - Chennai ITAT - ITA No.276/2023 7. 10.04.2024 DCIT vs D Gem Mount - Chennai ITAT - ITA No.782/2023 8. 06.11.2024 KTM Maligai vs DCIT- Chennai ITAT - ITA No.1382/2024 9. 03.07.2024 M/s. RR Foods Pvt Ltd vs ITO - Chennai ITAT - ITA No.1359/2023 10. 26.07.2023 M/s. Micky Fireworks Industries vs ACIT - Chennai ITAT - ITA No.264/2023 11. 07.10.2024 Tamilnadu State Marketing Corporation Ltd ACIT - Chennai ITAT - ITA No.431/2023 8.2 Further, the coordinate bench decision in the case of DCIT vs ANS Jewellery in ITA No.1151/CHNY/2023 dated 03.04.2024 is applicable to the present case on hand, wherein the Tribunal held as under: "9. From the fact, it emerges that the assessee is dealing in precious metals. It transpired that the assessee deposited cash during demonetization period, the source of which was stated to be out of sales ....