9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 711 - AT - Income TaxUnexplained cash deposits during demonetization period u/s 69A - CIT-A deleted the addition - HELD THAT - In the present case it is not in dispute that the books of accounts maintained by the assessee in the regular course of its business were audited and accepted by the AO while framing the assessment through deep scrutiny under section 143(3) - AO did not point out any specific defect in the books of account maintained by the assessee, no inflated purchases or suppressed sales were found. In the instant case, even the Investigation Wing asked the assessee to furnish the details which were submitted, on those details, no adverse comment was made by the Investigation Wing. As also noticed that the assessee is having cash sales in all the years which is evident from page no. 4 of the impugned order passed by the Ld. CIT(A). For the year under consideration the assessee was having cash sales of Rs. 4,12,59,227/- out of total sale of Rs. 13,82,27,373/-, the cash sale was about 1/3rd of the total sales, similar was the position there in the preceding year. The assessee was also having cash realized from the debtors and it was not the case of the AO that the debtors of the assessee were bogus or those were not related to the business of the assesee. The cash deposited in the bank by the assessee during the demonetization period was out of the cash sales and the realization from the trade debtors duly shown in the book of accounts which were accepted by the A.O. In the present case, in the month of October 2016 and November 2016 the assessee was having cash sales of Rs. 1,04,97,098/- and Rs. 62,00,849/- which had not been doubted by the AO who had also not commented on the claim of the assessee that the balance of the amount which was deposited in the bank account was out of the realization of cash from the debtors which for the year under consideration was at Rs. 3,09,78,586/-. In the present case the AO accepted the trading results and had not doubted opening stock purchase sales and closing stock as well as GP rate shown by the assessee. Therefore, the additions made by the AO on the basis of surmises and conjectures was rightly deleted by the Ld. CIT(A). We do not see any valid ground to interfere with the detailed and logical findings given by the Ld. CIT(A) in the impugned order. - Decided in favour of assessee.
Issues Involved:
1. Deletion of addition made on account of unexplained cash deposits during the demonetization period under Section 69A of the Income Tax Act, 1961. 2. Acceptance of additional evidence by the CIT(A) without affording the Assessing Officer an opportunity to be heard, contrary to Rule 46A of the Income Tax Rules. 3. Validity of assessment framed under Section 153A of the Income Tax Act, 1961. Detailed Analysis: 1. Deletion of Addition Made on Account of Unexplained Cash Deposits During Demonetization Period Under Section 69A of the Income Tax Act, 1961: The primary issue revolves around the deletion of an addition of Rs. 97,50,000/- made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, 1961. The AO observed that the assessee had deposited demonetized currency amounting to Rs. 2,47,50,000/- in its bank account during the demonetization period. The AO estimated the sales of the assessee at Rs. 1,50,00,000/- and treated the excess cash deposit of Rs. 97,50,000/- as unexplained money, invoking Section 69A. The AO's rationale was based on the assumption that the assessee had introduced unaccounted money disguised as sales during the demonetization period. The assessee contended that the cash deposits were from regular business activities, specifically from cash sales and realization from debtors. The assessee provided detailed submissions, including financial data, cash book, and sales ledger, to substantiate the claim. The CIT(A) accepted the assessee's explanation, noting that the AO had accepted a substantial portion of the cash sales but had not provided a basis for rejecting the remaining amount. The CIT(A) emphasized that the AO had not pointed out any specific defect in the books of accounts, which were duly audited and not rejected under Section 145(3) of the Act. The CIT(A) concluded that the addition was made on surmises and conjectures, and deleted the addition of Rs. 97,50,000/-. 2. Acceptance of Additional Evidence by the CIT(A) Without Affording the Assessing Officer an Opportunity to be Heard, Contrary to Rule 46A of the Income Tax Rules: The Department raised the issue of the CIT(A) accepting additional evidence without providing the AO an opportunity to be heard, contrary to Rule 46A of the Income Tax Rules. The CIT(A) had considered the detailed submissions and evidence provided by the assessee, including the financial data, cash book, and sales ledger, which were not initially submitted to the AO. The CIT(A) found merit in the assessee's explanation and concluded that the cash deposits were from regular business activities. The CIT(A) directed the AO to furnish a factual report on the points raised by the assessee, to which the AO responded, confirming that the search and seizure action was conducted under Section 132(1) of the Act. 3. Validity of Assessment Framed Under Section 153A of the Income Tax Act, 1961: The assessee challenged the validity of the assessment framed under Section 153A, arguing that there was no search and seizure operation on the company, and the assessment was void-ab-initio. The AO confirmed that a search and seizure action was initiated under Section 132(1) of the Act, and the premises where the books of account/documents of the assessee were suspected to be found were searched. The AO provided copies of the Warrant of Authorization and Panchnama drawn during the search operation. The CIT(A) upheld the validity of the assessment under Section 153A, noting that the search action was conducted as per the law. Conclusion: The CIT(A) deleted the addition of Rs. 97,50,000/- made by the AO, concluding that the cash deposits were from regular business activities and were duly recorded in the books of accounts. The CIT(A) found that the AO had not provided a basis for rejecting the remaining amount of cash deposits and had made the addition on surmises and conjectures. The CIT(A) also upheld the validity of the assessment framed under Section 153A, confirming that the search and seizure action was conducted as per the law. The Department's appeal was dismissed, and the assessee's cross-objection was partly allowed.
|
