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TMI Blog2022 (10) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 01.06.2022 of the National Faceless Appeal Centre (NFAC), Delhi, relating to Assessment Year 2017-18. 2. The grounds raised by the assessee read as under:- 1. That the assessment order passed on 21.12.2019 as has been upheld by the Ld. CIT(A) vide order dated 01.06.2022, are perverse to the law and to the facts of the case, as such not tenable because of the non-issuance and service of notice u/s 143(2), as claimed to be issued and served. 2. That no proper and reasonable opportunity if any has ever been afforded prior to pass the order on 21.12.2019, as the appellant was required to file reply on 06.12.2019, with reference to the show cause notice issued on 03.12.2019 (within a span of 2 days only), which the Ld. CIT(A) has also failed to consider. 3. That the order passed on 21.12.2019 by the Assessing Officer as upheld by the Ld. CIT(A) was further incorrect as wrong under the law and to the facts of the case, because the Assessing Officer and CIT(A) have altogether failed to adjudicate the reply filed by the appellant on 06.12.2019 before the Assessing Officer. 4. That the order passed as upheld by the Ld. CIT(A) was further unconstitutional agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the cash appears to be deposited of Rs. 34 lakhs was further perverse to the law and to the facts of the case, because of not based upon any cogent material either collected or ever placed upon records having nexus to the lump sum additions made @ 30% thereupon, without taking into consideration that the appellant has already paid / deposited tax thereupon @ 22% u/s 44AD of the Income Tax Act, 1961. 10. That the enhancement of sale to the extent of Rs. 1,29,79,543/- is also illegal, against the law and to the facts of the case, as without the support of any material either collected or ever placed upon records in support thereto having any nexus to the extent of its enhancement thereof. 11. That the Assessing Officer has wrongly assumed his jurisdiction to complete the assessment of the appellant pertaining to the Assessment Year 2017-18 on an income of Rs. 32,67,670/- against the declared income of Rs. 22,47,670/-. 12. That the Ld. CIT(A) has dismissed the appeal of the appellant in a very casual and routine manner without taking into consideration the proper facts and relevant provisions of law and to the reply filed by the appellant before the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85/Del/2021 for AY 2017-18; and the decision of ITAT, Hyderabad, SMC Bench, in the case of Shri Lateef Abdul Mohd. Vs. ITO, dated 10.06.2022 in ITA No.501/Hyd/2021 for AY 2017-18, the ld. Counsel submitted that in the identical facts and circumstances of the case, the coordinate SMC Bench of the Tribunal has held that the addition in respect of the amount of cash deposited during post demonetization period is not sustainable when the nature of source of old currency note is fully supported and substantiated by the depositor assessee. 4. Replying to the above, the ld. Sr. DR, drawing our attention towards relevant part of the assessment order, submitted that the AO, after keeping in view the entire facts and circumstances and explanation of the assessee, rightly concluded that the assessee has booked concocted cash sales to adjust his undisclosed income during the demonetization period and concocted cash sales was booked through manipulation in the books of account and, therefore, it was found that the book results of the assessee were not reliable and the AO rejected the books of account u/s 145(3) of the Act by properly following the procedure and under the powers available to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.32,21,092/- in the months of 2016 in a week prior to demonetization period and the same trend has not been observed during the immediately preceding two financial periods. The AO also considered the percentage of cash sales during the financial period under consideration with immediately preceding two financial years and declined to accept the contention of the assessee. The AO also considered the overall monthly cash deposits during the present FY with immediately preceding two financial periods and noted that in the month of November, 2016 the assessee has booked cash sale of Rs.32,21,092/- which is quite abnormal and, thereafter, concluded that concocted cash sales have been booked by the assessee in November, 2016 to adjust his undisclosed income and cash deposit to his bank account during post demonetization period. The AO also concluded that concocted cash sales have been booked through manipulation of books of account and for this reason, the assessee rejected the books of account of the assessee invoking the provisions of section 145(3) of the Act. Finally, the AO adjudicated the issue with a finding that the addition of 30% of cash deposit to the bank account of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting much better results as compared to previous year but the AO despite this fact remained elusive and feigned of the fact and made the addition. 3. That the Ld.AO has alleged and concluded in para no.7 that assessee has booked concocted sales but failed to pin point any defect in the VAT returns and other relevant documents which were furnished to substantiating the Sales and deposits in the bank accounts. Thus the addition wholly is made on whimsical ground and is arbitrary and unlawful. 4. That the Ld. AO has mentioned in para 9 of the assessment order that the assessee has manipulated the books of accounts and therefore his books of accounts are rejected under section 145 of the Act. The observation of the AO proves that he has completely ignored the fact the assessee has declared his income under section 44AD which is filed in the cases where no books of accounts are maintained. Further, another mistake on the part of AO is that he never asked the books of accounts and rejection without pointing out any defect is another example of arbitrariness on the part of the AO. 5. That the Ld.AO has averted that the sales to Rs. 1,29,79,542/- but it is not comprehensib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..the assessment order passed by Ld AO is bad in law in making addition in respect of cash deposit in bank account as Unexplained other sources of income u/s 69 of the Inc.... 1,07,233 3. The Ld. CIT (A) erred in upholding the addition of Rs 650,000 for cash deposit in bank u/s 69 despite having proof of business of Kiryana items instead of...650,000 for cash deposit in bank when sufficient cash in hand shown by appellant by submitting proper cash flow statement, the onus was shifted to Id. CIT (A) to pinpoint any defector mistake for sustaining any addition. (vi) PCIT v. DLF Commercial Project Corporation. (2018) 100 taxmann.com 308/ (2019) 411 ITR716/ 260 Taxman 2 (Delhi) (HC)- Cash credits-Deposits from members of pubic-PAN numbers, address and particulars, relating to cheques were furnished-Assessing Officer has not carried out any further enquiry-Deletion of addition by the Tribunal was held to be justified. Dismissing the appeal of the revenue the Court held that, all relevant particular such as identity details relating to depositors, their PAN numbers, addresses, and particulars relating to cheques paid were furnished by the assessee, however the AO has not carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar source. 7.2 Ratio in the case of SumatiDatyal Vs CIT(SC) 214 ITR 801 are applicable in this case.The Hon ble Supreme Court in the case of Sumati Dayal Vs CIT [1995]214 ITR 801 (SC),held that this raises the question whether the apparent can be considered as real. As laid down by this Court, apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. The Hon ble Supreme Court in the case of C.I.T. Vs. P. Mohanakala held that We are unable to persuade ourselves to accept the submission. The findings of fact arrived at by the authorities below are based on proper appreciation of the facts and the material available on record and surrounding circumstances. The doubtful nature of the transaction and the manner in which the sums were found credited in the books of accounts maintained by the assessee has been duly taken into consideration by the authorities below. The transactions though apparent were held to be not real one. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the facts and circumstances of the present case are not similar and identical as, in the present case, I have to adjudicate the issue pertaining to the amount of cash deposit by the assessee to his bank account during the post demonetization period. In view of the findings arrived at by the AO in the peculiar facts and circumstances of the present case in para 6 of assessment order, I respectfully note that the benefit of ratio of the said judgement of the jurisdictional High Court of Delhi is not available for the assessee in the present case. 11. So far as the order of ITAT Delhi SMC Bench in the case of Atish Singla vs. ITO (supra) and the order of the ITAT, Hyderabad, SMC Bench, in the case of Shri Lateef Abdul Mohd. Vs. ITO (supra) are concerned, in the case of Atish Singla (supra), it was the claim of the assessee that the cash deposit to the bank account during post demonetization period was purely sale proceeds and partly realization from debtors for which complete details were filed before the AO as well as the ld. CIT(A), but, in the present case, it is not the argument of the assessee that the amount deposited to its bank account was partly realization from debtors. ..... 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