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TMI Blog2023 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... urmises and conjectures. He ought to have brought on record any material evidence to hold the disputed cash sales as bogus sale. A.O has accepted the GP ratio of assessee declared @ 4.38%. AO suo-moto reduced the GP of 4.38%, out of disputed bogus sales which has been reduced from the returned income - A.O cannot blow hot and cold at the same time by partly rejecting the books of accounts and partly accepted the books of accounts, which is bad-in-law. If the AO rejected the books of accounts, then he can't rely on the same books of accounts for opening stock, closing stock, purchases, sundry debtors, sundry creditors, GP Ratio and expenses etc. etc., which are based on same books of accounts which have been accepted. It is settled law that the A.O cannot sit on the chair of the assessee to decide the sales, as per his choice to categorize into so called bogus sales and non-bogus sale The Visakhapatanam Tribunal in the case of ACIT Vs. Hirepanna Jewellers [ 2021 (5) TMI 447 - ITAT VISAKHAPATNAM] has observed that when no difference in stock register found, purchases, sales and the stock are inter linked and are inseparable. Every purchase increases the stock and ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decrease/rejection in recorded cash sales by Rs.1,35,43,034/- require increase in closing stock by RS. 1,35,43,034 - 5,93,185 = Rs. 1,29,49,849/- being all purchases, direct expenses, opening stock and closing stock i.e; outflow and inflow of stock has been accepted, thus Trading a/c became unbalanced and further tantamount to double addition by Rs. 1,29,49,849/. 3. That the Revenue due to dwindling mind wrongly; partly rejected and partly accepted the same books of accounts, hence adopted pick and choose method, blown hot and cold and is bad-in-law. 4. That the Revenue has suo-motto calculated cash sales of Rs. 1,35,43,034/- as unexplained income out of recorded cash sales in cash - book, on surmises and conjectures ,without bringing any tangible evidence on record and then wrongly applied section 69A and 115BBE on it by treating as unexplained income / As not recorded in books , whereas the source is fully explained and all entries are fully recorded in books of accounts and applications of said sections are bad-in-law. 5. That the Revenue has not brought on record any tangible evidence, indicating cash deposit is not out of cash sales/cash book and has some other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed books of account, Stock Register and all other record as mentioned in ground of appeal for verification to A.O and CIT(A) but no defect was ever pointed out by revenue and the said record is enclosed again for Hon'ble Bench's kind perusal, as per detail given in Paper book U/R 18 of Income Tax (Appellate Tribunal) Rules, 1963 at page 10 to 11. Proof of submissions of all documents along with synopsis to CIT(A) is also enclosed at page 365 to 375. 2) Revenue accepted the opening stock, closing stock, purchases, direct expenses, sundry debtors, sundry creditors, all VAT 15 returns and annual VAT 20 of the assessee and has not pinpointed any defect in any of the above said documents. 3) That Ld. A.O can't brush aside suo-motto statutory record of Sales-tax department like Vat-15 and vat-20 without pin pointing any defect in statutory records. 4) The Ld. A.O has calculated the said bogus sale on the basis of surmises and conjectures and he has not brought any evidence on record against the so called bogus sale and the addition is bad-in-law. 5) The Ld. A.O has suo-moto calculated the cash sales of Rs.1,35,43,034 as bogus sales, as per Para-3.7 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05-21 (ITAT, Visakhapatnam Bench) Copy enclosed at page to 386 to 403 (Refer Para -7, 7.1, 7.2, 8 and 9) C. Rationale - one cannot disallow bogus purchases and the same time treats the sale with same parties as genuine - the books of accounts are duly audited and no defect found, then no disallowance: PCIT vs. Agson Global Pvt. Ltd., ITA no. 68/2021, CM no. 93119/2021 dtd. 19-01-22, Delhi High Court. (Refer Para vi, vii, viii at internal page -34 and 35, Para-15.9 at internal page - 38, Para-17.3 to 17.6 at internal page - 45 to 47, conclusion at Para-19 at internal page -50 and 51 . Only relevant Paras, as mentioned are enclosed at Page 404 to 411 being order is very lengthy running into 53 pages) 6. The Ld. DR stands by the impugned order. However, he has not controverted the fact of cash sales and that of no discrepancy being pointed out by the revenue authorities in the books of account, sales, purchases and stock maintained by the appellant. 7. Heard the rival contentions and perused the material on record and case law cited before us. Admittedly, it is an undisputed fact that authorities below had accepted the opening stock, closin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per his business exigency and wisdom at any given time and no hypothesis can be applied by A.O just sitting on his chair . 10. The Visakhapatanam Tribunal in the case of ACIT Vs. Hirepanna Jewellers has observed that when no difference in stock register found, purchases, sales and the stock are inter linked and are inseparable. Every purchase increases the stock and every sale decreases the stock and all matching with inflow and outflow there is no reason to disbelieve the sales. 11. The Hon ble Delhi High Court in the case of PCIT vs. Agson Global Pvt. Ltd ,(Supra) hold the rationale that one cannot disallow bogus purchases and the same time treats the sale with same parties as genuine - the books of accounts are duly audited and no defect found, then no disallowance . 12. Considering the factual matrix of the case, we hold that the cash deposits in bank represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to affect the sales and we do not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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