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TMI Blog2023 (4) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... identified by AO. To make it more clear, 25% of addition is treated as profit of the assessee qua the alleged unidentifiable sales. In the result, ground of the appeal is partly allowed. Addition u/s 115BBE - As directed the assessing officer to taxed the profit element only. The addition which is sustained to that extent be treated on account of business income and be taxed under normal provisions of the Act. Hence, ground No. 4 of the appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... he genuineness of such cash transaction or sales. On further verification comparative chart of sales, the Assessing Officer noted that in the month of October, 2016, sales of Rs.25,19,253/-, which is more than double as compared to any of the current year's months' sales figures as well as in the immediate preceding year's months. In November, 2016, the sales were reported at Rs.14,04,098/-, which was very high in comparison the sale of preceding year. The assessee explained that due to festival occasion of Navaratri and Deepawali, sales were increased. On verification and comparison of month-wise sales of immediate previous year, no such increase in sales were found. The Assessing Officer asked the assessee to provide the list of customers with their names and addresses. The assessing officer noted that no such details were furnished by assessee. The Assessing Officer after making comparison of sales of October and November 2015, with the current year's moth of October and November 2016 found that sale report by assessee is not in line with earlier year sales and there was excess sale of Rs.14,61,332/- and Rs.3,46,177/- aggregating to Rs.18,07,500/-. The assessee claimed to have s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown sales of Rs.25,19,253/-, which is considerable high but no cogent reason for jumping of such sales just before pre-demonetization period. Therefore, the aggregate of excess sales of Rs.18,07,500/- to unidentifiable persons were treated as unexplained cash credits and added to the income of assessee and taxed under section 115BBE of the Act. The Assessing Officer passed assessment order under section 144 r.w.s. 143(3) of the Act on 30.12.2019. 5. Aggrieved of the additions the assessee filed appeal before Ld. CIT(A). The case of assessee migrated before NFAC/Ld. CIT(A). Before NFAC/Ld. CIT(A) assessee filed detailed written submission and said submission of assessee recorded in pages 11 to 24 of the order of NFAC/Ld. CIT(A). In the submission, it is noted that assessee maintains its books of account as per statutory requirement and are regularly audited under section 44AB. During the assessment, the assessee-firm furnished complete details through various submissions including copy of cash book, bank book, daily stock register, details of sale for the month of September to November, 2016, details of purchase for the month of September to November 2016, confirmation of purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has given sufficient reasons and made addition of Rs.18,07,500/- on the issue of taxing the addition under section 115BBE of the Act. The NFAC/Ld. CIT(A) held that Section 115BBE is applicable from 01.04.2017. Hence, tax rate prescribed under section 115BBE will be applicable. Further aggrieved, the assessee has filed present appeal before the Tribunal. 7. I have heard the submission of Ld. Authorized Representative (Ld.AR) for the assessee and learned Senior Departmental Representative (ld. Sr DR) for the Revenue. The Ld. AR for the assessee submits that during the year under consideration, the assessee disclosed gross profit of Rs.26,65,677/- at a profit margin of 26.95% of total turnover of Rs.98,92,855/- in the earlier year, there is a slight fall in the gross profit ratio though turnover was increased during the assessment. The assessee furnished complete details as required by Assessing Officer. In the sale bills, the name of persons and complete address were written. The Assessing Officer wrongly held that sales were made to unidentified persons but no independent inquiry was done by Assessing Officer from those customers to whom sales were made. On the sales were made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills vs. CIT (1974) 97 ITR 258 (Pat) * Gur Prasad Hari Das vs. CIT (1963) 47 ITR 634 (All) * Kanpur Steel Co. Ltd. vs. CIT (1957) 32 ITR 56 (All) * Sri Sri Nilkantha Narayan Singh vs. CIT (1951) 20 ITR 8 (Pat) * CIT vs. Kulvant Rai 291 ITR 36 (Del) * Atish Singla Vs Income Tax Officer [ITA No.1185/Del/2021 dated 06.04.2022 * Agson Global Pvt. Ltd. vs. ACIT 115 taxmann.com 342 (Del.Trib) * Asst. Commissioner of Income-tax Vs M/s Hirapanna Jewellers [ITA No.253/Viz/2020 dated 12.05.2021] [128 taxmann.com 291 (Viz.Trib.) 9. On taxing such addition under 115BBE, the Ld. AR for the assessee submits that assessee is doing business of gold & silver ornaments and assessee has no other source of income and assessee-firm has always earned business income only, and has always shown returned income from business under section 28 of the Act. The amount deposited in bank account of assessee is required to be considered as business income and there is no question of presuming to have any other source of income and Section 115BBE of the Act cannot be applied on such addition. Ld. AR for the assessee further submits that amendment made in Section 115BBE is not applicable in assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee as the sales could not be verified. Before me, the ld. AR for the assessee vehemently argued that the assessee provided complete details of the purchaser and their bills, the address and phone numbers were also mentioned on such bills, the assessing officer or by ld. CIT(A) has not made any investigation of facts. It was also vehemently submitted that all the sales were supported with documentary evidence and turnover of assessee matched with the turnover disclosed to the VAT Department and assessee had duly paid VAT @ 1% on the turnover disclosed and sales cannot be disturbed by Assessing Officer unless it does not match with the turnover disclosed before VAT Department. Though, I find merit in the submissions of ld AR for the assessee that no investigation of facts was carried out by the assessing officer or by ld CIT(A) about the details provided by the assessee. However, fact remained the same that abnormal sales in the month of October 2016 created doubt in the mind of lower authorities. The explanation of assessee about exceptional jump in the sales particularly in cash sales was that market is governed by various factors like agriculture sales, festivals and marriage ..... X X X X Extracts X X X X X X X X Extracts X X X X
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