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TMI Blog2023 (4) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... no documents in the shape of bills etc. containing complete details of the alleged purchases who allegedly purchased jewellery in cash has been placed on record. Bench has also considered the citations referred by the assessee but the same are not found applicable in the case of the assessee on factual aspect. Bench does not find merit in the submissions of the assessee and find no infirmity in the order of the ld. CIT(A) which is sustained. Thus the appeal of the assessee is dismissed. - ITA No. 157/JP/2022 - - - Dated:- 8-2-2023 - Hon ble Shri Sandeep Gosain, Judicial Member For the Assessee : Shri P.C. Parwal, CA For the Revenue : Mrs. Monisha Choudhary, JCIT ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 21-03-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2017-18 wherein the assessee has raised the following grounds of appeal. 1. The ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.33,98,989/- u/s 69A of the Act by treating the cash deposit to this extent as unexplained income of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Total VAT Receipt in cash F.Y. 2015-16 0 (b) (i) Total cash sale from 01-04-2015 to 08-11-2015 0 (ii) Total VAT Receipt cash from 01-04-2015 to 08-11-2015 0 (c) (i) Total cash sale from 09-11-2015 to 31-12-2015 0 (ii) Total VAT Receipt in cash from 09-11-2015 to 31-12-2015 0 (a) (i) Total cash sale in F.Y. 2016-17 4350638 4394147 (ii) Total VAT Receipt in cash in F.Y. 2016-17 43509 2(b) (i) Total cash sale from 04-01-2016 to 8-11-2016 4324349 4367595 (ii) Total VAT receipt in cash from 01-04-2-15 to 8-11-2015 43246 (i) Total cash sale from 09-11-2016 to sd31-12-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,978.00 from M/s Nakshatra Brand, Mumbai. But there seems to be hardly any sale which was commensurate with the purchase. According to the AO, total sales for the whole year was Rs.62,66,499/- Out of that total sales, assessee had claimed that there was sales to the tune of Rs.33,98,989/- on the night of 08.11.2016. Therefore, it is seen that for the rest 364 days of the year, there was sales of Rs.28,67,510/-. That gives total daily average sale of Rs.7,856/- for the rest of the year. Considering this aspect of the matter, it can by no means be said that assessee, at that point of time, was a reputed jewellery dealer of Jaipur. If assessee was not such a reputed dealer, it cannot be understood as to how people suddenly flocked there to make purchase of more than Rs.30 lakh in few hours of time. Demonetised currencies could have been used by people in other reputed jewellery shops available in Jaipur. People were given opportunities to deposit the demonetized currency even in banks in the coming months after demonetization. It is just beyond the pale of human probability that a jewellery dealer having average daily sale of less than Rs.10,000/- should attract so many customers whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to give relief per para 4.3.2 of this order. 2.3 Now before us, the ld. AR has filed the written submission in respect of both the grounds which are reproduced as under:- Ground No. 1. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs.33,98,989/- u/s 69A of the Act by treating the cash deposit to this extent as unexplained income of the assessee. Submission:- 1. The various observations/ allegations made by the lower authorities to consider the cash deposit of Rs.33,98,989/- in the bank account out of sale of jewellery made by the assessee on 08.11.2016 as undisclosed income are incorrect as explained hereunder:- a. AO observed that assessee did not furnish any documentary evidence in support of transportation of jewellery during purchase ignoring that jewellery of Rs.4,01,50,530/- (4,86,30,978- Debit Note of Rs.85,25,488/-) (PB 4) lying in the shop of assessee in which M/s Nakshatra Brands Ltd. was conducting its business was transferred by it against the security deposit of Rs.4 cr. (PB 3) and thus, there is no transportation cost involved. In any case it has no relevance with the sales made on 08.11.2016. b. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout bringing any material on record that purchase sales are not genuine cannot be viewed against the assessee more particularly when sales declared is accepted and no evidence is brought on record that such sale is not a genuine sale. Thus, the various observation made by the lower authorities by not accepting the cash sales made on 08.11.2016 are on surmises conjectures and therefore, such cash sales cannot be considered to be introduction of on money through a concocted story. 2. It is submitted that in the course of assessment proceedings assessee has furnished the complete purchase ledger, sales ledger, purchase sales invoice, stock details and VAT returns as listed at Pg 9 of the CIT(A) order. In the details so furnished no discrepancy as such is found except presuming the cash sales made on 08.11.2016 as non genuine whereas all sales made on that date are of Nakshatra brand and sales bills were furnished. This apart AO has accepted the closing stock of jewellery declared by the assessee. Thus, when the sales made on 08.11.2016 is already considered by the assessee in its revenue, the same cannot be added u/s 69A of the Act by invoking section 145(3). 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 613/2010 order dt. 09.04.2010 (Delhi) (HC) In the facts of above case cash of Rs.24,58,400/- was deposited in bank account. The Assessing Officer made the addition on the ground that nexus of such deposit was not establish with any source of income. The assessee claimed that it was duly recorded in the books on account of cash sales and was considered in the Profit and Loss Account. The Assessing Officer had verified the stock and cash position as per books and had accepted the same. Complete books of account and cash book were submitted to the Assessing Officer and no discrepancy was pointed out. On this basis CIT(A) deleted the addition. Tribunal also observed that it is not in dispute that sum of Rs.24,58,400/- was credited in the sale account and had been duly included in the profit disclosed by the assessee in its return. Therefore, cash sales could not be treated as undisclosed income and no addition could be made once again in respect of the same. The Hon ble High Court dismissed the appeal filed by the Department. New Pooja Jewellers Vs. ITO ITA No.1329/Kol/2018 (Kol.) (Trib.) The relevant Para 15 of the order reads as under:- 15. Be it as it may, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable w.e.f. 01.04.2017. Hence, this section will operate on the income referred to in sections 68, 69, 69A, 69B, 69C or 69D which accrues or arises on or after 01.04.2017. For this reliance is placed on the decision of Supreme Court in case of Karimtharuvi Tea Estate Ltd. Vs. State Of Kerala 60 ITR 262 wherein it is held that it is well-settled that the IT Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force. In the instant case, there is no escape from the conclusion that the Surcharge Act not being retrospective by express intendment, or necessary implication, it cannot be made applicable from 1st April, 1957 as the Act came into force on 1st September of that year. Since the Surcharge Act was not the law in force on 1st April, 1957 no surcharge could be levied under the said Act against the appellant in the asst. yr. 1957- 58. Further the Full Bench of Patna High Court in case of Loknath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. The observations of the Apex Court in paragraph 33 of the judgment in the case of Keshoram Industries and Cotton Mills (supra), clarifies this position. 18. In view of the judgments of the Apex Court in the case of Keshoram Industries (supra) as well as Karimtharuvi Tea Estate Ltd (supra) this Court would have no hesitation in holding that for deciding the liability of a particular provision of the Income Tax Act, the date of accrual of income would be relevant. If the provision comes into force in a particular financial year, it would apply to the assessment for that year but cannot be made applicable in respect of assessment for a previous year. 19. The Amending Act introduced a new Section 64(1) (iii) in the Income Tax Act with effect from 1.4.1976. The tax liability under the said provision could therefore be charged on the assessee, in the assessment which was to be made for that accounting year i.e. 1976-77, which would be done in the assessment year 1977-78. The Amending Act introducing a new tax liability which came into force with effect from 1.4.1976 could not be given a retrospectivity and be made applicable to the previous accounting year i.e. 1975-76 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27th August, 2002, with the subject Finance Act, 2002 Explanatory Notes on provision relating to Direct Taxes . This circular has been issued after the passing of the Finance Act, 2002, by which amendment to Section 113 was made. In this circular, various amendments to the Income Tax Act are discussed amply demonstrating as to which amendments are clarificatory/retrospective in operation and which amendments are prospective. For example, explanation to Section 158BB is stated to be clarificatory in nature. Likewise, it is mentioned that amendments in Section 145 whereby provisions of that section are made applicable to block assessments is made clarificatory and would take effect retrospectively from 1st day of July, 1995. When it comes to amendment to Section 113 of the Act, this very circular provides that the said amendment along with amendments in Section 158BE, would be prospective i.e. it will take effect from 1st June, 2002. Finance Act, 2003, again makes the position clear that surcharge in respect of block assessment of undisclosed income was made prospective. Such a stipulation is contained in second proviso to sub-section (3) of Section 2 of Finance Act, 2003. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties. Admittedly, the Photostat copy of Franchisee Agreement dated 23-07-2013 allegedly entered between the assessee with M/s. Nakshatra Brands Ltd., Mumbai was neither before the AO at the time of assessment nor before the ld. CIT(A) at the time of appellate proceedings. Even before the Bench, no application for additional evidence as prescribed under Rule 29 of Income Tax (Appellate Tribunal) Rules, 1931 has been moved. In this situation, the Bench cannot accept the unverifiable Photostat copy of alleged agreement. It is also noted that even before the Bench no documents in the shape of bills etc. containing complete details of the alleged purchases who allegedly purchased jewellery in cash has been placed on record. The Bench has also considered the citations referred by the assessee but the same are not found applicable in the case of the assessee on factual aspect. In view of the above deliberations, the Bench does not find merit in the submissions of the assessee and find no infirmity in the order of the ld. CIT(A) which is sustained. Thus the appeal of the assessee is dismissed. 3.0 In the result, the appeal of the assessee is dismissed. Order pronounced in the ..... 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