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TMI Blog2023 (9) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... trading activity of gold ornaments in the name and style of M/s Nirosha Jewels. Assessee filed his return of income on 30/10/2017 declaring a total income of Rs. 942,610. This return was picked up for scrutiny. Necessary notices under section one 43 (2) of the act were issued to the assessee. The learned AO on analysis of the bank statements submitted by the assessee found that assessee has made cash deposit of Rs. 15,990,000 in old currency (specified banknotes) during the demonetization period in his Axis bank, Fort, Mumbai's account in account number 914XXXXXXXX8776. The learned assessing officer questioned the assessee and asked to submit information. The assessee submitted that identical question has been asked by The Deputy Director of Income Tax (Investigation), Thane as per letter dated 6/12/2016 wherein the assessee submitted that he has deposited cash in his current account maintained with that bank account out of the cash sale proceeds generated on 8/11/2016 at midnight. He submitted that after the announcement of demonetization there was panic buying of the gold and bullion. He submitted that only requirement was to obtain permanent account number card for customers buy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he maintains the stock of register of gold bar, gold annulment for the respective period which have shown the transaction of gold. We stock statements were available before the lower authorities however none of them disputed this fact but has not considered that the amount of quantity of gold sale has been reduced from the closing stock. He further referred to the business of purchase of gold prior to the demonetization period. He submitted that the purchase gold was found from genuine parties, copy of the bills for produced before the lower authorities were not disputed. Therefore, this now is an admitted fact that assessee was having enough stock to sale the gold. Furthermore, the assessee has produced all the sales bill before the new authorities, none neither of the customer was examined more questioned. Assessee has collected out to bat at the rate of 1.20% and also deposited the same with the methodology. Each of the invoice of sale has been signed by the customer in confirmation of having purchased goods from the assessee. The sale consideration has been shown in the profit and loss account as income. The cash book submitted before the lower authorities was not at all di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned departmental representative supported the orders of the lower authorities. 08. We have carefully considered the rival contention and perused orders of the lower authorities. We find that assessee is a jeweller. On the date of demonetization assessee has sold gold in cash amounting to Rs 1,59,90,000. The same cash is deposited in the Axis bank account of the assessee in 2 tranches. It is to be noted that assessee has shown the total turnover of Rs. 8.90 crores and the gross profit of Rs. 23.24 lakhs have been shown. Out of the total turnover of Rs. 8.90 crores, the turnover of Rs. 1,59,90,000 is in dispute. Assessee has maintained regular books of accounts and also such books of accounts are supported by the stock register. Assessee has maintained all such records by which the learned AO has accepted the total turnover of Rs. 8.90 crores also for turnover of Rs. 1.59 crores. Sales of the assessee are supported by invoices, removal of that stock from the stock register, confirmation of the buyer of collecting the jewellery. It has been shown by the assessee that stock is available with the assessee before the demonetization. Assessee is also supported such stock by immedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of number of bills, transactions cannot be used to invoke the provisions of section 68 of the income tax act when no independent enquiry by the AO is made. The necessary ingredient of section 68 of the act such as nature and source of the credit is explained by assessee. There is no probing by the AO on these two ingredients. Further honourable Bombay High Court has also held that if the assessee failed to produce the parties to whom assessee has sold goods, merely that fact cannot result into an addition in the hands of assessee. To make the addition, the learned assessing officer should have thrown back onus on the assessee by making an independent enquiry. The simplest thing that could have been done was whether the assessee was having the adequate stock prior to the demonetization or not. The AO failed to do that also. The learned CIT - A also did not make any enquiry by himself or through AO. In view of above facts and circumstances, the addition in the hence of the assessee cannot be sustained. 010. Assessee has relied upon several judicial precedents wherein on identical facts and circumstances the addition made in the hands of a jeweller on disproportionate sale shown on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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