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TMI Blog2023 (10) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... he stand that the SBNs were the currency received between 08.11.2016 to 12.11.2016, it would be incumbent upon the assessee to prove to the revenue as to from whom he has received the SBNs. In the absence of such prove, the deposit of SBN to the extent of Rs. 28 lakhs will have to be treated as the unexplained investment of the assessee. Appeal of the assessee is dismissed. - SHRI GEORGE MATHAN, JUDICIAL MEMBER For the Appellant : None (Written Submission) For the Respondent : Shri Kishore Ch. Mohanty, Sr. DR ORDER This is an appeal filed by the assessee against the order of the ld. CIT(A)-2, Bhubaneswar, dated 11.01.2023, passed in I.T. Appeal No. Sambalpur/10308/2019-20 for the assessment year 2017-2018. 2. None for the assessee, however, the assessee has filed his written submissions, which read as under :- 1. Nature of business and the modus operandi thereof, as submitted before the Ld. C!T(A): a. The assessee is an individual carrying on business of FMCG goods on wholesale and retail trading in the name and style of M/s Santoshi Agencies at Sohella, Dist: Bargarh. b. The assessee maintains computerized cash book, journal, Ledger, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of filing of balance sheet cash book from 08/11/16 to 12/11/16 (CA certified) before the Ld. CIT(A)) Hence, the finding of the Ld. CIT(A) that the cash book revealed no transactions after 08/11/2016, is submitted to be totally incorrect and un-true in the facts and circumstances of the case. During the course of assessment proceedings as well as the appellate proceedings, the dealer never contended that the demonetized notes were received from any third parties. Rather, the constant stand of the appellant, right from the response filed against cash transaction notice dated 06/02/2017 i.e., before the close of the previous year itself, was as under: Old assessee - Maintains regular books of accounts - subject to audit u/s 44AB - Trial Balance as on 08/11/2016 - Cash deposited commensurate with sales and realization of petty sundry debtors whose PAN is not known Hence, the finding of the Ld. CIT(A) that the demonetized notes were received from third parties is against the facts involved in the instant case. (Please refer Page 25 of the paperbook for mail dated 06/02/2017) (Please refer Page 26 to 27 of the paperbook for copy of reply file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realization of from sundry debtors is a regular phenomenon with quantum ranging from Rs. 0 to Rs. 8,00,000 per day. A set of statistical data in the case of the appellant for the previous year under consideration has been reproduced as under, for kind attention of the Hon'ble Members: a. More than 3 Lakhs/per day of Cash realization from debtors - 61 occasions/days b. Out of such 61 days, more than 4 lakhs/day of Cash realization from debtors 33 occasions/days c. Out of such 33 days, more than 5 lakhs/day of Cash realization from debtors - 20 occasions/days d. Out of such 20 days, more than 6 lakhs/day of Cash realization from debtors - 09 occasions/days e. Out of such 9 days, more than 7 lakhs/day of Cash realization from debtors - 02 occasions/days f. Out of such 2 days, more than 8 lakhs/day of Cash realization from debtors - ,01 occasions/days With regard to cash sales in a day during the previous year, the same varied between Rs. 0 to Rs. 18,00,000 (approx.). A set of statistical data in the case of the appellant for the previous year under consideration has been reproduced as under, for kind attention of the Hon'ble Members: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04/12/16 to 09/12/16 (6 days) 6,892.66 41,44,699.77 12,18,280.00 53,60,000 9,872.39 3. 10/12/16 to 27/12/16 (18 days) 9872.39 12,09,046.90 23,76,925.00 2,500 30,50,000 5,43,344.29 4. 08/03/17 to 15/03/17 (8 days) 6,764.06 28,22,849.22 12,75,530.00 40,00,000 1,05,143.28 The above table demonstrates that high value cash deposits, out of cash generated from cash sales . debtor realization, happens frequently to the assessee appellant in his regular course of business. The aforesaid fact has been examined by a Chartered Accountant from the books of accounts maintained by the appellant and a certificate thereof is attached herewith vide Annexure B to this submission. d. With regard to allegation as appearing in Para 3.3.3(b) of the appeal order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anged for new ones. Such a condition may be considered to be of an extraordinary nature, but nevertheless possible. Further, it was pointed out in the condition's precedent to the application of Section 69A, the relevant portion of which is reproduced below: 'In coming to the conclusions that the explanation offered by the assessee in the support of his case is not satisfactory, all the facts, circumstances and the evidence in the case have to be considered very carefully, and for this purpose, the assessee should be given due opportunity to adduce evidence in support of his explanation.' In the instant case, all the facts, circumstances and evidence provided by the assessee, have not been expressly denied or discarded by the Ld. A. O., but the addition of Rs. 28,00,0001- has been made regardless. Such actions of the Ld. A.O. amount to violations of the Principle of Natural Justice against the assessee, and such an order is liable to be quashed or set aside. (Please refer Page 10 to Page 11 of the paperbook) Unfortunately, the Ld. CIT(A) has entirely failed to consider the said Ground of Appeal No. 2 as taken before him and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 141 (Bangalore)] Copy of both the judgments have been attached as Annexure C to this submission. In view of the submissions made above in Para 3 4, it is humbly submitted that the Ld. CIT(A) has totally erred in dismissing the appeal of the appellant and confirming the addition of Rs. 28,00,000/- only on the grounds that cash balance as on 08/11/2016 was Rs. 252.40 even though cash book from 08/11/2016 to 12/11/2016 balance sheet as on 08/11/2016 (both duly certified by a Chartered Accountant) which clearly showed the sources of cash deposits and such an action of the Ld. CIT(A) is submitted to be arbitrary, unjustified, unwarranted and illegal. b. Grounds of 2 nd Appeal No. 2 For that on the facts and circumstances of the case, the Ld. CIT(A) erred in dismissing the appeal and such action of the Ld. CIT(A) is arbitrary, unjustified, unwarranted and illegal. Submissions; c. Grounds of 2 nd Appeal No. 3 For that on the facts and circumstances of the case, the Ld. AD (please read as Ld. Lower Authorities) erred in invoking the provisions of Section 69A for making addition of Rs. 28 lacs deposited by the appellant in its bank account, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.11.2016 read with the relevant provisions of Specified Bank Notes (Cessation of Liabilities Act) 2017 and action of the Ld. AO (please read as Ld. Lower Authorities) in ignoring the said notification as well as the provisions of the said act including submissions of the appellant without any reasons whatsoever is arbitrary, unjustified, unwarranted and illegal. Submissions; The Ld. AO in his assessment order simply alleged that the assessee was not authorized to receive old currency of Rs. 500 Rs. 1000 during the demonetization without specifying any source of law which prohibited the use and acceptance of SBNs. On the other hand, the appellant assessee, vide submissions contained in Page 11 to 19 of the paperbook, contended before the Ld. (IT(A), that the use of SBNs up to 30 December 2016 was never prohibited. However, the Ld. (IT(A) totally ignored the submissions made by the appellant and simply based on his views, held that the assessee was not authorized to accept SBNs during the demonetization vide Para. 3.3.1 of the appeal order. Further, the Ld. (IT(A) also failed to discard or rebut the submissions made by the appellant by passing a non-speakin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pressly denied or discarded by the Ld. (IT(A) before confirming the addition of Rs. 28,00,000. The Ld. (IT(A) has totally failed to adjudicate the submissions and contentions of the appellant assessee with respect to the allegations made by the Ld. AO that the appellant has allowed money Laundering and helped in conversion of black money. The said action of the Lower authorities in treating the regular business transactions effected by the appellant as a tool to facilitate money Laundering and to convert black money is submitted to be entirely baseless, un-true, unjustified and illegal. Hence, submitted for consideration. 3. On the other hand, it was submitted by the ld. Sr. DR that the only issue in the assessee s appeal was in regard to deposit of demonetised notes on 12.11.2016 to an extent of Rs. 28 lakhs in the account maintained by the assessee with UCO Bank, Sohela Branch. It was the submission that as per the cash book submitted by the assessee, the cash availability as on 08.11.2016 being the date on which the demonetisation took place, was only Rs. 252.40. It was the submission that though the assessee claims that the amount of Rs. 28 lakhs is out of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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