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TMI Blog2023 (12) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the cash deposit (SBN Notes) during demonetization period cannot be from the explained and disclosed sources and the same is required to be treated as deposited of undisclosed income of the assessee. Thus the assessee glumly failed to justify the genuineness of the cash on hand viz a viz its use for payment of service tax, if the assessee was having the cash why the government dues are not discharged and kept the cash on hand and not only that the filmy reasons provided by the assessee of shifting the cash on hand from one place to another is also not justified with the corroborative evidence. Thus, we are not inclined to interfere in the order of the ld. CIT(A). Thus Ground No. 2 of the assessee is dismissed. Addition on account of difference in turnover as per financials and Form 26AS - HELD THAT:- Assessee had claimed TDS on basis of Form 26 AS and at the same time has shown less receipt from M/s Sanghi Industries. Hence, there is a substantial difference in the receipts shown as per Form 26AS. Decided against assessee. Disallowance of temporary labour charges - disallowance u/s 37(1) - HELD THAT:- Assessee as show caused on 01-12-2019 for which the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the due date of return . Bench does feel to interfere in the order of the ld. CIT(A) above as the decision of the ld. CIT(A) is based on the fact that the assessee has not placed the relevant details on record and he has already directed the ld. AO to call for the details and considered the addition accordingly. Hence, this additional ground of the assessee is dismissed. - DR. S. SEETHALAKSHMI, JM SHRI RATHOD KAMLESH JAYANTBHAI, AM For the Appellant : Shri Mahendra Gargieya, Advocate For the Respondent : Shri A.S. Nehra Addl. CITa ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against the order of ld. CIT(A) dated 19-10-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2017-18. 2. In this appeal the assessee has raised the following grounds of appeal: 1. The impugned order u/s 143(3) dated 25.12.2019 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. Rs. 24,00,000/-: The CIT(A) erred in law as well as on the facts of the case in confirming impugned additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest u/s 234B 234D of the Act. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 2.1 It is noted that the ld. AR of the assessee vide letter dated 20-5-2023 has prayed for additional ground being ground no. 4.1 and 4.2 reads as under:- 4.1 Rs. 80,20,010/: the ld. CIT(A) erred in law as well as on the facts of the case in setting aside the issue in hand to the file of the AO to call for reconciliation statement from the Appellant and restrict the disallowance to the amount of Service Tax as shown as expenditure in P L Account, which remains unpaid before the due date of filing the return in as much as the ld. First Appellate Authority was having no jurisdiction to set aside an issue and was supposed to have finally adjudicated upon the same in after obtaining remand report before passing the final appellate order. Thus, the due and prescribed process of law has not been followed. Hence, the impugned order to this extent deserves to be quashed. The impugned addition of Rs. 80,20,010/- deserves to be completely deleted on this ground alone. 4.2 The Id. CIT(A) erred in law as well as on the facts of the case appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited can not be accepted to be representing the cash-in-hand on 08.11.2016 due to the above reasons. This ground is rejected. 4.1 During the course of hearing, the ld. AR of the assessee submitted that the assessee had fully explained the source of cash deposit of Rs. 24.00 lacs made in the bank account on 6-12-2016 for which the ld. AR of the assessee has filed the detailed written submission as under:- Submissions: 1.1 Source fully explained and established: At the outset it is submitted that the Assessee has duly and fully explained the source of cash deposit of Rs. 24,00,000 /- made in the bank account on 06.12.2016 with the help of the regularly maintained cash book on day to day basis. It is not denied that the said cashbook produced before the AO for financial year 2016-17 (AY 2017- 2018) (PB 26-30), which shows that there was sufficient cash in hand available on the eve of the cash deposit i.e. 05.12.2016 at Rs. 29,68,475.47 hence immediately thereafter, on the next day, i.e. 06.12.2016 the Assessee was able to make deposit of cash in PNB Beawar branch. Prior to this deposit also, the Assessee was in the practice of making regular cash deposits and wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessed at the relevant point of time had undertaken labor job with Shri Cements ltd., a site office was maintained at Ras Babra near Beawar, and to disburse wage payments and to meet with the need of day to day expenses some cash was used to be kept there. In any case, however, it was a part of overall cash in hand of the Head Office at Kota. This way, the first three objections raised by the AO in para 4.3 stands duly answered. 2. Human Probabilities support: 2.1 The surrounding circumstances and human probabilities play an important role and, in this case, strongly support the contention of the Assessee, in as much as soon after demonetization was declared, no one was ready to accept payment in cash, logically, legally and rightly so, because the old currency had become the non- acceptable (currency) and was not otherwise permissible to be used. At the same time, the Central Government had granted relaxation that such notes could be deposited back in the bank account till 31-12-2016. It is under this background that the Assessee in the best business interest, as a best judge, found it better to deposit back such old currency in the bank itself otherwise had it cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of AO (para v) that bank statement of Beawar shows no cash transactions and hence, the assessee was not having any cash in hand in Beawar, is a mere imagination and a wrong inference drawn by him in as much as the Bank Account was purportedly opened at Beawar because of the labor job work going on at Shri Cements Ltd., a place near to Beawar as may be needed in future. However, there was no occasion of making various transactions in the said Bank Branch. This way, the allegation in pr.4.3 IV stands clarified. 4.2 The ld. AO had already made up his mind to make addition as reflected in (para v) when it says that the cash deposit during demonetization period cannot be from the explained disclosed sources and required to be treated as deposited out of undisclosed income. Once the Assessee has explained and fully established the source of the deposit, there is no law that any cash deposited during demonetization period must be considered as undisclosed income only. More so, when the AO did not whisper the possibility of any other source generating the income. 4.3 The ld. CIT(A) says that the cash of Rs. 29,69,025.47 remained for a month only after the start of demonetiza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. The High Court has agreed with the said view of the Tribunal. There is no error in the said finding recorded by the Tribunal. There is thus no merit in these appeals and the same are accordingly dismissed. CIT vs. Smt. P.K. Noorjehan (1980) 15 CTR (Ker) 138: (1980) 123 ITR 3 (Ker) :42R.1622, affirmed. Thus, it was fully established beyond all reasonable doubts that there was sufficiency of cash available and in absence of any evidence of utilization thereof elsewhere, the same was deposited in the bank. 6. Supporting Case Laws on availability of funds: The Hon ble High Courts and the Tribunals in different factual situations have considered the availability of the cash when the Dept. failed to establish that such cash which was made available in hands of the assessee because of the withdrawal from the banks or sale proceeds of the jewellery and so on, utilized elsewhere, held that no addition can be made. 6.1 In the case of PCIT vs. Dilip Kumar Swami [2019] 106 taxmann.com 59 (Raj)(DPB 14-16) it was held that Assessee filed his return declaring certain taxable income - In course of assessment, Assessing Officer noted that assessee had deposited cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries therein were not challenged. No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party. The appellants took it that the affidavits of these parties were enough and neither the Appellate Assistant Commissioner, nor the Income-tax Officer, who was present at the hearing of the appeal before the Appellate Assistant Commissioner, considered it necessary to call for them in order to cross-examine them with reference to the statements made by them in their affidavits. Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits. ---------xxxxxx--------xxxxxx------xxxxxx------- A mere calculation of the nature indulged in by the Income-tax Officer or the Appellate Assistant Commissioner was not enough, without any further scrutiny, to dislodge the position taken up by the appellants, supported as it was, by the entries in the cash book and the affidavits put in by the appellants before the Appellate Assistant Commissioner. ---------xxxxxx--- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined to be out of the cash withdrawal in Dec-2000. 6.5. Also refer Anand Prakash Soni v/s DCIT (2006) 101 TTJ 97 (Jd) para 5-6 Search and seizure Block assessment Computation of undisclosed income Cash found during search Assessee is entitled to furnish cash flow statement to explain the transactions when no books of account are maintained In such circumstances it becomes the duty of the AO to verify the balance sheet and cash flow statement with the necessary material including the details already filed along with the returns in the past Assessee explained that the cash found at the time of search was withdrawn from the bank some time back which was partly used for purchasing gold and part of the amount was given by the assessee to his wife There is nothing to suggest the utilization of the withdrawal amount elsewhere Said withdrawal is duly reflected in the cash flow statement and closing cash balance is more than the amount found at the time of search Thus, addition cannot be sustained 6.6. Lastly sec.115BBE can t be invoked because it is admittedly a case of business income. Hence, the entire addition deserves to be deleted in full. 4.2 On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had utilized the amount for payment of service tax. Apparently, the assessee wanted to pay the tax with the SBN but once the amount has been credited in the bank account of the appellant, it will have to explain the source as well as face the consequences, if any. The amount of cash deposited cannot be accepted to be representing the cash-in-hand on 08.11.2016 due to the above reasons. Hence in the present facts and circumstances of the case, the assessee glumly failed to justify the genuineness of the cash on hand viz a viz its use for payment of service tax, if the assessee was having the cash why the government dues are not discharged and kept the cash on hand and not only that the filmy reasons provided by the assessee of shifting the cash on hand from one place to another is also not justified with the corroborative evidence. Thus, we are not inclined to interfere in the order of the ld. CIT(A). Thus Ground No. 2 of the assessee is dismissed. 5. Apropos Ground No. 3.1 3.2 of the assessee, the facts as emerges from the order of the ld. CIT(A) are as under:- 5.3.1 Ground No. 3 Addition of Rs. 80,85,610/- on account of difference in turnover as per financials and Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecedents examined, we reckon that the holding of Dhirendra Nath, Onkarmal, and Bhopal Sugar Industries is unmistakable. Under the amended section 251 of the Act, the Appellate Commissioner may confirm, reduce, enhance, or annul the assessment. But he cannot refer the case back to the Assessing Officer for making a fresh assessment; nor can he direct the Officer to decide in accordance with his directions. 2.2 In the case of Sapphire Land Development (P.) Ltd. v. DCIT [2023] 147 taxmann.com 50 (Mumbai- Trib) (DPB 36-47), it was held: 14. It is an established position of law about the powers of the Ld. CIT (A) as discussed (supra), based on above, Ld. CIT (A) can confirm, reduce, enhance or annul the assessment, but he cannot remand the matter back to the file of AO. Direction of Ld. CIT(A) in directing the AO to re-verify claim of Long Term Capital Loss of Rs. 7,82,60,511/- will tantamount to remand of matter back to the file of AO which is not permissible in the eyes of law. If required and Ld. CIT(A) deemed it fit to confirm, reduce, enhance or annul the assessment, he may ask for a report from the AO to act. Hence, this action of Ld. CIT (A) is bad-in-law and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom a perusal of Form 26AS that assessee had received payment from different sources/airlines and since there was a difference between amount shown as turnover by assessee and as reflected in Form 26AS, Assessing Officer asked assessee to explain difference - Assessee explained that discrepancy occurred due to wrong data/information filed by payee Airlines - Assessee stated that ground handling business was taken over by another company and alleged amount related to said company Assessee submitted that goof- up took place in office of TDS deductor while filling From 26AS as assessee's PAN had been entered wrongly for period which services were not claimed to have been rendered by assessee firm and relevant bills were not claimed to have been raised by assessee firm on Airlines - However, according to Assessing Officer, assessee delayed in submitting details during assessment proceedings and, thus, he made additions to income of assessee - Commissioner(Appeals) deleted addition, holding that Form 26AS alone could not lead to addition of income if claims were made of wrong data entry/information and lack of corresponding services by deductee to deductor - Whether only a mismatch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port s accounting note of Revenue Policies at No. 13(f) that the income shall be account for on accrual basis, therefore, it was supposed to include the amount of Rs. 80,85,610/- in receipts of this year which the assessee has not done. 5.6 Accordingly, an addition of Rs. 80,85,610/- is being made under this head to the total income of assessee. After this addition, total income under this head comes to Rs. 92,47,097/- (Rs.11,61,487/-) as declared by the assessee + Rs. 80,85,610/- as above addition) 5.4 In first appeal, the ld. CIT(A) has confirmed the action of the AO. From the records, it is noted that the assessee had claimed TDS on basis of Form 26 AS and at the same time has shown less receipt from M/s Sanghi Industries. Hence, there is a substantial difference in the receipts shown as per Form 26AS. The Bench noted that the ld. CIT(A) has rightly restored this issue with following narration. The appellant should be given one opportunity to reconcile the receipts as per Form 26 AS and the financials and particularly to show that the receipts as well as TDS credit from this party have been duly considered in a different year. This ground is considered allowed for st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO, the expenses appeared relating to previous year and the same could not be allowed in the year under assessment. Thus the AO made disallowance of Rs. 26,35,358/- u/s 37(1) of the Act and added to the total income of the assessee and the ld. CIT(A) has confirmed the action of the AO holding that the AO had sought certain specific details pertaining to temporary labour wages and the details were not supplied by the assessee which were disallowed. The Bench feels that in the interest of equity and justice, the Ground No. 4 of the assessee is restored to the file of the AO to decide it afresh for which the assessee will produce the documents relating to labour payments (supra) and if it is found correct then the relief may be granted to the assessee. The assessee is also directed to produce the relevant bills, vouchers, and other concerning papers in order to settle the issue in question. Thus Ground No. 4 of the assessee is allowed for statistical purposes. 7. The Ground No. 5 of the assessee is relating to charging of interest u/s 234B 234D which is mandatory and consequential in nature. 8. As regards the additional ground raised by the assessee amounting to Rs. 80,20,21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer and the explanation offered by the appellant. As per the provisions of section 43B. Payments in respect of taxes and Government dues can be claimed as expenditure only on actual payment on or before the due date of return. This section has been enacted to enforce that taxes and Government dues are actually paid when the same is claimed as expenditure, including in respect of Assessee who maintain accounts on mercantile basis. The AO has disallowed the amount by noting that Government dues have remained unpaid hence the same was disallowed. On the other hand, the appellant has applied for Dispute Resolution Scheme under Sabka Vishwas Scheme of CBIC. In these circumstance, what is pertinent is how much expenditure has been debited in the account of the appellant. If it has debited and claimed Service Tax payment as expenditure, then the same would be allowed only if paid before the due date of filing of return. However, if the same has not been claimed in the P L account/return, then no such disallowance is required to be made. The AO may call for a reconciliation statement from the appellant and restrict the disallowance to the amount of Service Tax showed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in this year nor in the past. In fact, the Assessee was receiving the money as a trustee for and on behalf of Central Government on one hand and making the payment/was supposed to make the payment to the Central Government. But simply because the Assessee could not/did not make any payment of service tax which remained payable at the end of the year could not be disallowed in view of the substantive and admitted fact that in the P L account no claim as such was made by the Assessee. The provisions of Sec.43B itself presupposes that some claim is made by the Assessee and the same is otherwise allowed under the provisions of the Act then only, a disallowance can be made, if so required thereunder. 2. After setting aside, the AO has completed the second round wherein the set aside Assessment Order has been passed u/s 143(3)/250 on dated 19.10.2022 (PB II-56 to 59). However, observing that out of the subjected disallowance of Rs. 80,20,090/-, the disallowance to the extent of Rs. 17,20,570/- was not repeated for the reason that the same related to (FY 2015-16) AY 2016-17 and not to this year, but the balance amount of Rs. 62,99,520/- was disallowed. Interestingly, in the set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax has become payable in terms of clause (a) of section 43B because that clause specifically mentions sum payable by the assessee. 17. In view of the above observations, we are of the view that since service tax was not payable by the assessee, the rigour of section 43B could not have been applied to the case of the assessee. Alternatively, and without prejudice to our earlier submissions, 4.2. On legal aspect our submissions are the same as made towards GOA2 that the CIT(A) acted beyond jurisdiction while setting aside the issue to the file of the AO for a decision afresh. Hence, this issue may also restore to the file of the ld. CIT(A) for a decision afresh thereon. 8.3 On the other hand, the ld. DR has submitted that when the ld. CIT(A) has allowed this ground of Section 43B and the assessee directed to supply the details of the contentions raised and thus the issue is already rest with the ld. AO. Thus, there is no meaning to raise as an additional ground but he however, supported the order of the AO. 8.4 After hearing both the parties and perusing the materials available on record, the Bench does feel to interfere in the order of the ld. CIT(A) as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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