9911796707
TMI Blog2024 (4) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... The demand of Ld. AO to produce CCTV recording after lapse of considerable period of time could not be said to be reasonable particularly when all the other evidences supports the case of the assessee. There is no finding by Ld. AO that any particular sales affected by the assessee exceeded threshold limit which would require collection of tax at source (TCS). Since cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked in the present case. The case laws as cited by Ld. CIT(A) duly supports the case of the assessee. Under these circumstances, the impugned additions have rightly been deleted by Ld. CIT(A) - Decided against revenue. Excessive interest paid on unsecured loan creditors - AO observed that the assessee paid interest of 21% to loan creditors - AO, invoking the provisions of Se.40A(2)(b) r.w.s. 37 restricted the same to 12% and disallowed a sum accordingly - CIT(A) deleted addition - HELD THAT:- Due regard has to be given to fair market value of the facilities or the legitimate needs of the business. Simply because bank loan rate is lower, the same would not entitle Ld. AO to invoke these provisions unless it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales on the 08/11/2016 after the announcement of demonetisation is not backed by any evidence such CCTV footage and party-wise sales details on 08/11/2016, which were called for during scrutiny proceedings and not furnished. 5. The CIT(A) of NFAC failed to understand the fact that the Respondent had left with sufficient time to file the VAT returns for the month of November 2016, which cannot be a conclusive evidence to prove that the actual sales have happened. 6. The CIT(A) erred in deleting the additions made by the Assessing officer based on the additional evidences submitted by the assessee which were not furnished during scrutiny proceedings, for which the CIT(A) has not called for remand report. 7. The CIT(A) of NFAC erred in allowing the higher rate of interest to the unsecured loan creditors over and above the SBI rate. The loans taken from close relatives only. The payment of higher rate of relative is a method of is a method followed by the assessee to escape the higher slab of taxes. 8. For these and other reasons that may be adduced at the time of hearing and the order of the CIT(A) be reversed and the order of the Assessing Officer be upheld. As is evident, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept 15 18,44,444.46 5,35,11,407 5,05,50,000 6,000 19,94,700.00 28,05,151.46 Oct 15 28,05,151.46 6,09,12,359 5,94,00,000 8,000 27,82,053.00 15,27,457,46 Nov till 08.11.2015 15,27,457.46 2,32,95,615 1,51,00,000 7,000 16,06,602.00 81,09,470.46 Details of monthwise cash sales and cash deposits from 01.04.20216 to 08.11.2016 Monthwise Opening cash in hand Cash sales, Receipts & Advance Cash deposited in bank Cash withdrawal from bank Cash deposit ed in other branch Cash purchase, Salary, HRA & Other expenses Closing cash on hand Apr 16 25,31,752,46 4,55,23,885,00 4,56,00,000 26,000 13,14,478 11,15,159.46 May 16 11,15,159.46 5,77,03,081.95 5,28,00,000 34,000 32,54,447 27,29,794.41 June 16 27,29,794,41 6,07,07,016.00 4,65,50,000 60,00,000 29,000 2,13,83,596 14,74,214.41 July 16 14,74,214.41 4,22,81,828.00 1,43,00,000 74,00,000 19,000 3,16,52,839 51,84,203.41 Aug 16 51,84,203.41 6,07,42,920.00 5,89,00,000 34,000 57,58,237 12,34,886,41 Sept 16 12,34,886.41 5,40,97,996.00 5,10,50,000 26,500 23,39,172 19,17,210.41 Oct 16 19,17,210.41 8,47,13,457.00 7,95,00,000 54,000 45,58,492 25,18,175.41 Nov. till 08.11.2016 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, in the month of Nov., 2016 i.e., during 01.11.2016 to 08.11.2016, the assessee have shown the cash sales of Rs. 9.59 Crores which would mean that the assessee has realized 147% of average monthly sales of Rs. 6.50 Crores within that period of 1/3rd of the month (01.11.2016 to 08.11.2016) which could not be accepted. Secondly, the pattern of cash deposit would show that the assessee has the habit of depositing 90% to 95% of the regular cash sales into the bank accounts immediately and cash holding capacity was very less. However, during 01.11.2016 to 08.11.2016, the assessee has shown closing cash-in-hand of Rs. 9.59 Crores whereas closing cash as on 8.11.2015 was Rs. 81.09 Lacs only. Further, on 07.11.2016, the assessee has shown cash sales of Rs. 110.36 Lacs whereas on 08.11.2016, the assessee has shown cash sales of Rs. 668.88 Lacs which was very abnormal and unreasonable. To accept claim of abnormal sales, the assessee was required to submit the proof of CCTV record that huge customers were standing in front of the assessee's showroom which assessee failed to do so. The Ld. AO further alleged that the assessee has to deduct TCS on such abnormal sales. The assessee controv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng stock was sold, cash was received and the same was deposited in the bank accounts. The assessee furnished all the requisite details with supporting documents and necessary evidences. Complete purchase details, sales details, stock summary and cash summary were submitted which has been accepted by Ld. AO. Reliance was placed on various judicial decisions to support the submissions. The detailed submissions of the assessee have already been extracted in the impugned order. 6. The Ld. CIT(A) concurred with aforesaid submissions of the assessee and observed that the assessee maintained proper books of accounts in regular course of business which was duly audited by the independent Chartered Accountant u/s 44AB. All the sales, purchases and stocks were recorded in the books of account which has not been doubted by Ld. AO. The sales shown by the assessee had been accepted by Sales Tax / VAT Department. The Ld. AO has not disputed the books of accounts nor pointed out any discrepancy in the sales register, stock at any time of the year. In case there are no defects in the purchases and sales and the same are matching with inflow and the outflow of stock, there could be no reason to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of impugned amount as sales and produced sales bills and admitted revenue receipts which were offered to tax, the addition so made by Ld. AO u/s 68 was to be deleted. The Ld. AO did not pointed out any defect in purchases and the accounts were audited u/s 44AB. Therefore, Ld. AO erred in doubting the source of cash when the assessee successfully explained that the source of cash deposited in the bank account was out of sales proceeds. Drawing strength from this decision, Ld. CIT(A) deleted the impugned additions. 8. The disallowance of excessive interest disallowance was deleted on the ground that the assessee would always need the funds to run its business. Taking loans from financial institutions would involve lot of procedures and documents including pledging of properties. The loans from family members would be easy to take and no collateral security would be required. Aggrieved, the revenue is in further appeal before us. Our findings and Adjudication 9. From the fact, it emerges that the assessee is dealing in precious metals. It transpired that the assessee deposited cash during demonetization period, the source of which was stated to be out of sales generated by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept for mere allegation and few statistics, there is nothing on record to support the conclusions drawn by Ld. AO that the assessee's own unaccounted money was introduced and accommodated under bogus customers' name during the demonetization period. The demand of Ld. AO to produce CCTV recording after lapse of considerable period of time could not be said to be reasonable particularly when all the other evidences supports the case of the assessee. There is no finding by Ld. AO that any particular sales affected by the assessee exceeded threshold limit which would require collection of tax at source (TCS). Since cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked in the present case. The case laws as cited by Ld. CIT(A) duly supports the case of the assessee. Under these circumstances, the impugned additions have rightly been deleted by Ld. CIT(A). The same could not be faulted with. Therefore, the corresponding grounds raised by the revenue stand dismissed. 10. So far as the disallowance of excessive interest u/s 40A(2)(b) is concerned, we find that it the prime requirement of Sec.40A(2)(a) that the assessee incur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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