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TMI Blog2024 (5) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the assessee as unsustainable and treat the cash sales as bogus and bringing the cash deposits to tax u/s 68 of the Act. The comparative figures for past years can no doubt provides a starting point for further examination and verification but basis such comparative analysis alone and without any further examination which points out any defect or manipulation in the documentation so submitted or in terms of availability of requisite stock in the books of accounts, the sales so undertaken by the assessee which is duly recorded in the books of accounts cannot be rejected and treated as bogus. We agree with the contention of the AR that where the cash sales duly offered to tax have been accepted, bringing the realization of sale proceeds in cash to tax will amount to double taxation and the same is clearly unsustainable in law and cannot be upheld. Appeal of the assessee is allowed. - Shri. Aakash Deep Jain, VP And Shri. Vikram Singh Yadav, AM For the Assessee : Shri Sudhir Sehgal, Advocate And Shri Rishabh Marwah, C.A For the Revenue : Smt. Amanpreet Kaur, Sr. DR ORDER PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... readymade Garments. It filed its return of income declaring total income of Rs. 1,33,650/- which was selected for scrutiny and notices were issued. As per the AO, the assessee has made cash deposit of Rs. 50,00,000/- during the demonetization period and out of which Rs. 48,00,000/- have been deposited on 13/11/2016 and in its response, the assessee has submitted that an amount of Rs. 17,13,078/- were cash receipt from the identifiable persons with PAN which have been duly furnished by the assessee. In respect of the remaining amount of Rs. 30,86,922/-, it was submitted by the assessee that the same relates to cash sales of knitted clothes to certain unidentifiable persons without PAN. The AO further stated that the assessee has filed copy of the cash book and retail invoices from 06/10/2016 onwards and on perusal thereof, certain abnormal features in the cash book were noted namely, i) prior to October 2016, there are very nominal instances of cash sales. It is from 06/10/2016 that cash sales have abruptly gone up. As on 05/10/2016, there was cash in hand of Rs. 13,52,272/- which has gone up to 48,10,944/- as on 06/11/2016 that is in a month, ii) the cash sales of the assessee have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2016 and also sales to persons having PAN. Considering the above, the action of the AO and addition of Rs. 19,13,078/- was confirmed. 9. Against the said findings and the direction of the Ld. CIT(A), the assessee is in appeal before us. 10. During the course of hearing, the Ld. AR submitted that there was total cash deposit of Rs. 40,00,000/- on 13/10/2016 during the demonetization period. It was submitted that the books of accounts are duly audited and AO has accepted the book results and opening stock purchased and closing stock has not been doubted by the AO. It was submitted that the assessee has been regularly paying VAT and has maintained proper record of the sale bills and copy of the VAT returns were filed during the course of assessment proceedings. It was submitted that the Revenue cannot challeng the cash sales made by the assessee as it is part and parcel of the every business and the Board has not put any bar by making any cash sales and the assessee has not done any transaction outside purview of the Income Tax Act. 10.1 It was submitted that the Courts have held from time to time that in respect of the cash sales, there is no necessity for the assessee to maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endra Kumar Agarwal (2023) 104 ITR 455 (Jaipur Trib) DCIT Vs. Roop Fashion 145 taxmann.com 216 (Chd Trib) 10.3 It was submitted that from the perusal of the audit report, it is also clear that the total sales during the year under consideration have increased to Rs. 3,44,58,152/ as compared to Rs 2,55,53,672/ in the last year. Thus, there is increase in sales by 35% during the year under consideration. The said increased sales has not been doubted by the department. So, the cash sales as made by the Assessee can very well be covered under the increased sale for the year under consideration, which has duly been accepted by the department. 10.4 It was submitted that the Assessing Officer has doubted the sales as made by the Assessee, merely on the basis of the higher number of sales bills as issued by the Assessee in span of few days. The said exercise as done by the Assessing Officer is merely on doubts/suspicion and it is a settled law that doubt and suspicion, howsoever, strong it may be, cannot take the shape of evidence. Reliance is being placed on the following judgments:- Commissioner of Income Tax Vs. Ram Narain 224 ITR 180 (P H) JCIT Vs. Gramophone Company of India Ltd. 265 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e explanation so made by the assessee as unsustainable and treat the cash sales as bogus and bringing the cash deposits to tax u/s 68 of the Act. The comparative figures for past years can no doubt provides a starting point for further examination and verification but basis such comparative analysis alone and without any further examination which points out any defect or manipulation in the documentation so submitted or in terms of availability of requisite stock in the books of accounts, the sales so undertaken by the assessee which is duly recorded in the books of accounts cannot be rejected and treated as bogus. Therefore, we agree with the contention of the ld AR that where the cash sales duly offered to tax have been accepted, bringing the realization of sale proceeds in cash to tax will amount to double taxation and the same is clearly unsustainable in law and cannot be upheld. In view of the same, we find the explanation of the assessee as genuine and reasonable duly supported by the documentation and books of accounts and the addition so made by the AO and confirmed by the ld CIT(A) is hereby directed to be deleted. 13. In the result, the appeal of the assessee is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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