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TMI Blog2024 (5) TMI 1412X X X X Extracts X X X X X X X X Extracts X X X X ..... r neuron disease. Based on those facts we are of the considered view that the turnover of the assessee reflected in the bank account cannot be considered partly loan amount and partly turnover. Therefore, considering that fact placed before us by the assessee in person as well as duly supported by an affidavit filed by her along with related corroborative evidence like ledger for purchase sales and CA certificate, we admit those additional evidences based on the contention raised by the assessee, though the contention of the assessee contradict with that of placed before the ld. AO but considering the peculiar aspect of the matter we admit those additional evidence. AO shall compute the total credit of cash deposited into the bank account of the assessee viz a viz with the turnover with the evidence. Turnover declared by the assessee needs to be examined based on the corroborative evidence we direct the assessing officer to tax profit / income @ 8% of the total turnover under the provision of section 44AD of the act in the absence of any comparative chart, presently available by both the parties and law provide 8 % for retail trade. Therefore, we direct the assessing officer to ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case and in law, the Id. CIT(Appeals) has grossly erred in confirming the addition towards unexplained cash credit under section 69A of the Act to the extent of Rs. 36,98,100/- without considering the submissions and documents produced by the assessee appellant which is bad in law and illegal. 1.1 That on the facts and circumstances of the case and in law, the Id. CIT(Appeals) has grossly erred in not considering the fact that the amount of Rs. 1,27,55,100/- was deposited by assessee appellant out of the cash sale proceeds of her medical store. 1.2 That on the facts and circumstances of the case and in law, the Id. CIT(Appeals) has grossly erred in not considering the additional evidences submitted during the course of appellate proceedings, i.e., Trading Account, Profit Loss A/c., Purchase and Sale account, etc. 2. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing. First, we will take up the appeal of the assessee in ITA No. 412/JP/2023. 3. The brief fact of the case is that the assessee has filed his original return of income for A.Y. 2012-13 on 19-09-2012 declaring total income at Rs. 2,36,430/- which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, copy of VAT form no. 11 was uploaded. Similarly trading and profit and loss account was also uploaded in which total turnover of Rs. 28,84,988/- was reported. The assessee sought time which was not possible to provided as the assessment was getting time barred. As the assessee has not submitted sufficient details the ld. AO inclined to accept the cash deposits of Rs. 25,00,000/- from medical business and cash deposit of Rs. 61,87,000/- [86,87,000 less 25,00,000] treated as unexplained money and added to the income of the assessee u/s. 69A of the Act. 4. Aggrieved from the said order of the ld. Assessing Officer the assessee preferred an appeal before the ld. CIT(A) and the ld. CIT(A) has dismissed the appeal of the assessee. The additional evidence submitted by the assessee was also not considered by the ld. CIT(A) and treated the same as afterthought as the contention raised before the ld AO and that of with the ld. CIT(A) were different. The relevant para wherein the finding is recorded by the ld. CIT(A) is reiterated here in below :- 6. The appellant in its ground of appeal has assailed the addition of Rs. 61,87,000/- u/s 69A of the Act. The AO in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant on the basis of the incomplete documents and the sales was shown at Rs. 2884988/- and income was computed u/s 44AD @8.2% on the said turnover and accordingly the ROI was filed at Rs. 236430. It is to be noted that the original return was field on 19.09.2012. Further in its submission in reassessment proceeding the assessee has submitted that the cash deposit of Rs. 8687000/-. It is important to see the facts of the case as existing in the original assessment, at the time of the reassessment proceedings and at the appeal proceedings. The fact is that during the A.Y the assessee had shown a turnover of Rs. 2884988/- and ROI was filed u/s 44AD. The appellant in the reassessment proceedings stated that the reason for the cash deposit of Rs. 86887000/- is that the cash sale of medicines of Rs. 2884988/- and cash loan taken from relatives and friends amounting to Rs. 2608000/-. The submission of the appellant dated 20.12.2019 is made part of the assessment order. The relevant portion of submission is reproduced below: The reason for the same is that the assessee is running a retail medical shop in the name of M/s Vipin Medicals at Nayanpur, Kota and during the period under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the provisions of section 269SS of the Act. The ground of appeal is dismissed. 7. The appeal is dismissed. 5. As the appeal of the assessee was dismissed, the assessee prefers the present appeal before this tribunal on the various grounds as reiterated here in above. The ld. AR of the assessee relying on the submission made before the ld. CIT(A) submitted that in the present appeal the assessee in ground no. 1 and 1.1. challenged the legality of the assessment order. In support of these grounds, he submitted that the assessee has raised the additional ground before the ld. CIT(A). Though the fact that the additional ground was raised discussed by way of additional ground taken and the relevant submission made by the assessee on this additional ground. But he draws our attention to the order of the ld. CIT(A) wherein there is no finding of the ld. CIT(A) on the said additional ground. So, the ld. AR of the assessee in addition to the merits of the case vehemently prayed to decide the legal ground first. In support of the said legal ground the ld. AR of the assessee submitted at bar that though the assessee has requested for the reasons recorded for re-opening which was alleged to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of M/s. K. C. Mercantile Vs. DCIT circle Jaipur wherein the court has heavily supplied emphasis on the decision of the apex court in the case of GKN Driveshaft (I) Ltd., which was followed by the Jaipur bench in the case of Banwari Lal Pareek Vs. ITO in ITA no. 135/JP/2020 wherein the similar issue decided. Based on these the ld. AR of the assessee submitted that the assessment order is required to be quashed on legal grounds. As regards the merits of the case the ld. AR of the assessee submitted that the ld. AO vide show cause notice No. ITBA/AST/F/147/(SCN)2019-20 dated 18/12/2019, required the assessee to explain the source of said cash deposit on or before 19/12/2019 at 5.30 PM. It is seen from this show cause notice that only 1(one) daytime was allowed and it was the first show cause notice by which the assessee was asked to explain the source of cash deposit of Rs. 86,87,000/-. Prior to that, the Id. AO had never asked to explain the source of said cash deposit of Rs. 86,87,000/- except for Rs. 30,50,000/- vide notice u/s 142(1) dated 14/06/2019, with the UCO Bank. Thus, It is clear from the above facts that no sufficient opportunity was allowed to the assessee, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the then accountant of the shop. Original return of income was also found to be filed on the basis of these incomplete ledger accounts, by the then Tax Consultant, wherein total sales of Rs. 28,84,988/-was shown, on the basis of figure of purchases/sales given by the then accountant. Now, after verification of said ledger accounts, and reconciliation of bank account, factual position of these accounts for the F.Y. 2011-12 relevant to the A.Y. 2012- 13 emerges as under: - (a) Total amount of purchases- Rs. 85,11,670/- (b) Total amount of Cash Sales Rs. 1,12,82,838/- (c) Cash Deposit-in UCO Bank account out of cash sales mentioned above-(b) Rs. 86,87,000/- In support of above claim/ details-- Copy of ledger A/c of - (1) Purchase. (2) Sale.(3) Bank account-UCO Bankand (4) Affidavit of the assessee. (5) 7 (Seven) Prescriptionslips of Doctor. (6) Revised Trading Profit and Loss A/C, (7) Revised Computation of Total Incomeare submitted as additionalevidences and for which separate application filed, as perthe provisions ofRule 46 A of the Income Tax Rules, 1962. During reassessment proceedings, the assessee's submission that she had taken loan in cash aggregating to Rs. 26,08,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh deposits of Rs. 25 lakhs from medical business cash sales and balance cash deposit of Rs. 61,87,000/- was treated unexaplained money u/s 69A of the I.T. Act and the order u/s 147 read with section 144 of the Act was passed on 23.12.2019 making addition of Rs. 61,87,000/- u/s 69A of the I.T. Act. Aggrieved with the order of AO dated 23. 12. 2019, the assessee filed appeal before the Id. CIT(A) Before the Id. CIT(A) the assessee submitted that since she was suffering from Neuro disease, she could not explain the source of said cash deposit properly and correctly during the course of assessment proceedings. Hence after filing appeal, in order to ascertain the factual position, deep verification of ledger a/c of sales, purchases and bank was made. Bank account was also reconciled and noted with surprise that the entire sales and purchases not found to be recorded in the ledger a/c of sales and purchase by the then accountant of the shop, Return of income for the year consideration was also found to be flied on the basis of these Incomeplete ledger a/c by the then tax consultant, wherein the total sales of Rs. 28,84,988/-was shown on the basis of figure of purchases/sales given by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng stated at bar stated that no such reasons mentioned by the ld. AO were provided and were also not attached until date. There is no enclosure in the letter uploaded on the portal of the revenue till the date of hearing. This fact were clearly brought to the notice of the ld. CIT(A) at the time of hearing of the first appeal, the CIT(A), although discussed the additional ground and the submission of the assessee on the issue, but there is no finding on the part of the Ld. CIT(A) on that ground for the reason best known. Therefore, he has specifically requested the bench that this ground be decided based on the material already on the Court file. As there is no clear finding from the revenue upon the argument of the assessee before the ld. CIT(A), the bench directed the ld. AR to file an affidavit on this aspect from the assessee and the same is filed on 28.11.2023 and copy of the same was also given to the ld. DR. Till 31st December, 2023 there is no rebuttal on the facts swooned on oath the bench feels that there are merits on arguments advanced by the ld. AR of the assessee. As the action of the revenue not granting the reasons recorded for reopening the case even though the spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d view, the reassessment order in these circumstances of the case, cannot be upheld. For reaching this conclusion, we draw strength from the decision of Hon ble Bombay High Court in the case of CIT vs Videsh Sanchar Nigam Ltd (2012) 340 ITR 66 wherein Hon ble Bombay High Court had categorically held that since the reasons recorded for reopening of the assessment were not furnished to the assessee till the completion of the assessment then reassessment order cannot be upheld and thus dismissed the appeal filed by the Revenue. Even in the case of CIT vs Trend Electronics reported in (2015) 379 ITR 456, Hon ble Bombay High Court has categorically held as under:- Income Tax Act 1961 Section 147 and 148 Reopening of assessment validity of Notice Objections Recording of reasons and furnishing of reasons to be strictly complied with Failure on part of assessee to furnish reasons recorded to assessee when sought for Reassessment not valid Quashed Appeal dismissed. Hon ble Karnataka High Court in the case of Pr.CIT and Another vs V. Ramaiah (ITA No. 451 of 2017 dated 02-07-2018) has held as under:- 8. The decision relied upon by the learned counsel for the Revenue is distinguishable on fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons recorded should be supplied to the assessee and since it is undisputed fact that the same were not supplied we quash the order passed by the ld. AO. Based on these observations of the assessee ground no. 1 1.1 raised by the assessee is allowed. 8. In Ground no. 2, 2.1 and 2.2 the assessee challenged that the addition made in the order of the AO and sustained by the ld. CIT(A) on merits. On this issue the rival contentions were heard but since at the instance of the ld. AR of the assessee we have decided the appeal of the assessee on technical ground and therefore, we feel the grounds raised on merits becomes infructuous and therefore, the same is not adjudicated. 9. In terms of this observation the appeal of the assessee in ITA no. 412/JP/2023. Now we take up the appeal of the assessee in ITA No. 413/JP/2023 10. The brief fact of the case is that the assessee has e-filed his return of income for A.Y 2017-18 on 09.03.2018 declaring total income of Rs. 8,02,300/-. Return was processed u/s 143(1) of the Act by CPC on 16.05.2018. The case was selected for limited Scrutiny through CASS. Notice u/s 143(2) of the Act was issued under digital signature on 09.08.2018 which was tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20/12/2019 the assessee submitted the details showing summary of month wise sales for 2015-16 and 2016-17. As regards the cash deposited during the demonetization the assessee submitted that out of total deposit of Rs. 17,02,500/-, Rs. 7,28,000/- was only the demonetized currency and the rest of the cash was valid circulation money and therefore, that details were also placed on record. The assessee submitted the details of cash on hand in the desired format on the various specific dates. As regards the deposit of money in excess the assessee submitted that the same was due to ignorance of accountant and staff as they had deposited the cash of their sister concern named as Vipin Medicose Prop Sh. Akash Chakravarty in the OD account of Vipin Medicals as the said firm was not having any current account and the parties from whom purchased were made was demanding payments on regular basis. As regards the copy of VAT return, as the assessee was dealing the products taxable on MRP basis and he was not required to pay any tax and due to his negligence she has failed to furnish the vat return for the period under consideration however copy of vat return for the immediate proceeding previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly the AO initiated penalty u/s 271D for violation of section 269SS of the Act. The AO not satisfied with the explanation accepted deposit of Rs. 6000000/- as cash sales and added Rs. Rs. 6755100/- and added balance Rs. 6755100/- as unexplained cash deposit u/s 69A of the Act. 6.1 During the appeal proceedings the appellant filed the written submission which is placed on record. The appellant in its submission has stated that she is suffering from neuro disease and the accountant is maintaining the accounts and records of sale and purchases and at the appellate stage filed a revised working of the sales to accommodate its explanation of the cash deposit of Rs. 12755100/-. To support it the appellant also filed a copy of bank account, revised trading account etc. Further the appellant requested for admitting the additional evidence to support its grounds of appeal. The appellant in its revised working of trading account declared the sales of Rs. 1,7289892/-, purchase of Rs. 13943702/--and a gross profit of Rs. 3127758/- and a net profit of Rs. 1390915/-. 6.2 The submission of the appellant is considered specifically with reference to admission of the additional evidences. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. The appellant at the assessment stage stated that she has received Rs. 3057000/- as cash loan from friends. The following facts emerges that the Total cash deposit is of Rs. 12755100/-, cash sales accepted by AO Rs. 6000000/- and cash loan of Rs. 3057000/-.A total of Rs. [Rs. 12755100- (6000000+3057000)] = Rs. 3698100/- stands unexplained and is added towards unexplained cash credits u/s 69A of the Act. Further the appellant has accepted cash loan of Rs. 3057000/- as cash loan from friends and as stated by the AO that the assessee was not able to prove the creditworthiness of the loans the addition of Rs. 3057000 is treated as unexplained cash credit u/s 69A of the Act and The AO is correct in initiating penalty u/s 271D of the Act for violating the provisions of section 269SS of the Act. The ground of appeal is dismissed. 16. Feeling dissatisfied with the above finding of the ld. CIT(A) the assessee prefers the present appeal on the grounds as reiterated here in above. Apropos to the grounds so raised the ld. AR of the assessee relied upon the written submission filed before the ld. CIT(A) and vehemently argued that Since the assessee was suffering from Neuro disease she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons, during the year under consideration. While, in fact, no such loan was taken. In support of this contention the assessee filed an affidavit. As regards, cash deposited in demonetization period it is submitted that cash amounting to Rs. 17,02,500/- was deposited during demonetization period, out of which old currency was Rs. 7,28,000/- only. Details of old currency is attached was placed on record. Further, it is submitted that entire cash totaling to Rs. 1,28,69,720/- was deposited (as mentioned on Page-2) in the UCO bank accounts and account of Bank of India, out of cash sale proceeds of the medicines, which is Rs. 1,72,89,892/- as mentioned above. 17. In support of the contentions so raised the ld. AR of the assessee filed a detailed paper book containing the following document / submission / evidence: 18. The ld DR is heard who has relied on the findings of the lower authorities and submitted written submission in support of the contention of the revenue. The written submission is reiterated here in below: Subject: Appellate proceedings in the case of Monika Chakarvarty, ITA 413/JPR/2023, AY-2017-18- reg.- In this case, the assessee has e-filed his return of income for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 67,55,100/- was treated unexaplained money u/s 69A of the I.T. Act and the order u/s 143(3) was passed on 27.12.2019 making addition of Rs. 67,55,100/- u/s 69A of the act. Aggrieved with the order of AO dated 27.12.2019, the assessee filed appeal before the Id. CIT(A). Before the Id, CIT(A), the assessee submitted that since she was suffering from Neuro disease, she could not explain the source of said cash deposit properly and correctly during the course of assessement proceedings, which resulted in addition of Rs. 67 ,55,100/. u/s 69A of the I.T. Act, hence filing appeal. In order to aseratin the factual postion, the deep verification of ledger a/c of sales, purchases and bank was made. Bank account was also reconciled and noted that the entire sales and purchases not found to be recorded in the ledger a/c of sales and purchases by the then accountant of the shop. Return of income for the year consideration was also found to be filed on the basis of these incomeplete ledger a/c by the then tax consultant, wherein the total sales of Rs. 70,18,942/ was shown on the basis of figure of purchases/sales given by then accountant. Further the assessee stated that the turnover decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the husband of the assessee, she is running a retail medical shop at Nayapura, Kota. Even the assessee is suffering from Neuro disease. The return of income has been filed generally by the consultant who, based on the information given by the Munim / accountant files the income tax return. Since the assessee is exempt from payment of VAT, the turnover was not cross verified and the details submitted in the assessment proceedings were incorrectly given, far from the truth. In fact, the assessee filed an affidavit that the explanation and the return furnished was without her knowledge and she totally relied on the experts. During the first appellate proceedings the assessee on being aware brought on record the correct state of affairs wherein she contended that the total purchases made by her for an amount of Rs. 1,39,43,702/- and the sales for an amount of Rs. 1,72,89,892/-. The assessee has submitted various details before the first appellate authority as an additional evidence and the additional evidence consist of following documents. Revised Trading Profit and Loss A/c. Revised Computation of Total Income. Revised monthly summary of cash available for the F.Y. 2016-17. Affi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was raised as to why this substantive error and at that time she has said that there is a substantive error on the part of the accountant and she has declared all the material facts related to the explanation of the cash deposited into bank account by way of filing the revised document as stated herein above which is supported by an affidavit. We find force in the arguments because the assessee is earning income from this only source of income and fighting for survival even though she has medical challenges for her health. We are aware that the assessee has not sincerely filed the return of income and has solely relied upon the accountant who has declared the turnover incorrectly. Though it was not correct state of affairs of the assessee and was wrongly declared by her accountant as confirmed by the assessee in her affidavit and supporting evidence. Even the assessee is dependent on the employee due to her neuron disease. Based on those facts we are of the considered view that the turnover of the assessee reflected in the bank account cannot be considered partly loan amount and partly turnover. Therefore, considering that fact placed before us by the assessee in person as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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