9911796707
TMI Blog2024 (6) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness by the assessee-firm, is found to be explained and therefore we hold that the lower authorities were unjustified in assessing these sale proceeds as unexplained cash credit u/s 68 of the Act. Accordingly, the addition made u/s 68 of the Act is hereby deleted and the grounds of appeal raised by the assessee stands allowed. - SHRI ABY T. VARKEY, JM AND SHRI AMARJIT SINGH, AM For the Appellant : Shri Piyush Chhajed For the Respondent : Shri H. M. Bhatt (Sr. AR) ORDER PER ABY T. VARKEY, JM: 1. This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-51, Mumbai dated 31.05.2023 for the assessment year 2017-18. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) confirming the addition of Rs. 5,72,90,000/- u/s 68 of the Income Tax Act, 1961 (hereinafter the Act ). 3. Brief facts as noted by the AO are that the assessee is a partnership firm, which has been engaged in the business of retailing gold and other precious jewellery since November 2014. The AO has noted that there were no sales in the year ended 31st March 2015 and that the assessee firm had filed its Profit and Loss Account and Balance She ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal before the Ld. CIT(A) who confirmed the action of the AO. Now the assessee is in appeal before us. 4. We have heard both the parties and perused the material placed before us. The admitted and uncontroverted facts before us is that the assessee firm is engaged in the business of retail trading of gold and jewellery. During the relevant year, the assessee had achieved sales turnover in this business of Rs. 1334.63 lacs which inter-alia comprised of receipts of Rs. 572.90 lacs whose proceeds were deposited during the demonetization period. These sales are found recorded in the sales register, stock register, cashbook etc. The impugned sum also formed part of the overall sales credited in the P L A/c and offered for taxation under the Business Income . It is noted that the AO has tabulated the stock movement details along with details of sales and it is not in dispute that the movement of stock fully reconciles with the reported sale proceeds which were later on deposited during the demonetization period. It is also noted that the assessee had credited the sale proceeds to its Profit Loss Account and offered the same to tax. The AO is however noted to have only casted aspersi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AR pointed out that the appellant had not furnished such details in relation to its entire sales of Rs. 1334.63 lacs and therefore the AO s action of selectively picking, choosing and disbelieving only those sales whose proceeds were deposited during the demonetization period was completely arbitrary. The Ld. AR reiterated that, the assessee firm was engaged in retail trading of gold and precious jewellery and therefore by its very nature of retail trade, the sales were made to flying customers over the counter for which cash memos/sale bills were issued, for which complete details of customers were not required to be taken, as none of these over-the-counter sales were on credit. He further brought to our notice that, Rule 114B of the Income Tax Rules, 1962 also required obtaining the PAN of only those customers to whom sales per transaction exceeded Rs. 2,00,000/-. It is noted that similar limit had been set out in Rule 114E of the Income Tax Rules, 1962. The Ld. AR showed us that, the sale made by the assessee firm did not exceed Rs. 2,00,000/- per customer and therefore it was not required to maintain the relevant KYC details of such customers to whom sales were made, in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and misplaced on the given facts of the present case, particularly to make the impugned addition u/s 68 of the Act. He submitted that, the burden cast on an assessee u/s 68 of the Act, is to substantiate the nature and course of credits found in the books of accounts, and the amount in dispute before us is Rs. 572.90 lacs. The Ld. AR explained to us that, the assessee at all times had maintained that the source of credit entries in the cash book was the proceeds received from sales, which in turn was deposited into the bank account and the same was reflected by way of debit entries in the cashbook. As noted by us above, the stock movement as well as the purchases made by the assessee firm are not in doubt. It is not the case of the Revenue that the assessee did not hold the stock in its books at the end of September 2016, out of which sales were made in the month of October 2016 to the tune of Rs. 572.90 lacs. Also, the corresponding purchases out of which these sales were made have not been doubted or questioned by the AO. It was also brought to our notice that a survey action u/s 133A of the Act was conducted upon the assessee firm on 27.03.2017 and no adverse material / findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
