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TMI Blog2024 (7) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... m Agricultural University, Dantiwada, and the source of advances are from these activities. These aspects were not considered by any of the authorities below and simply additions were confirmed. Similar observations are there with respect to the other loans raised by the assessee company wherein the authorities below have not considered the contentions of the assessee. With respect to cash deposits made in the bank, the assessee has claimed same to be cash sales of seeds. The assessee has filed ledger accounts, but the assessee has not filed conclusive evidence to prove that these purchase and sale of seeds has taken place and that the assessee in the business of trading of seeds. These aspects requires further verification by authorities below as the evidence filed are also not considered. Similarly for purchase of seeds, the assessee has claimed that the payments have been made in cash. AO has disallowed purchases to the tune of 10%. The assessee has filed additional evidences before the CIT(A) and has also filed certain additional evidence before the Tribunal . CIT(A) has not called for remand report from the AO on these additional evidences which led to breach of Rule 46A, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Order that the activity of the appellant's company is agricultural activity which is not correct. The appellant submits that the appellant company is doing the business of developing the seeds of different varieties and doing the trading activity in the same items. [4] The appellant therefore requests your goodself to kindly delete the above mentioned additions made by the Ld. A. O. looking to the merits of the case. [5] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 3. The brief facts of the case are that the assessee has not filed return of income for assessment year 2012-13. The assessment was re-opened on the basis of information from Non-filers Monitoring System(NMS) , that the assessee has deposited cash of Rs. 6 lakhs in its bank account maintained with the HDFC Bank, and after obtaining required statutory approvals and recording reasons. Notice u/s 148 dated 22.03.2019 was issued by the AO to the assessee which was claimed by the AO to have been duly served on the assessee, requiring the assessee to file return of income within 30 days from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned bank statement from the HDFC Bank directly u/s. 133(6) of the Act, and the assessee was asked to explain the aforesaid credits. The AO observed that in reply dated 11.11.2019 filed by the assessee , the assessee has not made any submissions to explain nature and source of credit entries and cash deposits in the bank account. The AO observed that the assessee in his submission has enclosed ledger account of 91 persons to whom the goods have been sold for total of Rs. 5,58,908/- as reported in P L account. All the sales are shown to have been made in cash, all the accounts are squared up during the year under consideration. The Assessing Officer observed that in the ledger accounts, names of certain persons are shown, and the ledger accounts are computer generated and does not bear any signature or initials. The Assessing Officer observed that in cash sales, ledger are not prepared. Only bills are given which are entered in the sale register. The Assessing Officer observed that that these sales are not genuine representing cash sales for explanation of cash deposit in the bank account. The Assessing Officer also observed that most of the purchases are made in cash by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 , which also shows share capital as on 31March, 2011 of Nil . Thus, the AO concluded that share capital of Rs. 1,00,000/- was introduced during the year under consideration. The AO also observed that the assessee has not discharged its burden to explain the source of sum credited in the books of account. The Assessing Officer invoked provisions of section 68, and share capital of Rs. 1,00,000/- found credited in the books of accounts of the assessee were added by the Assessing Officer as unexplained cash credit u/s. 68 of the Act. 3.5 The Assessing Officer further observed from the Profit and Loss Account that the assessee has claimed purchases of stock in trade of Rs. 5,28,516/- , and in the absence of required detail, the Assessing Officer show caused the assessee as to why 10% of the purchase should not be disallowed , and added to the income of the assessee. The assessee submitted ledger account in support of purchases, and submitted some of the purchases bills. The said bills reflected that the purchases were made in cash. The assessee could not furnish complete details regarding purchases expenses , and the AO made additions to the income of the assessee to tune of 10% of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the accounts were prepared from 16th March 2011 to 31st March 2012, the balance as of 31.03.2011 was shown as Nil . The assessee submitted copy of shareholder ledger, copy of cash book and company status in MCA. The assessee submitted that in MCA web site online, the share capital is shown as Rs. 1,00,000/-. The assessee also filed certain additional evidences before the CIT(A) as under:- The Acknowledgement for F.Y.2011-12 Copy of Profit and Loss A/c and Balance Sheet Copy of Bank Statement of HDFC Bank with their ledger copy Copy of Audit Report for F. Y.2011-12 Ledger copies of Debtors, Creditors Xerox Copies of Sales and purchase bills Copy of Cash book The assessee also submitted following documents before ld. CIT(A) as additional evidences, as under: Copy of bills of purchase and sales along with Cash Book for F.Y. 2011-12 Acknowledgement of return of income along with computation of income Copy of Profit and Loss A/c, Balance Sheet The CIT(A) dismissed the appeal of the assessee by holding as under:- 5. Decision: In this case, the first ground raised by the appellant is addition worth Rs. 14,75,000/- The Assessing Officer has added Rs. 8,08,500/- u/s 68 of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditworthiness is not proved in absence of bank statement of these parties regarding deposit made in the bank account. All the loan confirmations look manufactured and fabricated. Hence, the Assessing Officer is justified in making addition of all the three loans u/s 68 of the Income Tax Act, 1961. Hence, the first ground of the appellant of Rs. 14,75,000/- is dismissed, and the addition of the Assessing Officer is confirmed. 5.6 Second ground is addition of Rs. 1,00,000/- as share capital addition u/s 68 of the Income Tax Act, 1961. The appellant did not submit any details and hence the Assessing Officer made the addition. 5.7 Now before me in the appellate proceedings the names of two persons Arpankumar G Judal and Hijaben A. Judal contributing Rs. 50,000/- each have been filed. No bank details and creditworthiness have been fled. Relying upon the decision of the Hon'ble Delhi High Court, in the case of M/s N.R. Portfolio Vs. PCIT (Delhi) which has been approved by Hon'ble Supreme Court the, addition on account of share capital worth Rs. 1,00,000/- u/s 68 of the Income Tax Act 1961 is confirmed. 5.8 Third ground is addition of 10% worth Rs 52,852/- on account of cash sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, and dismissed the appeal of the assessee. It was submitted that all the purchases/sales were made in cash. It was also submitted that chart showing break up of cash deposit source (PB/page 27-28) are filed as additional evidence before ITAT. The ld. Departmental Representative on the other hand relied upon the order of the ld. CIT(A) and submitted that no purchase/sale were made by way of banking transactions. All the transactions were made in cash and the books of accounts are just manipulated to get out of the clutches of the taxes. The assessee has never filed return of income u/s. 139(1) of the Act. Prayer was made to uphold the order of CIT(A). On being asked by the Bench, the ld. counsel for the assessee submitted that there are no registrations of the assessee with VAT/GST or other government regulatory authorities which could substantiate that the assessee is engaged in the business of trading of seeds. 6. I have considered rival contentions and perused the material on record. I have observed that the assessee company was incorporated on 16th March, 2011 and the first audited accounts were prepared from 16th March, 2011 to 31st March, 2012, and there is no bar in prepari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has not filed conclusive evidence to prove that these purchase and sale of seeds has taken place and that the assessee in the business of trading of seeds. These aspects requires further verification by authorities below as the evidence filed are also not considered. Similarly for purchase of seeds of Rs. 5,28,516/-, the assessee has claimed that the payments have been made in cash. The Assessing Officer has disallowed purchases to the tune of 10%. The assessee has filed additional evidences before the CIT(A) and has also filed certain additional evidence before the Tribunal . The CIT(A) has not called for remand report from the AO on these additional evidences which led to breach of Rule 46A, and the ld. CIT(A) has also have not given his decision whether the additional evidences are to be admitted or not. The additional evidences were also filed before us. Under these circumstances, keeping in view facts and circumstances of the case, I am of the considered view that in the interest of justice, the entire matter wrt all the additions made by the AO and as confirmed by ld. CIT(A), needs to be set aside to the file of Assessing Officer for de-novo assessment. The Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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