9911796707
TMI Blog2023 (4) TMI 1340X X X X Extracts X X X X X X X X Extracts X X X X ..... two current bank accounts from 9th November, 2016 till 25th November, 2016 Rs. 52.50 Lakh in demonetized currency notes of Rs. 500 1000, and the balance Rs. 4,05,000/- in non-demonetized currency/new currency. Similarly, the assessee deposited Rs. 35,70,000 in the two bank accounts in the Month of December 2016 only in non-demonetized currency out of cash sales/realization from trade debtors in the months of November and December 2016. All these figures were duly established by the assessee by furnishing details of sales, purchases along with complete cash book and bank accounts as duly supported by the quantitative tally of stock in the tax audit report during the course of assessment proceedings and the Assessing officer had also accepted the trading results declared by the assessee as he could not point out any defect in the figures. However, despite having accepted the books of account and the trading results, the Assessing Officer still took a detour from the well-established accounting and legal norms, by adding the cash (received by the assessee on account of realizations made from trade debtors and out of cash sales) deposited in the bank again to the income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... response to the statutory notices, whereas without the response of the assessee, it was not possible for the AO to have accepted the cash deposits for the whole assessment year excluding the demonetization period. In fact, no defect was pointed out by the AO in the details furnished by the assessee, particularly when the Cash Book and the Sale Book clearly reflected the cash deposits in the bank which were covered in the audited financial statements of the assessee. Therefore, from the above discussion, it is clearly evident that the ld. CIT (A) has gone wrong in confirming the addition wrongly made by the AO. The order under appeal is, found to be a result of complete misreading and non-reading of material and cogent unrebutted documentary evidence brought on record before the AO and reiterated before the ld. CIT(A). The impugned order is, therefore, reversed and the addition confirmed by the ld. CIT (A) is cancelled - Decided in favour of assessee. - Shri A.D. Jain, Vice President And Shri Vikram Singh Yadav, Accountant Member For the Assessee : Shri S. Krishnan, Advocate Shri Rajnish Aggarwal, CA. For the Revenue : Shri Dharam Vir, JCIT, Sr. DR. ORDER PER A.D. JAIN, VICE PRES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee did not wish to come forward and say anything in the matter or he had no explanation to offer in support of his claim. In view of the aforementioned facts on record, the Assessing Officer completed the assessment proceedings as ex-parte u/s 144(1)(b) of the Income Tax Act. In order to complete the assessment, the bank accounts of the assessee were analyzed and it was found that the following cash deposits had been made in the year under consideration, i.e., during the Financial Year 2016-17 (relevant to assessment year 2017-18): Sr. No. Bank Name Account No. Name of the Account Total cash deposits from 9th Nov to 13st Dec 1. HDFC Bank 50200021780231 Ashok Kumar Gupta 72,95,000/- 2. HDFC Bank 13202320000562 -do- 1500,000/- Total 87,95,000/- 4.2 From the data on record, the AO observed that the assessee had been filing ITR-1 prior to A.Y 2017-18. Also, the assessee had failed to file complete information as was called vide notices u/s 142(1). The AO observed that thus, it was reasonably possible that left with no other option, the assessee had deposited his unaccounted money in his bank account during the demonetization. 4.3 The AO observed that The Hon'ble Supreme Court, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods. The appellant submitted that it had got turnover of Rs. 11.65. crores. The appellant has stated that cash deposits is out of kirana cash sales. The appellant has provided the monthly deposit table of cash. On perusal of the table it is seen that the cash has deposited in various months is around Rs. 18 lakhs to Rs. 30 lakhs, but in October and November the appellant had deposited Rs. 44,67,266/- and Rs. 66,90J38/-.The appellant had not provided any reason of rise in sales in October and November. Hence it is clear that the appellant had deposited cash from undisclosed sources in the month of October and November. Hence I agree with the contention of the Assessing Officer that cash deposited worth Rs. 87,95,000/- during demonetization period is from undisclosed sources. Hence the addition of the Assessing Officer is confirmed and appeal of the appellant is dismissed. 6. The ld. Counsel for the assessee has contended that the Ld. CIT(Appeals) has erred in passing a non-speaking order in a summary manner by confirming the addition of Rs. 87,95,000/- made on account of cash deposited in the current bank accounts of the assessee without distinguishing between the demonetized and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(Appeals), NFAC has erred in confirming the addition made by the Assessing Officer wrongly applying the ratio of the Hon'ble Supreme Court's decision in the case of Smt. Srilekha Banerjee and others Vs CIT, Bihar Orissa , 1964 AIR 697 which is arbitrary, unjustified, illegal, invalid 8s bad in law. 7. The ld. DR, on the other hand, has placed strong reliance on the impugned order. 8. It has been contended that the assessee has not been able to rebut the categorical finding of the ld. CIT (A) that the assessee had deposited cash from undisclosed sources in the months of October and November, since the assessee has remained unable to provide any reason for the rise in sales in six months. 8.1 We have heard the parties and have perused the material on record. The question is as to whether there is a reason provided by the assessee for the rise in sales in the months of October and November. The details of monthly cash deposited by the assessee in the year under consideration have been tabulated as follows : Financial Year 2016-17 Cash Deposited in bank out of realization from trade debtors and cash sales (Rs.) Remarks (Mode of Deposit) April, 2016 27,03,124 Old Cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r still took a detour from the well-established accounting and legal norms, by adding the cash (received by the assessee on account of realizations made from trade debtors and out of cash sales) deposited in the bank again to the income of the assessee as 'unexplained credits' under section 68 in total disregard of the fact that an amount cannot be considered twice in computing the income. Moreover, it was not understandable as to how the cash deposited out of realizations made from trade debtors and cash sales, both recorded in the books of account and, thereafter, deposited in bank accounts, can be treated as 'unexplained cash credit under section 68 of the Act. Thereby, the addition made u/s 68 in respect of unexplained cash credits is indeed illegal, bad in law and void-ab-initio as rightly alleged. The addition deserved to be knocked down on this ground itself. 8.6 It is a trite law that when the reliability of books is not in question and all the transactions including sales and purchases and the ensuing effect of this trading have been accepted, then the embedded facets flowing from the trading transitions -generation, retention rotation of funds- can also not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following circumstances:- 1. Where the Assessing Officer has refused to admit evidence which ought to have been admitted; or 2. Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the- Assessing Officer; or 3. Where the appellant was prevented by sufficient cause from producing the Assessing Officer and evidence which is relevant to any ground of appeal; or 4. Where the Assessing Officer has made the order appealed against without giving the sufficient opportunity to the appellant to adduce evidence relevant to any group of appeal. Keeping in view the above facts of the case, it is evident that the additional evidence submitted by the assessee does not fall under any category as mentioned under Rule 46A and as such the additional evidence as claimed by the assessee at this stage of appeal is not acceptable. However, the brief facts and comments are submitted herewith on merits. Brief facts of the case are as under- Considering the facts of the case and materials in shape of notices issued by the department and submissions given by the assessee during assessment proceedings as well as before the Appellate Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove, it is clear that the evidences/statement submitted by the assessee may not be considered at this stage as the assessee was allowed sufficient opportunities to adduce necessary evidence but all in vain. The evidences/replies filed by the assessee may not be considered. Keeping in view the facts above, it is request that the documents/replies submitted by the assessee may not be entertained in view of the provision of Rule 46A of I.T. Rules. However, the appeal of the assessee maybe decided on merits. Assessee's Rejoinder to the AO s Remand Report On the captioned subject we wish to submit as under: That the assessment for A.Y. 2017-18 was completed by the Id. Income Tax Officer, Ward-11(2), Ludhiana vide order u/s 144 dated 10-12-2019 by making additions to the returned income of Rs. 450180/- as detailed below: (i) Addition of Rs. 8795000/- u/s 68 on account of cash deposits in current account. That the addition of Rs. 8795000/- has been made without any basis, without recording any concrete facts or material evidence on file, without pointing any defects in sales and books of accounts of the assessee, without considering assessee's submissions evidence on record, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore him, i.e., the AO, during the assessment proceedings. In the Rejoinder to the Remand Report, the assessee categorically stated that there might be difference in presentation, of the details and documents submitted in the appeal were already submitted before the AO by the assessee during the assessment proceedings; that the assessee submitted his response and details on the online portal 6/7 times during the assessment proceedings; that this included the complete business details of the assessee, Cash Book, Purchase Book, Sales Book, Bank Statements, Expense Accounts, Unsecured Loan Accounts, Debtors-Creditors Accounts, GP Rate Comparative Data, written submissions and other details. It was stated that copies of the relevant screen shots from the online portal, supporting the contentions of the assessee were annexed while filing the appeal before the ld. CIT(A). It was stated that the AO failed to report as to in what manner all these details were incomplete and inconclusive; and that again, in the Remand Report, the AO had not been able to establish as to in what manner, these details contributed as additional evidence. The assessee stated that the submissions made by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order was a result of merely presumption and oversight of details; and that the assessment order was passed in a hurried fashion, without considering the facts and details on the file. 10.1 The assessee stated that he had duly submitted his Cash Book for the whole Financial Year in response before the AO in the assessment proceedings; that the AO had accepted the cash deposits for the whole Financial Year, excluding the demonetization period without pointing out any defect; that the AO had also failed to mention as to what other sort of explanation was desired, apart from the submissions made by the assessee, as the Cash Book and the Sale Book amply reflected that the cash deposits in the bank were already covered in the audited financial statements; that in appeal, the assessee had submitted the very same cash flows as were available on the file during the assessment proceedings, in the form of cash book and there was no new evidence which was being submitted in the appeal. 10.2 The assessee further stated that the AO had observed that it was reasonably possible that left with no other option, the assessee had deposited his unaccounted money in his bank account during the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in response to the statutory notices, whereas without the response of the assessee, it was not possible for the AO to have accepted the cash deposits for the whole assessment year excluding the demonetization period. In fact, no defect was pointed out by the AO in the details furnished by the assessee, particularly when the Cash Book and the Sale Book clearly reflected the cash deposits in the bank which were covered in the audited financial statements of the assessee. 12. Therefore, from the above discussion, it is clearly evident that the ld. CIT (A) has gone wrong in confirming the addition wrongly made by the AO. 13. In this regard, on a similar matrix of facts, the Hon'ble Delhi High Court, in the case of Pr. CIT (Central 3) Vs. Agson Global Pvt. Ltd. (ITA 68/2021 CM NO (9319/2021), by its decision dated 19.01.2022, in para 17.6 on page 46 of the judgement, held as under: Para 17.6 Having regard to the extensive material which has been examined by the Tribunal, in particular, the trend of cash sales and corresponding cash deposited by the assessee with earlier years, we are of the view that there was nothing placed on record which could have persuaded the Tribunal to concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order is simply a product of surmises and conjectures not backed by any evidence which could dislodge the preponderant documentary evidence brought on record by the assessee to explain the sources of the cash and it is, therefore only a perverse finding. 14.1 Then, the addition of Rs. 87.95 Lakh made is also otherwise not factually correct. As seen from the summery of cash deposits, out of realization from trade debtors / cash sales, the assessee has made cash deposits in his two bank accounts totalling to Rs. 66,90,738 in November 2016 and Rs. 35,70,000 in December 2016. 14.2 Further, the assessee deposited cash from 9th November till 18th November 2016 amounting to Rs. 52,50,000/-, comprising of demonetized currency, as seen from the summery given on pages 8 to 9 of the paper book. After that, the cash deposit comprises only of non- demonetized currency/new currency. Therefore, the addition made in respect of cash of Rs. 35,70,000/- deposited during the month of December 2016 is to be excluded from the addition of Rs. 87,95,000/- made by the Assessing Officer for the alleged unexplained cash deposited during the demonetization period from 9th November till 31st December 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
