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TMI Blog2024 (4) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... our view that once the assessee has discharged their initial burden, the onus shifts on the Assessing officer to prove it otherwise. AO has not investigated the facts and only doubted the cash deposited. In our considered view, when the purchase of assessee was of the Act doubted and books of assessee was of the Act rejected, the component of sales in cash cannot be rejected. However, in order to avoid the possibility of revenue leakage, in our view, a reasonable disallowance out of total cash deposits would meet the ends of justice, therefore, taking a consistent view as has been taken in other cases, in our view, 10% of alleged cash deposit/addition would be reasonable to avoid the possibility of revenue leakage. In the result, ground No. 1 of appeal is partly allowed. Taxing the addition at a rate of 77.25% under Section 115BBE - As we have deleted the substantial part of addition by treating the cash generated on business transactions, therefore, the additions sustained by assessee would not be liable to tax at the enhanced rate under Section 115BBE. Grounds No. 2 and 3 of appeal are allowed. - SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 359 SBI Bank 2,74,000 052050031749 United Bank of India 12,65,000 Total 86,46,000 3. On the basis of aforesaid details, the assessee was asked to furnish the details of cash deposits and source thereof. If the cash is received on sales, the assessee was asked to provide details of purchases of items and sold in cash including quality, quantity, GIA/IGI certificate to substantiate the cash deposits. The assessee filed its reply dated 13/12/2019. The assessee explained account-wise details in the following manner: 4. On the basis of aforesaid details, the assessee further submitted following bank accounts shown in the show cause do not belong to assessee as under: Name of Bank Account No. Deposited Amount A/c Holder Name UCO Bank 5290210000229 19,55,000 Adil Exports Pvt. Ltd. UCO Bank 2660200033164 9,70,000 Adil Exports Pvt. Ltd. Indusind Bank 200000191671 18,62,000 Adil Exports Pvt. Ltd. Total 47,87,000/- Thus, the assessee explained that they have made deposit of Rs. 33,09,333/- during demonetization period. The assessee also furnished the details of cash withdrawal from various branches of UCO Bank, Mumbai and Surat of Rs. 2,95,000/- and also explained the opening cash balance as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice regarding three bank accounts which belonged to Adil Exports Pvt. Ltd wherein a cash deposit of Rs. 47,87,300/- was included in assessee s account. Further another excess amount of Rs. 5,45,000/- was included by Assessing Officer on account of duplication of data. Such mistakes were accepted by Assessing Officer and addition to that extent were not made. However, the Assessing Officer has not considered the reply of assessee with regard to cash deposit during demonetization period and added Rs. 29,66,983/-. The assessee is maintaining books of account which includes purchase register, sales register, stock register, ledger, day book and bank book. No specific defects or irregularity was recorded by Assessing Officer. The assessee furnished details of purchase alongiwth names of parties, PAN, their addresses, ledger accounts, account confirmation, type of diamond purchases and sample copies of purchase invoices. The assessee also furnished details of sales alongwith names of parties, their address, ledger account and types of diamonds sold and the cash sales details. The assessee also furnished statement of month-wise quantitative details of diamonds. The assessee als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicate entry and withdrawal were not added. The ld. CIT(A) also held that the assessee has not discharged onus on of three conditions of Section 68 of the Act. The ld. CIT(A) failed to appreciate the fact on a proper prospective and proceeded in a different way while confirming the action of Assessing Officer. The ld. AR of the assessee submits that the Hon'ble Apex Court in Sreelekha Banerjee Vs CIT (1963) 49 ITR 112 (SC) while considering the issue related with demonetized currency held that in cases of high denomination notes, where the business and the state of accounts and dealings of the assessee justify a reasonable inference that he might have for convenience kept the whole or a part of a particular sum in high denomination notes, the assessee prima facie discharged his initial burden when he proved the balance and that it might reasonably have been kept in high denomination notes. The department either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession. The departmental cannot reject it unreasonably a good explanation, converting a good proof into no proof. The ld. AR of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer. Further the sales of assessee is also not in dispute. In our considered view when the nature and activities of assessee was not in dispute nor against the explanation and the evidences furnished by assessee, the Assessing Officer has brought any adverse material to justify in his action in treating the entire cash deposit as unaccounted income. We find merit in the submission of ld. AR of assessee that business and state of accounts and dealing of assessee is justified, reasonable inference that for smooth and convenience, the assessee could kept the part of sale proceed in a high denomination notes. We further find that by furnishing all the details, the assessee has prima facie discharged their initial burden. The assessing officer while making additions made a general observation that required details were not furnished. in our view that once the assessee has discharged their initial burden, the onus shifts on the Assessing officer to prove it otherwise. 11. We find that the Assessing Officer has not investigated the facts and only doubted the cash deposited. In our considered view, when the purchase of assessee was of the Act doubted and books of assessee was o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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