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TMI Blog2023 (9) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... les and purchases. AO s conclusion is that there are huge deposits in the bank account during demonetization period and the assessee could not explain such deposits. Assessee has ampty demonstrated with evidences that the cash sales and the cash deposits during FYs 2015-16 and 2016-17 were almost same and there is only a minimal increase in cash deposits during the FY 2016-17 relevant to the AY 2017-18. CIT(A) has passed a well reasoned order considering all the submissions of the assessee and the averments of the AO. As decided in Hirapanna Jewellers [ 2021 (5) TMI 447 - ITAT VISAKHAPATNAM ] since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. No merit in the impugned addition and the same has been rightly deleted by the CIT(A) by proper appreciation of facts, therefore, we decline to interfere with the finding of the CIT(A). Appeal filed by Revenue is dismissed. - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER For the Revenue : Shri Vivek Kumar Upadhyay, Sr. DR For the Assessee : Shri Gaurav Jain, Adv. and Ms. Shweta Bansal, CA ORDER PER N.K. BILLA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of cash generated and deposited during the relevant years. The appellant has also submitted the comparative details of purchases, sales, and stock position during the relevant period. The appellant had also submitted copies of VAT returns along with the reconciliation of turnover. However, the Assessing Officer was not satisfied with the details submitted by the appellant and has made the addition of Rs. 3,41,86,500/- u/s 68 of the IT Act, 1961. The provisions of Section 68 can be applicable where any sum is found credited in the books of the assessee and the assessee offers no explanation about the nature and source of the same or the explanation offered by the assessee is not satisfactory in the opinion of the Assessing Officer. In the instant case, the Assessing Officer did not believe in the explanation filed by the assessee in respect of the Cash Deposits made by the assessee. But the Assessing Officer has not discharged the onus of proving how the submission made by the assessee is not satisfactory. The case of the Assessing Officer is on a very weak footing and is based on conjectures and surmises. If the Assessing Officer is not satisfied with the submission made by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee manipulated its books of account to show inflated cash sales during the demonetization period to justify the cash deposit. In fact there is not even a single finding by the AO that the purchases were inflated to show inflated sales to cover up the cash deposit in the bank during the demonetization period. 7. It was observed that the AO did not point out any defects in the books of account, no discrepancies were found in the stocks, sales and purchases. The AO s conclusion is that there are huge deposits in the bank account during demonetization period and the assessee could not explain such deposits. The assessee has ampty demonstrated with evidences that the cash sales and the cash deposits during FYs 2015-16 and 2016-17 were almost same and there is only a minimal increase in cash deposits during the FY 2016-17 relevant to the AY 2017-18. The Ld. CIT(A) has passed a well reasoned order considering all the submissions of the assessee and the averments of the AO. 7.1 We further observed that the Vishakhapatnam Bench of the Tribunal in the case of ACIT vs. Hirapanna Jewellers (189 ITD 608) held as under: - Purchases, sales and the Stock are interlinked and insepar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs such as The Tribune, The Hindu etc. It is observed from the newspaper clippings that there was undue rush in various jewellery shops immediately after announcement of demonetization through the country, (para 7.2) In view of the foregoing discussion and taking into consideration of all the facts and the circumstances of the case', we have no hesitation to hold that the cash receipts represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to effect the sales and we do not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of Hon ble Delhi High Court in the case of Kailash Jewellery House (supra) and the Hon'ble Gujarat High Court in the case of Visha/ Exports Overseas Ltd. (supra), Hence, we do not see any reason to interfere with the order of the Ld. CU(A) and the same is upheld, (para 9) 7.2 In the case of Smt. Charu Aggarwal vs. CIT (140 taxmann.com 588) the Chandigarh Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar issue the ITAT Chandigarh Third Member Bench in the case of Bansal Rice Mills (supra) held that since the sales proceeds have already been accounted for in the trading account no addition could be sustained even if the said deposits could be treated as bogus sales as complete stock tally was there . 10.5 In the present case also the assessee was maintaining complete stock tally, the sales were recorded in the regular books of accounts and the amount was deposited in the bank account out of the sale proceeds, therefore, the addition made by the AO and sustained by the Ld. CIT(A) was not justified. 10.8 Similarly the Hon'ble Patna High Court in the case of Lakshmi Rice Mills (supra) held as under: It is a fundamental principle governing the taxation of any undisclosed income or secreted profits that the income or the profits as such must find sufficient explanation at the hands of the assessee. If the balance at hand on the relevant date is sufficient to cover the value of the high denomination notes subsequently demonetised and even more\ in the absence of any finding that the books of account of the assessee were not genuine, the source of income is well disclosed and it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid tender. Since the sale proceeds for which cash was received from the customers was already admitted as income and if the cash deposits are added under section 68 of the Act that will amount to double taxation once as sales and again as unexplained cash credit which is against the principles of taxation. It is also on record that the assessee was having only one source of income from trading in beedi, tea power and pan masala and therefore provisions of section 115BBE of the Act will have no application so as to treat the income of the assessee as income from other sources. Hon'ble Kolkata Tribunal in the case of Associated Transport (P.) Ltd. (supra) on identical facts took the view that when cash sales are admitted and income from sales are declared as income, wherein the Hon'ble Tribunal found that the assessee had sufficient cash in hand in the books of account of the assessee, that there was no reason to treat the cash deposits as income from undisclosed sources. The Hon'ble Vishakapatnam Tribunal in the case of Hirapanna Jewellers (supra) on identical facts held that when cash receipts represent the sales which the assessee has offered for taxation and when tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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