9911796707
TMI Blog2022 (9) TMI 1606X X X X Extracts X X X X X X X X Extracts X X X X ..... ary suspicion of back dating of cash and is or fictitious sales. The instruction is also suggested some indicators for suspicion of back dating of cash else or fictitious sales where there is an abnormal jump in the cases during the period November to December 2016 as compared to earlier year. It also suggests that, abnormal jump in percentage of cash trails to on identifiable persons as compared to earlier histories will also give some indication for suspicion. Non-availability of stock or attempts to inflate stock by introducing fictitious purchases is also some indication for suspicion of fictitious sales. Transfer of deposit of cash to another account or entity, which is not in line with the earlier history. Therefore, it is important to examine whether the case of the assessee falls into any of the above parameters are not. Assessee is directed to establish all relevant details to substantiate its claim in line with the above applicable instructions. We are aware of the fact that not every deposit during the demonetisation period would fall under category of unaccounted cash. However the burden is on the assessee to establish the genuineness of the deposit in order to fall out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arnataka Co-operative Societies Act under which the appellant was constituted and therefore, the same cannot be considered as business carried on with non-members in order to disentitle the appellant to deduction in light of the ratio of the judgement of the Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. reported in [2021] 123 Taxmann.co 161[SC], which the learned CIT[A] has failed to advert to. 5. The learned CIT[A] ought to have appreciated that the Hon'ble Apex Court in the case of Mavilayi Service Cooperative Bank Ltd. reported in [2021] 123 Taxmann.co 161[SC] has held that Paragraphs 24 to 26 of the judgement in the case of Citizen Co-Operative Society reported in 397 ITR 1, being the judgment based on the combined effect of the statements of the principle of law applicable to the material facts of the case cannot be described as the ratio decidendi of the said judgment and therefore, the view expressed by the learned CIT[A] that the test of mutuality has to be complied with as held in the earlier judgement of the Hon'ble Apex Court in the case of Citizen Co-Operative Society [supra] is erroneous and therefore, the disallowance sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act was available to revise the assessment order passed u/s. 143[3] of the Act, dated 31/12/2019 that has since merged with the appellate order passed by the learned CIT[A] dated 22/11/2021 wherein the deduction claimed u/s. 80P[2][a][i] of the Act was considered and decided and therefore, the impugned order passed u/s. 263 of the Act, dated 29/03/2022 with regard to the deduction u/s. 80P[2][a][i] of the Act is opposed to law and therefore, the same deserves to be cancelled. 3. Without prejudice to the above, the learned P.C.I.T. failed to appreciate that there was no error much less an error prejudicial to the interest of the revenue in the order passed by the learned Assessing Officer warranting revision u/s. 263 of the Act and consequently, the order passed by the P.C.I.T. is opposed to law and facts of the appellant's case and requires to be cancelled. 4. The learned P.C.I.T. failed to appreciate that the learned A.O. had passed the order u/s 143(3) after making sufficient inquiries and with proper application of mind, and thus the same could not be held as erroneous by labelling the same to be not in accordance with law to warrant revision u/s 263 of the Act under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the members. 2.2 Accordingly, the Ld.AO called upon assessee to show cause as to why the disallowance claimed u/s 80P should not be disallowed under the provisions of section 80P(4) applicable with effect from 01.04.2007. The assessee contended that the assessee being cooperative credit society is entitled for deduction u/s 80(2)(d) of the Act. However, the AO rejected the contention of the assessee and disallowed the claim u/s 80P of the Act, holding that since the assessee fulfills the condition laid down u/s 56 (c) (ccv) of part-V of the Banking Regulation Act, 1949 and being cooperative bank, not entitle for deduction u/s 80P (2)(a)(i) of the Act and also by taking support of the decision rendered by Hon ble Supreme Court in the case of M/s Citizens co-operative bank Vs. ACIT reported in [2017] 84 taxmann.com 114 (SC) dated 8/8/2017 held that the above said income is not allowable as deduction u/s 80P(2)(d) of the Act. 2.3 The assessee had deposited Specified Bank Notes [SBN's] received from its members during the period of demonetization into its bank account. In course of the assessment proceedings, the assessee explained that its members had deposited the SBN's with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period. The Ld.AR submitted that it accommodated its members by extending its services by accepting the money deposited by them. It is the submission of the assessee that no benefit has accrued to assessee from the deposit of demonetised currency notes and that assessee has merely acted as an intermediator in utilising old currency which ceased to be accepted as a legal tender. The Ld.AR submitted that during the demonetisation period, assessee had deposited cash as under. Account No. Name of the Bank and Branch Cash deposited during the period from 09.11.2016 to 30.12.2016 9110100128518 Axis Bank Rs. 480760/- 9150200329670 Axis Bank Rs. 3840000/- Total Rs. 4310760/- 8. The Ld.AR submitted that authorities below have not verified the genuineness and has rejected the claim of the assessee by considering the said deposits to be unexplained cash credit. He thus submitted that the issue may be remanded for due consideration based on the evidences filed by assessee. On the contrary, the Ld.DR relied on the orders passed by the authorities below. We have perused the submissions advanced by both sides in the light of records placed before us. 9. We have carefully considered the rival cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identifiable persons as compared to earlier histories will also give some indication for suspicion. Non-availability of stock or attempts to inflate stock by introducing fictitious purchases is also some indication for suspicion of fictitious sales. Transfer of deposit of cash to another account or entity, which is not in line with the earlier history. Therefore, it is important to examine whether the case of the assessee falls into any of the above parameters are not. 10.2 The assessee is directed to establish all relevant details to substantiate its claim in line with the above applicable instructions. We are aware of the fact that not every deposit during the demonetisation period would fall under category of unaccounted cash. However the burden is on the assessee to establish the genuineness of the deposit in order to fall outside the scope of unaccounted cash. The Ld.AO shall verify all the details / evidences filed by the assessee based on the above direction and to consider the claim in accordance with law. Needless to say that proper opportunity of being heard must be granted to the assessee. The assessee may be granted physical hearing in order to justify its claim. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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