9911796707
TMI Blog2024 (11) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... 810 crores as compared to last year turnover of Rs. 383 crores, which means that the turnover has jumped 211.48% during the year. These facts show that the cash realized through cash sales, debtors is not abnormal and the AO could not point out any defect in the same. Admittedly, these parties, from whom the assessee has realized the debts, the confirmation was received late and assessee now before us filed the confirmed account statement, which were filed before CIT(A). Once there is no defect in the books of accounts and the VAT returns which accepted as it is and corresponding sale is also not disturbed, we find no infirmity in the generation of this cash on or before 08.11.2016. This cash generation is over the period from 01.04.2016 to 08.11.2016. Out of total cash available in assessee s books of accounts as on 08.11.2016 of Rs. 3,09,45,227/-, a sum of Rs. 3,05,14,820/- is in demonetized currency i.e., Specified Bank Notes. As the cash is explained and sources are recorded in books of accounts and books of accounts are not rejected by AO and there is no iota of evidence that the assessee has introduced unaccounted cash, the cash deposited by assessee during demonetization per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught out by the Assessing Officer. 3. The Ld. CIT (A) has failed to note the contradictory claims by the assessee of receiving cash in crores from parties located in other states on hand and not able to produce the PAN of such parties on the other. 4. The Ld. CIT (4) has erred in not providing opportunity to the Assessing Officer under Rule 46A to examine fresh evidence,/ additional details. 5. The Ld. CIT(A) has decided the issue on a prejudiced manner by merely stating that the AO has not demonstrated with proper evidence why he has not accepted the contentions of the assessee, without addressing the specific facts and findings of the AO brought out in detail in assessment order, thus rendering the order of the learned CIT(A) perverse. 4. Brief facts are that the assessee, a private limited company is engaged in trading of imported paper and also in electronics. The assessee filed return of income for the relevant assessment year 2017-18 on 03.11.2017 and subsequently, assessee s case was selected for scrutiny assessment under CASS and notice u/s. 143(2) of the Act was issued on 11.08.2018. The AO during the course of scrutiny assessment proceedings noticed that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 08/11/2016 and matched the same with cash deposits. Further, due to various anomalies in cash collection as explained above, it is proved that such cash collection is not the source of cash deposits. Further, the pattern of cash deposits also proves that the there was no cash balance as on 08.11.2016. Though the assessee had recorded the VAT sales against cash collection, still the cash collection is unusual and not genuine. The assessee could have deposited in a single instance once demonetisation is announced, if it is accounted cash. Further, the main question is why, the assessee should have such huge cash of Rs. 3 crores without depositing as on when it received the cash from vendors. It is apparently visible that the assessee worked reverse engineering to show that it had cash balance. It means first the assessee deposited the cash and then back worked to bring the cash balance. 4.1 It is to be noted that apart from the cash deposits there were only Rs. 14,000/-deposited during the entire year. The nature of the business is also not cash rich and mostly through bank transactions. It is to be noted that the reason given for cash deposits is not credible enough to believe b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn. 2. VAT assessment orders if any. 3. Cash book details. 4. Ledger copy of the purported deposits in cash. 5. The product wise details post-demonetization and pre-demonization. 6. The invoice copies thereof. On perusal of the information submitted by the Appellant, I am of the opinion that during the impugned assessment year 2017-18, the Appellant has recorded sale of Rs 8,10,15,97,635/- in the books of account which are tallying with the VAT returns submitted by the Appellant. Had it been only an afterthought, no Assessee can go back and change or correct the VAT returns, that too after a period of 6 years from the end of the previous year 2016-17. Hence, sales recorded by the Appellant have to be treated as genuine at first glance. The appellant has filed confirmations from the respective debtors which have been received through mails and the ledger copies of the said debtors maintained in the books of the appellant for the year under consideration. 6.2.Now turning towards the cash available and deposited by the Appellant, the explanation of the Appellant that the amount was recovered from the debtors cannot be denied as there is evidence available in the form of confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outstanding in previous years and also debtors during current year amounting to Rs. 19,46,014/-, Rs. 53,10,325 Rs. 2,33,43,210/-, which is a fact as per books of accounts. Admittedly, there are amount received on account of current debtors of Rs. 2,33,43,210/- from specified parties Orient Enterprises, Rajkot, S K Enterprise, Hyderabad and D K Traders, Hyderabad. The assessee has also reconciled the cash sales, debtors outstanding, viz-a-viz VAT returns. Admittedly, the assessee s turnover during the year is Rs. 810 crores as compared to last year turnover of Rs. 383 crores, which means that the turnover has jumped 211.48% during the year. These facts show that the cash realized through cash sales, debtors is not abnormal and the AO could not point out any defect in the same. Admittedly, these parties, from whom the assessee has realized the debts, the confirmation was received late and assessee now before us filed the confirmed account statement, which were filed before CIT(A). Once there is no defect in the books of accounts and the VAT returns which accepted as it is and corresponding sale is also not disturbed, we find no infirmity in the generation of this cash on or before 08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting with specified bank notes, the genuine explanation offered by the assessee towards source for cash deposit cannot be rejected, unless the AO makes out a case that the assessee has deposited unaccounted cash into bank account in specified bank notes. 8.5 We further noted that the Central Board of Direct Taxes had issued a circular for the guidance of the Revenue Officer to verify cash deposits during demonetization period in various categories of explanation offered by the assessee and as per the circular of the CBDT, examination of business cases, very important points needs to be considered is analysis of bank accounts, analysis of cash receipts and analysis of stock registers. From the circular issued by the CBDT, it is very clear that, in a case where cash deposit found in business cases, the AO needs to verify the explanation offered by the assessee with regard to realization of debtors where said debtors were outstanding in the previous year or credited during the year etc. Therefore, from the circular issued by the CBDT, it is very clear that, while making additions towards cash deposits in demonetized currency, the AO needs to analyze the business model of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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