9911796707
TMI Blog2024 (12) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 115BBE. AO is directed to tax the sustained addition at normal rate of tax. In the result, ground No. 1 of the appeal is partly allowed. Addition of sundry creditors - no supporting evidence like copy of bills, Ledger account and proof of subsequent payment is filed - CIT(A) confirmed the action of AO - HELD THAT:- On considering the submission and perusal of supporting evidence in the form of account confirmation and sample purchase bill, find that neither the AO nor the ld. CIT(A) verified such bills and account confirmation or made any independent investigation of such evidences. Moreover, all the purchase bills are in respect of yarn. Complete details of creditors are available on sales invoices/purchase bills. Thus, no justification of making such addition. AO is directed to delete the addition. In the result, ground No. 2 of appeal is allowed. Ad hoc disallowances of 10% of expenses - assessee submits that the assessee has offered income u/s 44AD, thus, there is no scope of further addition - HELD THAT:- CIT(A) confirmed the action of AO with similar view. Before me, the ld. AR of the assessee vehemently argued that the assessee has offered income under Section 44AD. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcent by applying the duly substituted S.115BBE inserted retrospectively instead of taxing it at 35.54 percent as per the old provision of S.115BBE. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 2. Brief facts of the case are that assessee is an individual, filed his return of income for assessment year 2017-18 on 20.01.2018 declaring income of Rs. 3,63,060/-. The case was selected for scrutiny. During assessment, Assessing Officer (AO) noted that assessee has made cash deposit of Rs. 26,09,000 (26.00 lacs approx) in Prime Co-Op. Bank Ltd. during demonetization period. The assessee was asked to substantiate source of cash deposit. The AO further noted that assessee has shown various outstanding creditors and asked to furnish supporting evidence about the credit entries. The AO further noted that assessee has shown various expenses on account of different type of labour expenses, conveyance expenses against miscellaneous expenses of aggregating Rs. 20,91,470/-. The AO issued show cause notice to substantiate source of cash deposits, details of outstanding creditors and to furnish complete details of such expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year, if deposit cash in bank. In response to query raised by Government, the assessee filed on-line response on 20.01.2018 and stated that cash was deposited from business receipt. No further enquiry was raised by Revenue, during assessment, assessee filed bank statement and cash book for assessment year 2016-17 and 2017-18 respectively. Income Tax Return for 2016-17 and 2017-18, with comparative details of cash deposit during current and preceding year along with comparative details of cash sales during current year and preceding year. The assessee furnished complete details, despite furnishing such details, AO made addition. On the addition of unexplained expenditure on account of creditors, the assessee stated that AO issued various notices requiring assessee to furnish details regarding credits as on 31.03.2017. In response to such notice, assessee furnished required details. There were total creditors outstanding of Rs. 73,09,386/-. The AO required details of only four such creditor. The assessee submitted account confirmation and purchase bills of said parties, the AO was not satisfied and made addition on account of unexplained expenditure. On ad hoc addition by disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the cash balance shown in the cash book. The return of income for A.Y. 2016-17 was filed on 06/03/2017. The assessee also furnished comparative sales in F.Y. 2015-16 and F.Y. 2016- 17. Due to demonetization of Rs. 1000/- and Rs. 500/- currency notes, the assessee has no option except to deposit entire currency notes which were banned by the Central Government. The cash deposit was out of cash available in cash book and from cash sales. The ld. AR of the assessee submits that the assessee has already included the cash realization as a profit in his income, making addition of same amount would be a double taxation. Merely during demonetization period, cash sales was little higher cannot be a ground for treating the deposit as undisclosed. The cash deposit was out of business savings/cash generated in the business, the same cannot be taxed at higher rate prescribed under Section 115BBE of the Act. Otherwise, the enhanced rate of tax was brought into statute book in December, 2016, the assessee made cash deposit prior to said amendment. The Surat Bench in a series of decisions have held that enhanced rate of tax under Section 115BBE is not applicable for A.Y. 2017-18. To support his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit cannot be treated as income. Therefore, a reasonable addition out of total cash deposit will be sufficient to avoid the possibility of revenue leakage. Thus, considering the facts of the present case, 20% of total cash deposit of Rs. 26.09 lacs are upheld and remaining addition is deleted. So far as taxing the addition is concerned, the cash deposit is out of business receipt, therefore, it cannot be taxed under Section 115BBE. The Assessing Officer is directed to tax the sustained addition at normal rate of tax. In the result, ground No. 1 of the appeal is partly allowed. 11. Ground No. 2 of appeal relates to addition of sundry creditors. The ld. AR of the assessee submits that during the period under consideration, the assessee was having total outstanding creditors as on 31/03/2017 of Rs. 73,09,386/- as has been recorded in para 2 of assessment order. The AO issued show cause notice doubting about four creditors. The assessee filed detailed reply on 25/12/2019. The assessee filed account confirmation, purchase bill of all four parties. The AO was not satisfied with the reply of assessee and added total of their credit as unexplained expenditure under Section 69C of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
