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TMI Blog2022 (9) TMI 1647X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities had pointed out any voucher wherein the genuineness of the expenditure claimed to have been incurred by the assessee was not wholly and exclusively for the purpose of its business, nor was it the case of the Revenue that any part of the expenditure in question was either found to be bogus, or fictitious. Evidently, there has been no clear finding as to the number of vouchers requiring denial of allowances with the amount of expenditure and nature of defects therein or therewith. Department could not bring out any material on record to substantiate its conclusion as logical. Also, there is no evincible rationale in arriving at the percentile of disallowance in the present case. Therefore, the ad-hoc disallowance made in an arbitrary manner cannot be held to be justified. The disallowances are deleted.Decided in favour of assessee. - Shri. A. D. Jain, Vice President For the Appellant : Shri K.R. Rastogi, C.A. For the Respondent : Shri Harish Gidwani, D.R. ORDER This is assessee s appeal against the order of the ld. CIT(A), NFAC, New Delhi, dated 26.11.2021, for the Assessment Year 2017-18, raising the following Grounds of Appeal: 1. That the learned Income Tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018, declaring a total income of Rs. 12,16,680/-. The Assessing Officer completed the assessment under section 143(3) of the I.T. Act by making various additions. 5. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), who dismissed the appeal of the assessee, confirming the order of the Assessing Officer. Being further aggrieved, the assessee is in Appeal before us. 6. The ld. Counsel for the assessee at the outset submitted that Shri Anas Rasheed, Advocate of Lakhimpur, who was looking after the Income Tax matters of the assessee, was suffering from high blood pressure and was confined to bed for about 15 days, and therefore, neither he appeared, nor any written submission could be filed before the ld. CIT(A); and that the ld. CIT (A) has passed the order ex-parte qua the assessee. 7. On merit, apropos Ground no.1, relating to addition of Rs. 19,10,000/- being unexplained cash deposit, the ld. Counsel for the assessee has submitted that the books of account are duly audited; that a copy of Audited Balance Sheet and Profit and Loss Account for the year ending 31.03.2017 [APB: 21 23] were furnished before the Assessing Officer; that in the course of the assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Years 2015-16, 2016-17 and 2017-18. 2- Month wise Cash Sale and Cash Deposit for Assessment Year 2015-16, 2016-17 and Assessment Year 2017-18. 3- Cash Summary Month wise for Assessment Year 2017- 18. 4- Copy of Sale Ledger. 5- Copy of Purchase Ledger. 6- Copy of Bank Statement with ICICI Bank Limited for Assessment Year 2017-18. 7- Copy of Quarter wise VAT Return for Assessment Year 2017-18. 8- Comparative G. P. and N. P. Rate. 9- Copy of Purchase and Sale Invoices. 9. The ld. Counsel for the assessee further submitted that since the Assessing Officer had not pointed out any defect in the books of account of the assessee, treating the part of cash deposits, i.e., of Rs. 19,10,000/- as unexplained, is not justified. 10. The ld. Counsel for the assessee contended that the assessee had also furnished before the Assessing Officer the copies of Sale Bills along with Sale Register for the period between 01.10.2016 and 08.11.2016 and purchase ledgers along with details of the purchases made and had submitted that all the purchases made by the assessee were from registered VAT Dealers; and that the Assessing Officer had not doubted the purchases made by the assessee; that the avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht and Value, Sale with Weight and Value, Closing Stock with Weight and Value for Assessment Years 2015-16, 2016-17 and 2017-18 [APB: 40 42]. (2) Month wise Cash Sale and Cash Deposit for Assessment Year 2015-16, 2016-17 and Assessment Year 2017-18 [APB: 43 44]. (3) Cash Summary Month wise for Assessment Year 2017-18 [APB: 45]. (4) Copy of Sale Ledger [APB: 46 80]. (5) Copy of Purchase Ledger [APB: 81 83]. (6) Copy of Bank Statement with ICICI Bank Limited for Assessment Year 2017-18 [APB: 84 to 87]. (7) Copy of Quarter wise VAT Return for Assessment Year 2017-18 [APB: 88 118]. (8) Comparative G. P. and N. P. Rate. (9) Copy of Purchase and Sale Invoices. 14. The Assessing Officer, on verifying the details so furnished by the assessee, accepted the Cash Deposits of Rs. 9,90,000/- and Rs. 20,00,000/-, deposited on 17.11.2016 and 18.11.2016, respectively. However, on a random basis, he made the addition, under section 68 of the I.T. Act, of the amount deposited on 23.11.2016, i.e., of Rs. 19,10,000/-, on the presumption that the amount of Rs. 19,10,000/-, deposited after a gap of five days from the date of the previous deposit on 18.11.2016, was generated in old SBNs during the demone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the demonetization period and was illegally accepted by the assessee. 17. In ACIT vs. M/s Hirapanna Jewellers (supra), on an identical issue, the ITAT, Visakhapatnam Bench, placing reliance on various judgments of the Hon'ble Supreme Court and High Courts, held that the cash receipts represent the sales which the assessee therein had rightly offered for taxation; that there was sufficient stock to affect the sales in the trading account; and that since the assessee had already admitted the sales as revenue receipt, there was no case for making the addition under section 68 of the I.T. Act. 18. In the case at hand, we find that the assessee has established the sales with the bills. The sales were duly accounted for in the books of account. Therefore, the addition of Rs. 19,10,000/- made under section 68 of the I. T. Act is not justifiable, as the amount was available with the assessee as opening balance of cash-in-hand as per cash book and cash received from the sales. Since these were Revenue Receipts, the same had also been offered to tax and due taxes had already been paid. The Assessing Officer had randomly made the addition, without pinpointing any abnormality therein. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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