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TMI Blog2025 (1) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the source of cash deposits in the bank account during 9th November, 2016 to 31st December, 2016, which are from regular cash sales and therefore, impugned addition u/s 69A read with section 115BBE is uncalled for. The finding of the ld. CIT (A) is set aside and the impugned addition stands deleted. Effective ground raised by the assessee is allowed. - Dr. Manish Borad, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Assessee : Shri Miraj D. Shah, AR For the Revenue : Shri Nicholash Murmu, DR ORDER PER DR. MANISH BORAD, AM: This appeal at the instance of the assessee is directed against the order of Commissioner of Income-tax (Appeals) [learned CIT (A)] dated 26th April, 2023, which is arising out of the assessment order under Section 143(3) of the Income-tax Act, 1961 (the Act) dated 9th December, 2019. 2. Assessee has raised following grounds of appeal: - 1. That the order passed u/s 250 is bad in law as well as on facts of the case. 2. That the Hon'ble Commissioner of Income Tax (A) NFAC erred in law as well as on facts of the case by treating the 77.71% of cash deposited to the tune of ₹ 27306600/- as unexplained money u/s 69A r.w.s. 115BBE of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 115BBE of the Act and assessed income at ₹ 3,17,53,786/-. 4. Aggrieved, assessee preferred an appeal before the ld. CIT (A) and filed detailed submissions but ld. CIT (A) without specifically dealing with the two components of the additions, partly allowed the appeal of the assessee holding that the ld. AO erred in making the addition solely on the ground that there is an increase of 96.79% in the cash deposit and gave part relief to the assessee directing the ld. AO to assume that there was an increase of 22.29% in cash deposits as explained. The finding of the ld. CIT (A) reads as under:- Decision 1 Ground No.1: The Ld. AO has erred in assessing the source of cash deposit and biasedly added back it to the total income u/s 69A of the act. The Ld. AO did not considered the fact that the cash deposit has been made out of the amount received from sales which was duly shown in VAT return and also included in turnover in audited books of accounts which was duly disclosed in income tax return. The order of the Ld. AO is erroneous, harsh, unjustified and is against the spirit of law. COME TAX DEPARTME 1.1 The AO in his order has analysed the increase in sales and cash depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for the cash deposit during the period 9th November, 2016 to 31st December, 2016, the ld. AO grossly erred in making the addition for total cash deposit ignoring the actual cash sales made during this period. He further submitted that the finding of the ld. CIT (A) is not specific and not in order and is merely based on surmises and conjunctures, where he has assumed the increase in 22.29% in cash deposits as explained but the excess is unexplained. Lastly, he stated that when the ld. AO has accepted that the alleged cash deposit is on account of cash sales then the addition if any could have been made only to the extent of profit element that too if it is proved that sales were not recorded in the books of accounts. 6. On the other hand, the ld. DR vehemently argued supporting the order of both the parties. 7. We have heard the rival contentions and perused the records placed before us. The addition for cash deposits during demonetization period from 9th November, 2016 to 31st December, 2016, are in dispute before us. The ld. AO has made the addition u/s 69A read with section 115BBE of the Act at ₹ 2,73,06,000/-. The impugned addition has been made by the ld. AO on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analyse the cash deposits mentioned in the chart reproduced above, we will first take note of the fact that assessee is regularly maintaining its books of accounts along with quantitative details. Assessee is registered with the Value Added Tax Department (VAT). Quarterly returns and annual return under VAT have been filed. Tax audit report u/s 44AB of the Act also filed. Books of accounts have not been rejected by the ld. AO which means that the figures mentioned in the profit and loss account have been accepted. The assessee has been subjected to scrutiny proceedings for A.Ys. 2014-15 and 2015-16 and except minor additions of ₹ 61,561 and ₹ 1,64,742/-, income of the assessee has been assessed at ₹ 80,05,931/- and ₹ 75,64,210/-. 9. Now coming to the cash sales and cash deposits for the year is concerned, we note that in the immediately preceding financial year cash sales during the period of 1st April, 2015 to 8th November, 2015 amounted to ₹ 15,23,82,543/- and the corresponding figure for F.Y. 2015-16 is amounting at ₹ 17,67,00,524/-. It clearly shows that the cash sales for the period 1st April, 2016 to 8th November, 2016, has increased by ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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