9911796707
TMI Blog2025 (1) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... to be accepted. Accordingly, we assessed the sale at Rs. 1.24 Cr. and estimate the profit rate at 5%. We accept the rejection of books of accounts but rejection of the turnover is without any basis. Despite the fact that the assessee before AO and CIT(A) has filed complete details of sales as well as purchases and there is no reason not to accept this sale which has been disclosed by assessee. In term of the above ground of assessee s appeal is partly allowed. Cash deposit made during the demonetization period u/s 69A of the Act as unexplained money - As we accepted the cash sales carried out by assessee, the cash deposit to the extent of Rs. 57.25 lac is also accepted as explained. The addition of balance cash is sustained. In term of the above, this issue of assessee s appeal is partly allowed. Addition restricted to 5% of the gross profit - As we have adjudicated the first issue and restricted the overall additions to the extent of 5% of overall sales offered for a sum we refrain ourselves for adjudicating this ground being academic and without prejudice. Appeal filed by Assessee is partly allowed. - Shri Mahavir Singh, Vice President And Shri Brajesh Kumar Singh, Accountant Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asaf Ali Road Branch, Delhi-06 during demonetization period. The assessee was also required to furnish complete books of accounts including cash book and stock register along with bills and vouchers to justify the purchase and expenses claimed during the year. In response thereto, the assessee uploaded part details i.e. cash books, some evidences of bill and vouchers. The AO during the course of assessment proceedings noticed from the part information that the assessee has shown total turnover i.e., purchases at Rs. 1.37 Cr. as against sale of Rs. 1.24 Cr. The AO noted that the GP ratio and NP ratio for the relevant year is at 7.76% and 2.62% respectively. The AO noted discrepancies in tax audit report but finally after analyzing the sales, he noted that the turnover during demonetization period has increased i.e., from October, 2016 to December, 2016 at 57,25,332/- in cash sales and total sale increased to Rs. 75,64,020/-. The AO compared the sales from earlier years and noted that in Financial Year 2015-16 relevant to Asst. Year 2016-17, the turnover was only to the extent of Rs. 35,10,513/- only. He noted that the cash sale in a period of less than two months is about 57.25 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption that the sales made by assessee are not commensurate with the turnover of earlier years. He practically disbelieved the cash sales but from the bill and vouchers produced before him it is clear that major sales were very much and same details were filed before the VAT Department. Even the VAT returns were filed before the AO during assessment proceedings and even before CIT(A) assessee also filed complete details. 5. The CIT(A) after considering the assessment order and submissions of the assessee noted that the observations made by the tax audit in the tax audit report in Column-5 of Form No.3CB wherein the Auditor has remarked as under:- During the year, it is not possible for us to verify all the transactions of the assessee due to voluminous Entries in the Book of Account and the transactions have been verified on Test-Check basis and explanation provided by Assessee. The CIT(A) noted that the assessee has not produced stock register and even in Form No.3CB, Clause 11(a), 11(b) and 11(c) does not mention about stock register and it is presumed that this stock register has not been mentioned. The CIT(A) finally disbelieved the sudden increasing of turnover from Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 1,260 63 9,110 456 R5.2 1 Central QI 79,540 1.591 79,540 1,591 R4.2 88,650 1 Local Q2 43,437 2,171 14,17,155 70,855 14,60,592 73,027 R5.2 3 Central Q2 6,00,662 12,013 6,00,662 12,013 R4.2 20,61,254 Local Q3 57,25,332 2,86,267 2,85,821 14,291 60.11,153 3,00,558 R5.2 5 Central Q3 15,52,867 31,057 15,52,867 31,057 R4.2 75,64,020 Local Q4 26,93,640 1,34,682 26,93,640 1,34,682 R5.2 7 Central Q4 43,186 864 43,186 864 R4.2 27,36,826 84,70,259 4,23,513 39,80,491 1,30,735 1,24,50,750 5,54,248 1,24,50,750 Note: There are some rounding off difference of less than Rs. 10/- in each quarter Further the assessee also produced quarter wise purchase and reconciliation of the same with VAT returns, which is also reproduced on the same page of CIT(A) order and for ready reference, the same is being reproduced as under:- Detail of Quarterly Purchase for FY 2016-17 with reference to DVAT returns Row no. in DVAT return Page no. DVAT return Cash Purchase DVAT Purchase DVAT Purchase DVAT Local QI 13,790 690 13,790 690 R6.2(2) 2 Local Q2. 22,68,868 1,13,444 22,68,868 1,13,444 R6.2(2) 4 Local Q3 85,69,306 4.28,456 85,69.306 4,28,456 R6.2(2) 6 Local Q4 28.40,988 1,42,211 28,40,988 1,42,211 R6.2(2) 8 Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and so cannot be disbelieved. At the best this can be a good reason for rejection of books of accounts but sales cannot be disbelieved. Hence, we are of the view that the assessee s sales as per bills and vouchers is at Rs. 1.24 Cr. and even cash sales during October, 2016 to December, 2016 quarter during demonetization period has to be accepted. Accordingly, we assessed the sale at Rs. 1.24 Cr. and estimate the profit rate at 5%. We accept the rejection of books of accounts but rejection of the turnover is without any basis. Despite the fact that the assessee before AO and CIT(A) has filed complete details of sales as well as purchases and there is no reason not to accept this sale of Rs. 1.24 Cr., which has been disclosed by assessee. In term of the above ground of assessee s appeal is partly allowed. 10. Coming to second issue of addition made by AO and confirmed by CIT(A) of cash deposit made during the demonetization period of Rs. 59,78,000/- u/s 69A of the Act as unexplained money. For this assessee has raised the following ground No.2:- 2(a) The Ld. CIT(Appeals) erred in facts and law in sustaining the addition of cash deposited of Rs. 59,78,000/- u/s 69A of the Act as un ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
