9911796707
TMI Blog2025 (1) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in books of accounts whereas cash deposited in the bank account stood duly recorded in books of accounts. Addition confirmed is illegal and bad in law. 2. That on the facts & circumstances of the case, Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, has grossly erred in confirming addition of Rs. 57,32,048/- u/s 69A of the Act in respect of cash deposited in bank account out of sale proceeds which stood recorded in books of accounts and credited to profit and loss account. 3. That addition of Rs. 57,32,048/- u/s 69A of the Act made by the Assessing Officer by holding that sales are bogus and represented unaccounted income is illegal and bad in law since neither purchases made nor owning of stocks at the time of sales have been disputed by the Assessing Officer. 4. That on the facts & circumstances of the case, conclusion drawn by the Assessing Officer that out of total turnover of Rs. 85,98,563/-, turnover of Rs. 57,32,048/- is on account of unaccounted income brought in the shape of sales is illegal and bad in law since neither details of sale bills of which total comes to Rs. 57,32,048/- alleged to be unaccounted income of the assessee nor details of mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to decide the main issue involved 6.2.1 During the course of assessment proceedings, the Assessing Officer in his assessment order dated 30/12/2019 has stated that:- "3.2 In the present case, it has been found that the assessee has made total cash deposits of Rs. 67,60,200/- in various bank accounts during the period of demonetization i.e. from 09.11.2016 to 30.12.2016 as under: Bank Account No. Cash Deposits Kotak Mahindra Bank 9411734238 67,60,000 Oriental Bank of Commerce 308861010000220 2,000 Total 67,62,000 Vide notice u/s 142(1) dated 12.09.2019 and 21.12.2019, the assessee was asked to furnish the detail of the source of this cash deposit in the bank with other details. The assessee vide reply dated 24.12.2019 explained that the cash deposit has been made out of books of accounts. The assessee also furnished comparative chart of monthly sales made in cash out of total sales for F. Y. 2015- 16 and 2016-17, comparative chart of date wise sales made in the month of November, 2015 and November, 2016, month wise comparative chart of cash deposited in F. Y. 2015-16 & 2016-17 and comparative chart of expenses made in cash for F.Y. 2015-16 and 2016-17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been deposited in the demonetisation period. Apart from the above facts, it is also submitted that: * The purchase in the month of October, 2016 has been made from the sister concern M/s R. M. Exports. * The assessee claimed to have sold such huge stocks in retail in Oct. and November, 2016 but no corresponding expenses such as freight, carriage, labour etc. has been shown in the P&L account. Even no salary has been claimed in the P&L account. * There is no proof of movement of stocks involved in purchase and sale of the stocks. * There is a clear deviation from the normal course of business as far as the cash sales are concerned which is clear from the comparative data of cash sales for last years for which no valid reason has been given by the assessee. * The details submitted by the assessee shows that there has never been any history of cash sales. * The cash in hand has been kept by the assessee with himself for about a month despite despite having access to all the banking facilities as if the assessee was waiting for announcement of demonetisation. . * All the cash sales have been made to unidentified persons. It is evident that the assessee has attem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The reliance is also placed on Gem Granites vs. CIT [2004] ITR 322(SC). 3.6 The above findings are supported by the following factual position and judicial pronouncements: (i) Section 69A gives a statutory recognition to the principle that the unexplained money which are not satisfactorily explained may be assessed as income. Reliance is placed on 140-ITR- 151, 155(AII) reported in the case of Nanak Chand Laxman Dass V/s CIT. (ii) It was held in the decision of Hon'ble Supreme Court in the case of Roshan Di Hatti relevant para of the judgment is reproduced as under:- "The law is well-settled, that the onus of proving the source of a sum of money found to have been received by an assessee is on him. If he disputes the liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Revenue is entitled to treat it as taxable income. To put it differently, where the nature and source of a receipt, whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the Revenue to hold that it is the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is honourable to avoid payment of tax by resorting to dubious methods''. Tax planning should not be done with an intent to defraud the revenue; though all transactions entered into by an assessee taken individually could be legally correct, yet on the whole these transactions may be devised to defraud the revenue. Thus, planning for tax should be correct both in form and substance. All such methods which are resorted to deceive and impairing the true construction of the statute, resulting in availing non-sacrosanct advantage of law would be termed as colourable devices. Those devices where statue is followed in strict words but actually spirit behind the statue is marred would be termed as colourable devices." 3.7 The above judicial pronouncements are squarely applicable in the instance case as the Assessee has failed to satisfactorily discharge his onus to prove that the source of cash deposits made during the period of demonetization was his genuine cash in hand from business. The contention of the assessee fails the human probability test. Thus, the logic of preponderance of human probability constitutes that even though the transactions seem to be explained but there genu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 69A of the Income Tax Act, 1961." 6.22 I have carefully considered the AO's viewpoint contained in the Assessment Order and the submission made by the appellant including relevant judicial decisions in the matter. 6.23 It is noticed from the assessment order that the assessee has made total cash deposits of Rs. 67,60,200/- in various bank accounts during the period of demonetization. During the course of assessment proceedings, the assessee was asked to furnish the details of the source of cash deposit in the bank with other details. In this regard, the assessee has explained that the cash deposit has been made out of books and furnished comparative chart of monthly sales made in cash out of total sales for FY 2015-16 and 2016-17. 6.24 It is evident that the assessee has attempted to generate enough cash in hand just before demonetization to cover the cash deposited in the bank during demonetization by booking cash sales in its books of accounts in October, 2016 and up to 8th November, 2016 by making purchases from the sister concern. The assessee claimed to have sold such huge stocks in retail in Oct. and Nov., 2016 but no corresponding expenses such as freight, carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) has grossly erred in confirming the addition of Rs. 57,32,048/- u/s 69A of the Act in respect of cash deposits made in bank a/c during demonetization period, being out of sale proceeds which stood recorded in the books of account and credited to profit & loss account. He argued that the Ld. CIT(A) has treated the disputed cash deposits as bogus sales representing unaccounted income without either disputing the purchases made or the stock owned by the appellant assessee out of which the alleged sales claimed by the assessee. In support, he has filed a written synopsis which reads as under: "1. That Assessing Officer has himself admitted that assessee carried out business in the month of Oct 2016 and first week of Nov 2016. (Para 3.3 bullet 1 page 3 of the assessment order). 2. That case of the Assessing Officer that cash sales of Rs. 59,12,010/- made in the month of October 2016 and upto 08.11.2016 were not deposited in the bank account despite having assess to all banking facilities does not call for adverse inference since there is no prohibition under the Income Tax Act for keeping cash in hand. (Para 3.3 page 3 of the assessment order). 3. That case of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h October 2016 upto 08.11.2016only because there was scope to manipulate books of accounts of October 2016 and upto 08.11.2016 because last date for filing VAT return for the month of September had passed at the time of announcement of demonetization of currency, it is submitted that both these allegations are based on assumptions and presumptions far away from the facts of the case. There is no material in possession of the Assessing Officer to justify allegations except assumptions only. 6. That in support of allegations, reliance of the Assessing Officer on judgments reported in 140 ITR 151, 214 ITR 0101, 182 ITR 0540, 154 ITR 0148 is uncalled for since facts of the judgments relied upon have no bearing on facts of the case. 7. That it is not in dispute that assessee has maintained proper books of accounts consisting of cash book, ledger, stock register and sale bills, purchase bills and vouchers. Books of accounts of the assessee have been audited and tax audit report has been obtained and filed with the Income Tax department. Cash deposited in the bank account is out of cash available in the books of accounts. Cash available in books of accounts is on account of cash sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 to 31.03.2017 2686553 13613 11798 1815 58-61 Total 8598563 371290 282748 88542 2. That Assessing Officer has not provided bill wise details of sales alleged to be bogus. Total sales upto 31.12.2016 amounted to Rs. 59,12,010/- out of which Assessing Officer has alleged bogus sales amounting to Rs 57,32,048/- of which neither bill wise details nor material wise details have been provided. No adverse inference has been drawn by sale tax department and VAT returns have been accepted as is it. Sales represented sales out of stocks consisting of opening stock and purchases made. Ground of Appeal No. 5 Our Submissions 1. That assessment has been framed by invoking provisions of section 69A read with amended section 115BBE of the Act as per which income tax is to be calculated at 60% of income determined u/s 68, section 69, section 69A, section 69B, section 69C and section 69D. Jurisdiction thus assumed is not valid jurisdiction since provisions of amended section 115BBE are attracted with effect from A.Y. 2018-19 and are not applicable to A.Y. 2017-18. The last amendment to section 115BBE was made through Taxation Laws (2nd amendment Act 2016) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and loss account and hence such cash sales have already been offered to tax as income of the assessee and therefore, further no inference u/s 69A of the Act was unwarranted based on assumptions and presumptions, surmises and conjectures by the authorities below to treat the cash sales as unaccounted income amounting to Rs. 57,32,048/-. 8. The Ld. CIT(A) ought to have rebutted the contention raised by the assessee in the hearing with support of the written submission, and copies of relevant documents produced in addition to what was produced before the before AO. We find that the Ld. CIT(A) has neither appreciated the facts on record and the documentary evidence produced nor rebutted the contention of the assessee. The finding and decision of the Ld. CIT(A) ignoring the submission based on facts and merits and reinforces the findings of the AO in mechanical manner is not justified. Merely stating that the appellant's filed its reply has been considered and examined but the same has not been found satisfactory cannot be approved because the Ld. CIT(A) has neither controverted nor disproved the contention with valid reasons and corroborative documentary evidence. The case law cited b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
