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TMI Blog2025 (1) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 69A in our opinion are not applicable to the facts of the present case. In view of the detailed reasoning given by the Ld. CIT(A)/NFAC on this issue, we do not find any infirmity in his order -Aappeal filed by the Revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... book, invoices of sales, and other details the correctness of the accounts of the assessee has not been satisfactorily explained. The books of the accounts of the assessee are therefore rejected as per provisions of section 145(3) of the Income Tax Act, 1961. The income of the assessee from the business is therefore estimated based on the information available on record. Since the cash sales have not been substantiated and on the basis of information of bogus purchases made from M/s Rishab Trading Company the sales of the assessee from proprietary concern M/s Pooja Jewellers is estimated at Rs. 14,50,26,693/- (Sales shown less cash sales shown). By applying a net profit percentage @ 1.33% (Average of 1.46% shown last year and 1.2% shown this year) to the sales estimated the income from business is worked out at Rs. 1,30,478 (Rs. 19,28,855-17,98,377)." 4. The Assessing Officer similarly rejecting the various explanations given by the assessee made addition of Rs. 4,43,90,000/- being the entire cash deposited in bank account as unexplained cash deposit u/s 69A of the Act by recording as under: "The above fact also clearly establishes the correctness of the modus operandi mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Department. Moreover the sales of the appellant have been accepted by the GST department. Therefore in view of the submission of the appellant, the case laws relied upon by the appellant and the fact that the AO could not find any defect with the stock register, cash sales bills submitted by the appellant and cash book of the appellant and also the AO could not prove that the sales made by the appellant were not genuine the addition of Rs. 4,43,90,000/- made by the AO is deleted. The grounds of appeal 5 and 7 are allowed." 8. So far as rejection of the books of account is concerned, the Ld. CIT(A)/NFAC while upholding the action of the Assessing Officer in rejecting the books of account, however, directed the Assessing Officer to adopt the net profit rate at 1.33% i.e. average of 1.46% shown during last year and 1.2% shown during this year to the sales including the cash sales of Rs. 4,43,90,000/- by observing as under: "6.5.2 I have perused the assessment order of the AO and the reply submitted by the appellant and after the perusal of the same it has been observed that the AO has rejected the books of account on account of reasons that the cash sales cannot be verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, the Ld. CIT(Appeals) erred in deleting the addition made by the AO whereas on the other hand accepted that the assessee had indulged in claiming bogus purchase entry from M/s Rishab Trading Co. v. The appellant craves leave to add, alter, amend and modify any of the above or all grounds raised at time of proceedings before the Hon'ble Tribunal which may please be granted. 10. The Ld. DR strongly challenged the order of the Ld. CIT(A)/NFAC in deleting the addition of Rs. 4,43,90,000/- made by the Assessing Officer u/s 69A on account of unexplained cash deposits. He submitted that once Mr. Ankit Jain in his sworn statement recorded u/s 132(4) has given the modus operandi of the entire transactions which clearly established that the cash deposited by the assessee was to show bogus purchases, the Ld. CIT(A)/NFAC was not justified in deleting the addition. He submitted that the said bogus purchases were actually used to provide cash by hawala means to various persons at Delhi with the help of Mr. Ankit Jain, proprietor of M/s. Rishabh Trading Company. Since the assessee had indulged in claiming the bogus purchase entries from M/s. Rishabh Trading Company, which the Ld. CIT(A)/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the nature and source of cash deposited of Rs. 4,43,90,000/- which is out of cash sales and which are duly recorded in the books of account. The assessee has clearly explained the nature and source by way of necessary evidences on record. 13. Referring to pages 55 to 372 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to the copies of sales invoices. Referring to pages 411 to 430 of the paper book, he drew the attention of the Bench to the cash book for the period 01.04.2019 to 31.03.2020 and submitted that each and every cash deposited, has corresponding cash sale as its source and there are no negative cash balances on any single day. Referring to pages 431 to 472 of the paper book-2, he submitted that the sales shown by the assessee have been accepted by the GST department. 14. So far as the allegation of the Assessing Officer that the assessee has not furnished the copies of sales invoices and it is not possible to verify the genuineness of these cash sales is concerned, he submitted that the assessee has duly submitted the copies of sales invoices by 23.09.2022 and the acknowledgment of online submission is available at pages 49 to 52 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 ITR 419 vii) Smt. Tripta Rani vs. ACIT 97 ITR 389 viii) J.M. Wire Industries vs. CIT 205 Taxman 134 ix) Lalchand Bhagat Ambica Ram vs. CIT 37 ITR 288 (SC) x) Lakshmi Rice Mills vs. CIT 97 ITR 258 xi) Daulat Ram Rawatmull vs. CIT 87 ITR 349 (SC) xii) PCIT vs. Hitesh Gandhi vide ITA No.18/2017, order dt 16.02.2017 20. Referring to the following decisions he submitted that the addition u/s 69A is unjustified where the cash deposit is treated as cash sales reflected in regular books of account as it amounts to double taxation: i) Nitin Kumar Bohra vs. ITO vide ITA No.340/Bang/2024, order dated 24.09.2024 ii) Dipak Balubhai Patel vs. ITO vide ITA No.942/Ahd/2023, order dated 22.08.2024 iii) Ashok Ravsaheb Tambe vs. ITO vide ITA No.999/PUN/2024, order dated 01.08.2024 21. He submitted that since the Ld. CIT(A)/NFAC after considering the various details furnished by the assessee has deleted the addition of Rs. 4,43,90,000/- and directed the Assessing Officer to estimate the GP rate at 1.33% on the total sales including cash sales of Rs. 4,43,90,000/-, the order of the Ld. CIT(A)/NFAC is justified and the grounds raised by the Revenue should be dismissed. 22. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, has retracted his statement before the DDIT (Inv). This fact was also brought to the notice of the Assessing Officer during the course of assessment proceedings. Further, the allegation of the Assessing Officer that the assessee has neither produced cash book nor furnished the source of cash deposits in the bank account is also incorrect since the assessee has uploaded the submission along with cash book in the portal, the details of which are filed in the paper book. Since the assessee in the instant case has submitted all the sale bills and also produced registers before the Assessing Officer during the course of assessment proceedings and since the sales of the assessee have been accepted by the GST department, therefore, such explanation of the assessee cannot be brushed aside. 23. We find provisions of section 69A read as under: "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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