9911796707
TMI Blog2025 (2) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT authorities in VAT return and the same were accepted. The gift was made due to love and affection and a gift-deed executed by father was also filed to AO and the same is a part of Paper-Book as well. Therefore, the assessee is very correct in claiming that the gift transaction is nothing to do with purchase transaction and the two transactions are altogether independent of each other. The AO has made a wrong notion that there is a circular transaction by way of gift. It is also noteworthy that the AO has neither disallowed the purchase made from father nor made any addition qua the gift received from father. Thus, the transactions of purchase and receipt of gift are not disturbed by AO. AO has, however, made addition treating the deposit in bank a/c as unexplained whereas the source of deposit in bank a/c is very much available in Cash-Book of assessee and the same Cash-Book is not even rejected by AO. It is also noteworthy that the AO has made addition u/s 69 even while accepting the books of account of assessee, the books of account in which the impugned cash deposit in bank a/c is recorded. Nobody can dispute that the section 69 applies only when a sum is not recorded in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsapp is filed as Annexure (A/1) to condonation-application. Thereafter, the present counsel prepared appeal-papers and shared same to local counsel on 20.12.2022 through email, the copy of email is filed as Annexure (A/2) to condonation-application. Thereafter, the present counsel received hardcopies of appeal-papers from Bhopal via bus service but due to intervening vacations of High Court and non-working, the present counsel could not file appeal promptly. Ultimately, this appeal could be filed on 02.01.2023 after delay. Affidavit of present counsel, Shri Gagan Tiwari, confirming these very facts is also filed as Annexure (A/3) to condonation-application. Thus, the delay in filing appeal is attributable to counsels of assessee and the assessee has no role in making delay. Ld. AR very humbly submitted that there is no lethargy, negligence, mala fide intention or ulterior motive of assessee in making delay and the assessee does not stand to derive any benefit because of delay. He further submitted that the sole reason of delay is as explained in the condonation-application and affidavits. He prayed for condonation of delay. Ld. DR for Revenue left the matter to the wisdom of Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom his father Shri Sheetal Prasad Soni. Relevant records along with copy of bank statement of the assessee and his father were also duly considered. It was observed that the above 'gift transaction' is in fact a 'circular transaction' being a colourable device to evade tax which is evident from following facts: 1. In the bank statement of Shri Sheetal Prasad Soni [father of the assessee] [bank account number 33206118835 with SBI, Chowk Bazar, Bhopal] there are following entries: Date Particulars Withdrawal [Rs.] Deposit [Rs.] 08/03/2017 Radha Devi Soni Prop. New Ambika Jwellers [Mother of the assessee] 34,11,825 08/03/2017 Sandeep Soni Prop. Ambey Jewellers (Brother of the assessee) 29,61,320 08/03/2017 Deepak Soni Prop. Ambalika Jwellers [Assessee] 47,35,262 09/03/2017 Gift made to the assessee 58,60,000 2. From the above, it is clear that there are transfers of sums from the bank account of the assessee/his brother & mother prior to making gift to the assessee. 3. The assessee had shown purchase of gold jewellery amounting to Rs. 47,35,262/- on 4/10/2016 vide invoice no. 37 dated 04/10/2016 from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 50,52,518/- as on 09.11.2016 (date of commencement of demonetisation) in Cash-Book of business. The Cash-Book was filed to AO during assessment-proceeding and also placed in Paper-Book-I at Pages 8-21. Out of cash of Rs. 50,52,518/-, the assessee was having demonetised/Specified Bank Notes (SBNs) of Rs. 49,00,000/- which the assessee had to deposit in bank a/c due to declaration of demonetisation by Govt. The assessee made deposit on 15.11.2016 in one single shot immediately after declaration of demonetisation. (iii) That the above cash balance as on 09.11.2016 was accumulated from sale of assessee's jewellery business made prior to demonetisation. The assessee filed following documents to AO during assessment-proceedings to demonstrate the purchases and sales; these documents are also placed in Paper-Book: (a) Monthly summary of Opening stocks, Purchases, Sales and Closing stocks in terms of quantities and values of gold/gold ornaments (Page 23 of Paper-Book-I). (b) Ledger A/cs of Purchases and Sales of gold/gold ornaments for the entire previous year 2016-17 (Pages 24-35 of Paper-Book-I). (c) Stock Register (Pages 36-39 of Paper-Book-I). This Register clearly shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that assessee's father has made a gift of Rs. 58,60,000/- to assessee whereas the purchase transaction from father's proprietorship concern was just Rs. 47,35,262/-. He strongly contended that the purchase transaction was altogether different from gift transaction and the AO has unnecessarily as well as baselessly connected the two transactions just to draw an adverse inference and make addition in the hands of assessee. 8. Ld. AR very forcefully and repeatedly contended that the AO has not found a single deficiency in the purchases, stocks, sales, books of accounts and financial transactions of assessee. Further, there is no connection of purchases made by assessee from father's proprietorship concern and the gift received from father and yet the AO has wrongly termed the same as circular transaction and made addition. He submitted that the AO's action is based on mere surmise, suspicion and presumption. 9. Ld. AR next submitted that in present case, the AO has not even rejected assessee's books of account and there is no flaw, fallacy or deficiency pointed out by AO in books of assessee. Therefore also, there cannot be any case for treating the impugned deposit in ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tna), it has been held that, when books of account of the assessee were 3 R. S. Diamonds India Private Limited accepted by the revenue as genuine and cash balance shown therein was sufficient to cover high denomination notes held by the assessee, then the assessee was not required to prove source of receipt of said high denomination notes which were legal tender at that time. In the case of M/s. Hirapanna Jewellers (ITA No. 253/Viz/2020 dated 12.5.2021), it was held that when the cash receipts represented the sales which has been duly offered for taxation, there is no scope for making any addition under section 68 of the Act in respect of deposits made into the bank account. 6. I notice that the decision rendered in both the above said cases support the case of the assessee. Accordingly, in the facts and circumstances of the case, I am of the view that the addition of Rs. 45 lakhs made in the hands of the assessee is not justified, since the said deposits have been made from the cash balance available in the books of account. Accordingly, I set aside the Fine Gujranwala Jewellers, order passed by learned CIT(A) on this issue and direct the Assessing Officer to delete the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the colourable device of purchase from father and ultimate receipt by way of gift. (iii) The assessee made purchase from father on 04.10.2016 against which payment was made on 08.03.2017. Why the assessee consumed more than 6 months in making payment to his father? Further, the assessee did not pay any interest to his father. Why so? (iv) Pages 1 and 7 of Paper-Book-I filed by assessee show that there was an outstanding loan of Rs. 18,14,615/- as on 31.03.2017 receivable by assessee from father's proprietorship concern M/s Ambika Jewellers and the assessee received interest of Rs. 1,34,090/- from same concern. The question here arises as to why the assessee did not set off loan receivable against purchase price payable? Why father made gift to assessee instead of re-paying loan taken from assessee? 12. We have considered rival submissions of both sides and perused the orders of lower-authorities as also the documents filed in Paper-Book to which our attention has been drawn. The dispute in present case is qua the addition of Rs. 49,00,000/- made by AO on account of unexplained cash deposit in Bank A/c. Admittedly, the assessee made deposit on 15.11.2016 immediately after d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... father nor made any addition qua the gift received from father. Thus, the transactions of purchase and receipt of gift are not disturbed by AO. The AO has, however, made addition treating the deposit in bank a/c as unexplained whereas the source of deposit in bank a/c is very much available in Cash-Book of assessee and the same Cash-Book is not even rejected by AO. It is also noteworthy that the AO has made addition u/s 69 even while accepting the books of account of assessee, the books of account in which the impugned cash deposit in bank a/c is recorded. Nobody can dispute that the section 69 applies only when a sum is not recorded in books of account whereas the position of present case is just opposite in as much as the impugned deposit is already recorded in cash-book accepted by AO. Therefore, in the light of decisions relied by Ld. AR as cited in foregoing para, the addition made by AO is not sustainable. Although we have noted the arguments of Ld. DR for revenue in foregoing para but those arguments are only to support the case made out by AO but do not have any merit and not acceptable. Consequently, we delete the addition made by AO. The assessee succeeds in this appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
