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TMI Blog2025 (2) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... verse view is not backed up by relevant evidence/material and therefore the action of AO, which has been rightly set aside by the ld.CIT(A) and hence cannot be interfered.
Finding of the AO that such abnormal sales could not be achieved immediately upon announcement of demonetization by the Governmentare bereft of any concrete evidence to prove otherwise on record. It is trite law that no addition could be made merely on the basis of suspicion, conjectures and surmises.Moreover, since cash generated out of sales has been credited in the books of accounts, the provisions of section 69A could not be invoked in the present case.
Thus additions are not sustainable in the eyes of law and hence, we are of the considered view that the action of the ld.CIT(A) in deleting the addition need not be interfered and hence we dismiss the grounds raised by the Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by NFAC Delhi falling under the jurisdiction of this office Necessary actions wherever necessary, in myoect of all the other 18 cases barring the instant case were taken within the respective que dates. However in the case of Mis Viswa and Devji Diamonds Pvt. Ltd. due to technical glitch the said order (appellate order for 2017-18 dated: 24/09/20221 did not account the aponи! module till 31/09/2022 or till a later stage Hence the said order could not be downloaded or brought to the awareness of the incumbent for further action at a time when the same was to be performed. Communication, enclosing the list of appellate cases for the month of September 2022, received via e-mail from the O/o PCIT-1 Cbe may be perused in this connection (copy enclosed) It can be observed that the list of cases is devoit of the instant case. Le M/s Viswa and Devji Diamonds Pvt. Ltd. This omission of the appellate case from the report downloaded esa concurrent jurisdictional office from the appropriate module testifies the technical error that is being discussed. The disposal of this appeal was identified only when the assessee approached this office seeking actions as per the directions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the books in the form of cash sales, supported by sales voucher and declared in the VAT return. The cash sales were created fictitiously by the assessee company, merely to build an explanation for the cash deposits in to the bank accounts. 2.6 However, it is also true that sales happened in Jewellery shops all over India when demonetisation was declared by the Hon'ble Prime Minister during the night of 8th November. Considering the submissions made by the assessee company in reply to the show cause letter, 25% of the sales made on 08.11.2016 amounting to Rs. 3,01,01,500/- is assessed to have been made (25% of 644 sales in Coimbatore shop 161 and out of 94 sales in Chennai Shop = 24, which is considered possible within the 3 hours available on 08.11.2016 under extraneous circumstances). 2.7 Section 68 of the IT Act is for taxing the unexplained credits, where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income- tax as the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh book and demonstrated that the cash was deposited in SBN was out of sales proceeds of stock on hand. The assessee also relied on the following judgments: (i) CIT vs Devi Prasad Vishwnath Prasad [1969] 72 ITR 194 (SC) (ii) CIT vs Kailash Jewellery House - ITA 613/2010 Delhi HC (iii) Kishore Jeram Bhai Khaniya vs ITO - ITA 1220/Del/2011, ITAT Delhi (iv) CIT vs Vishal Exports Overseas Ltd -TA No. 2471 of 2009 Guajarat HC (vi) Singham Exim P Ltd vs ITO - ITA No.6520/Del/2018, ITAT Delhi (vii) Sri Sanand Textile Industries Ltd vs DCIT-ITA No.995/AHD/2014, ITAT Ahmedabad (vii) Anantapur Kalpana vs ITO - ITA No.541/Bang/2021, ITAT Bangalore (vii) ACIT Vs. HirapannaJewellers - ITA No.253/Viz/2020, ITAT Vishakapatnam. (vii) ITO Vs. SencoAlankar - ITA No.10/Kol/2021, dated 27.06.2022 ITAT,Kolkata. and pleaded to delete the addition made by the AO. The ld.CIT(A), after considering the submissions made by the assessee and case laws relied upon by the assessee, held that the assessee's submissions with regard to cash deposits during demonetization period is supported with documents and evidences and case laws relied upon by the assessee are applicable to the facts of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) erred in deleting the addition made u/s.69A r.w.s. 115BBE of the Act, even though the assessee has failed to substantiate the sales made on one day i.e. 08.11.2016 without having proper infrastructure to make bills of 783 nos. within 3 to 4 hours. Further, the ld.DR challenged the factual finding of the ld.CIT(A) that AO has noticed only the suspicious features of the transactions. Further, the ld.DR argued that the ld.CIT(A) has erred by ignoring the availability of infrastructure and practicality of making 768 invoices which works out to making every invoice within 17 seconds, collection of corresponding sales proceeds in cash and delivery of such articles within 3 to 4 hours before the demonetization commences at midnight of 08.11.2016. The ld.DR also raised a point that the ld.CIT(A) to appreciate that recording of transactions below Rs. 2.00 Lakhs in order to by pass the provisions of Rule 114C(2) r.w. Sl.No.18 of Rule 114B of the Income Tax Rules, 1962. The ld.DR also relied on the decision of CIT Vs.Durga Prasad More - [1971] 82 ITR 540(SC) and Calcutta Discount Co.LtdVs.ITO (1961) - 41 ITR 191 (SC) in support of human probability and cash sales and prayed for dismissin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply to Notice under Section 142(1) of the Act 575 17 28.11.2019 Notice under Section 142(1) of the Act 581 18 02.12.2019 Reply to Notice under Section 142(1) of the Act 583 19 --- Purchase Ledger 584 20 --- Stock Ledger for AY: 2017-18 586 21 05.12.2019 Notice under Section 142(1) of the Act 593 22 07.12.2019 Reply to Notice under Section 142(1) of the Act 595 23 --- Details of CST Purchases 596 24 --- Details of Purchase returns 599 25 --- Details of RD Purchase 600 26 --- Details of URD Purchase 604 27 05.12.2019 Show Cause Notice issued under Section 143(3) of the Act 613 28 --- Show Cause Notice issued under Section 143(3) of the Act 614 29 --- Details of Purchase for April 2016 & May 2016 615 30 06.12.2019 Notice under Section 142(1) of the Act 616 31 --- Reply to Notice under Section 142(1) of the Act 618 32 --- Details of Veekay Diamants purchase 619 33 12.12.2019 Notice under Section 142(1) of the Act 623 34 18.12.2019 Reply to Notice under Section 142(1) of the Act 625 35 --- Form WW-Audit Report under Section 63A of The Tamil Nadu Value Added Tax Act, 2006 626 36 --- Sales Invoices 636 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts customers which was less than Rs. 2.00 lakhs per person and there was no requirement on the part of the assessee to obtain details like name, address and PAN of the buyers. In response to notice u/s. 142(1) of the Act, the assessee had furnished cash book, sales register, purchase register, bank statements along with stock registers for the relevant period. The stock moved out of the books on account of sales made by the assessee has established from stock registers. The VAT returns and annual audit report under TNVAT Act for the relevant period reflected such sales which have been accepted by the VAT authorities. The assessee has maintained proper books of accounts which are subjected to tax audit u/s. 44AB of the Act. The assessee also maintained quantitative details of the stock of Gems, Gold and Dimond separately and furnished before the lower authorities, which have not been rejected. The books of accounts of the assessee have been accepted by the lower authorities while framing the assessment and not rejected by pointing out any defects. 9. On perusal of the records and facts and circumstances of the case, we are of the considered opinion that when the sale has been refle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he allegation of Ld. AO is that such abnormal sales could not be achieved by the assessee immediately upon announcement of demonetization by the Government. However, such allegations are bereft of any concrete evidence on record. It is trite law that no addition could be made merely on the basis of suspicion, conjectures and surmises. In the present case, the assessee has duly discharged the burden of establishing the source of cash deposit and the onus was on Ld. AO to disprove the same. However, except for mere allegation and few statistics, there is nothing on record to support the conclusions drawn by Ld. AO that the cash deposited by the assessee was her unaccounted money. There is no finding by Ld. AO that any particular sales affected by the assessee exceeded threshold limit which cast an additional obligation on the assessee to obtain requisite particulars from the customers. Since cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked in the present case. Therefore, on the given facts, the impugned additions are not sustainable. By deleting the same, we allow corresponding grounds raised by the assessee." 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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