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TMI Blog2025 (3) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the SBNs relied upon by the AO to take an adverse 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. The finding of the AO that such abnormal sales could not be achieved before the announcement of demonetization by the Government, is bereft of any concrete evidence to prove otherwise on record. The reliance on the decision of the Hon'ble supreme court in the case of Durga Prasad More, is not applicable to the present facts of the case, as the assessee has furnished the documents and records which are submitted to the statutory authority like TNVAT department and discharged the taxes on monthly basis, apart from the books of accounts audited by a Chartered accountant. No addition could be made merely on the basis of suspicion, conjectures and surmises. 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. The impugned additions are not sustainable in the eyes of law and hence, we are of the considered view that the action of the CIT(A) in deleting the addition need no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Rules, 1962. This relieved the assessee of the obligation of ensuring PAN of the purchaser while raising bills. 8. The Ld. CIT(A) failed to appreciate the fact that, by delaying filing of audit report and ROI, the assessee company bought itself sufficient time to tamper with its books of account to accommodate the cash sales. 9. The Ld. CIT(A) failed to appreciate the fact that all the details required to be filed u/s 142(1) were not filed by the assessee within the time stipulated, thereby denying the AO the opportunity to make proper investigation. 10. The Ld. CIT(A) failed to appreciate the fact that the assessee failed to submit even basic evidence like name and address of parties to whom cash sales are claimed to be made and hence AO has rightly treated the cash credits in books of accounts as unexplained credits and added to income of assessee for the relevant assessment year. 11. For these and any other grounds that may be adduced at the time of hearing, the order of the CIT(A) may be quashed and that of the AO restored. In brief the sole ground before us raised by the revenue is the ld.CIT(A) has erred in deleting the addition of Rs. 16,64,18,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Cash was introduced into 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. 2.7 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 not 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 income of the assessee of that previous year. Since the credits are bogus and fictitious, the money deposited is not brought to tax u/s 68 of the IT Act. 2.8 However, money was deposited into the bank account of the assessee company and therefore was the owner of the money. Under section 69A of the IT Act 1961, where in any financial year the assessee is found to be the owner of any money, bullion, jewelry or other valuable article and such money, bullion, jewelry or valuable article is not recorded in {the books of account, if an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NVAT Department and demonstrated that the cash was deposited in SBN was out of sales proceeds of stock on hand. However, the AO completely ignored the submissions. The assessee submitted that the AO had commenced the assessment with preconceived notion without considering the reply/submissions filed and straightaway relying on the Hon'ble Supreme Court in the case of Durga Prasad More, which deals with the theory of human probabilities particularly when self-serving statements in a document are relied upon. Since the case law is not applicable to the present case as the AO has not found any discrepancy in any of the documents available before him. The AO has not discharged his primary responsibility of dis-proving the documents submitted and therefore the addition made is preposterously liable to be set aside. In support of the claim, the assessee relied on the following judgments: - Smt. Charu Aggarwal Vs.DCIT (2022) 140 taxmann.com 588 (Chandigarh Trib) - CIT Vs.Smt. P K Noorjhan 103 Taxmann 382 (SC) (1999) 237 ITR 570 (SC) - ACIT Vs. Hirapanna Jewellers - ITA No.253/Viz/2020, ITAT Vishakapatnam - 189 ITD 608 (2021) - B.Krishan Kumar Vs.ITO [2019] 107 taxmann.com 464 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the assessee company has suddenly carried out retail sales; how in no time customers rush to his showroom without even ready with adequate chairs and tables to handle retail customers. 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. From the table 1 & 2 in page No.5 of the Assessment order, it is found that the assessee company never had any cash sales from April 2015 to March 2017, only the sale of jewellery to the public except for 8 days in the month of November 2016. During these 8 days, the assessee company has reported cash sales of around 16.77 crores which is very unusual and abnormal. 6.2 The ld.DR also relied on the decision of CIT Vs.Durga Prasad More - [1971] 82 ITR 540(SC) and Calcutta Discount Co.Ltd Vs. ITO (1961) - 41 ITR 191 (SC) in support of human probability and cash sales made by the assessee and prayed for dismissing order of the Ld.CIT(A). 7. Per contra, the ld.AR for the assessee supported the action of the ld.CIT(A) and stated that the ld.CIT(A) is justified in deleting the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n filed by the Respondent 42 18 11.03.2021 Screenshot of response filed by the Respondent 47 19 08.06.2022 Hearing notice u/s 250 of the Act issued to the Respondent 48 20 17.06.2022 Screenshot of response filed by the Respondent 52 21 24.08.2022 Hearing notice u/s 250 of the Act issued to the Respondent 54 22 20.10.2022 Hearing notice u/s 250 of the Act issued to the Respondent 58 23 26.10.2022 30.10.2022 04.11.2022 16.11.2022 Screenshot of response filed by the Respondent 62 7.2 In this paper book the ld.AR drew our attention to particularly the documents submitted before the AO as well as the ld.CIT(A), the assessee's bank accounts and the statement/ledgers thereon along with the Cash book, sales ledger, VAT returns, Purchase ledger, Stock registers, Purchase returns, Annual audit report under TNVAT Act, Sales Invoices for the A.Y. 2017-18. The AO has verified all the documents and has not rejected the books of accounts filed along with tax audit report of the assessee and not doubted the stock and purchases but with the assumption of impracticability of sales made on a particular days i.e. 01.11.2016 to 08.11.2016 as unexplained and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 submitted the month wise abstract of purchases, sales, invoice wise details from 01.11.2016 to 08.11.2016, cash deposited in the impugned year along with prior F.Y. 2015-16, the details of cash deposited from 01.11.2016 to 08.11.2016 and from 09.11.2016 to 30.11.2016. These books of accounts, statements and other documents furnished by the assessee before the lower authorities, which have not been disputed nor 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. 8.1 On perusal of the records and facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Sonny Fireworks Pvt ltd vs DCIT - Chennai ITAT - ITA No.1081/2024 8.2 Further, the coordinate bench decision in the case of Smt. Durga Devi Mundhra vs. ITO in ITA No.1228/Chny/2023, dated 25.04.2024 is applicable to the present case on hand, wherein the Tribunal held as under: "6. We are of the considered opinion that when the sale has been reflected in the books of accounts and offered to tax, adding the same again would amount to double taxation which is impermissible in law. The cash sales proceeds have been credited in the books of accounts and the same form part of assessee's cash book. On these facts, it could very well be said that the assessee's claim was backed up by sufficient documentary evidences. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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