9911796707
TMI Blog2025 (4) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-Tax, Central Circle-7(1), Mumbai, dated 29.03.2022, u/s. 144 read with Section 147 of Act, respectively, for Assessment Year 2017-18. 2. Grounds taken by the assessee in ITA No. 2813/MUM/2024 are reproduced as under: 1. Under the facts and in law, the learned CIT(A) erred in confirming the addition made by the Assessing officer (herein after referred to as "learned A.O.") of Rs. 52,45,78,500/-, being the cash deposit made out of sale proceeds of bullion, gold and silver ornaments, and other precious metals in the bank account, under section 69A of the Income Tax Act, 1961 (the Act) as unexplained money. 1.1 Under the facts and in circumstances, the learned CIT(A) failed to appreciate the fact that the cash deposited in bank account was part of appellant's turnover for the year i.e. Rs. 243.37 crores which has been duly offered to tax in the return of income filed. 1.2 Under the facts and in law, the learned CIT(A) erred in concluding that the appellant was not carrying out any business as well as alleging the parties from whom purchases have been made are bogus since there was survey carried out at their premises. 1.3 Under the facts and in law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1. Grounds taken by the assessee in ITA No. 2814/MUM/2024 are reproduced as under: "1. Under the facts and in law, the learned Commissioner of Income Tax (Appeal) - 49 (hereinafter referred to as "CIT(A)") erred in confirming the reopening of assessment under section 147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 1.1 Under the facts and in law, the learned CIT(A) erred in confirming the reopening based on the reasons recorded by the learned A.O. which are vague and does not indicate any escapement of income. The reasons recorded are nothing but change of opinion, on the basis of facts which were already on record. 1.2 Under the facts and in law, the learned CIT(A) failed to appreciate the fact that the cash deposit has been specifically scrutinized during the assessment proceedings completed under section 143(3) of the Act and hence there was no new material alluding to reopening of appellant's case. 1.3 Under the facts and in law, the learned CIT(A) failed to appreciate the fact that the learned A.O. has reopened appellant's case only on the basis of learned A.O.'s suspicion or doubt. 1.4 Under the facts and in law, learned CIT(A) f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said grounds are without prejudice to each other, independent and in the alternative. 2.2. Grounds taken by Revenue in its cross appeal in ITA No. 3059/MUM/2024 are reproduced as under: "1. On the facts and in the circumstances CIT(A) erred in allowing of the case and in law, the Ld. that assessee could the appeal of the assessee despite the fact not prove the nature and source of credits in his Bank Account. 2. On the facts and in the circumstances CIT(A) erred in of the case and in law, the Ld. appreciating allowing the appeal of the assessee without source of purchases the fact that assessee could not prove the nature and of Rs. 171,26,13,205/-. 3. On the facts and in the circumstances CIT(A) failed to appreciate of the case and in law, the Ld. that credit of Rs. 57,58,527/- over and 4. received above the from addition made on account of the same and information the investigation unit of the same, was rightly added in the assessment order." 3. It is noted that all the three appeals relate to Assessment Year 2017-18. Appeal in ITA No. 2813/Mum/2024 by the assessee is against the assessment order passed u/s. 143(3) dated 30.12.2019. Subsequently, matter was taken up for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, during the year i) Jorss Bullion Pvt. Ltd. ii) Rialto Exim Pvt. Ltd. iii) Rushabh Jewellers iv) Trikesh Tradelink Pvt. Ltd. v) Regalia Gold Pvt. Ltd. vi) Rajmal Lakhichand (Jalgaon) vii) Rajmal Lakhirchand Jewellers 4.1. Ld. Assessing Officer thoroughly analysed the transaction with the parties from whom purchases were made and noted that against the purchases debited in the profit and loss account, sundry creditors reported in the balance sheet are at Rs. 63,50,55,508/-. From this factual position, ld. Assessing Officer observed that out of total purchases of Rs. 169,23,05,543/-, sundry creditors reported at Rs. 63,50,55,508/- shows that the difference of Rs. 105,72,50,035/- ought to have been paid during the year and should reflect in the bank statement of the assessee. However, on verification of bank statements of various bank accounts, as submitted by the assessee, no such payments were reflected therein. 5. On the sales side, Ld. Assessing Officer observed that assessee had shown total cash sales of Rs. 18,75,78,331/- in the month of October and of Rs. 33,68,80,200/- in the month of November of the year under consideration. A peculiar fact was noted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emonetisation period. Entire cash sales are made within a short span of 25 days creating a serious doubt on the conduct of business by the assessee, more particularly, when meagre expenses are debited in the profit and loss account for running the business activity of such high volume. In this respect, it is noted that total salary expense debited amounts to Rs. 1,45,000/- only which shows that not many persons are working with the assessee. Ld. Assessing Officer posed a serious doubt on carrying out of such huge cash sales of more than Rs. 50 crores of jewellery ornaments within a span of 25 days without a team to handle such voluminous transaction as it would require sufficient number of persons for weighing, generating cash bills, handling of cash, maintaining of stock, handling of customers, etc. 5.5. From the sample sales invoices furnished by the assessee, ld. Assessing Officer noted that these bills do not contain complete details of the items sold by the assessee. These invoices only mention "22 CT Gold Ornaments". There is no brief description of the items sold except for total quantity and rate per gram to arrive at the total invoice value after charging VAT. All these i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o substantiate cash deposit made in his bank accounts with documentary evidences. According to the ld. Assessing Officer, assessee could not substantiate exceptionally high cash sale during the year as well as could not establish the genuineness of the purchases recorded in the book of accounts which only reflects inflated stock to create cash balance in the books as on 08.11.2016 by recording fictitious cash sales and making fictitious sales bills. Based on these observations and findings, he held that books of accounts of the assessee are not reliable and are cooked up to channelise unaccounted cash. He thus, rejected the books of accounts u/s. 145 of the Act and held that cash deposit of Rs. 52,45,78,500/- in various bank accounts of the assessee during the demonetisation remained unexplained. By applying provisions of section 69A r.w.s. 115BBE, addition was made in the hands of the assessee. 8. Ld. Assessing Officer also noted from the profit and loss account that an amount of Rs. 13,93,46,773/- was debited on account of bad debts written off during the year. Since no details were furnished, the same was disallowed and added as business income for the year. 9. In completing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the source of deposit of cash in the bank accounts remained unexplained, thereby dismissing the ground raised by the assessee. On the issue relating to disallowance of claim of bad debts written off, assessee claimed that the debtor, Abhishek Enterprises, to whom sales were made in the Financial Year 2014-15 relevant to Assessment Year 2015-16 was untraceable and therefore the amount became irrecoverable which was already offered in the sales turnover for the said Assessment Year. In this respect, copy of ledger account of the said party was furnished from which ld. CIT(A) noted that total sales are in the month of February, 2015 but since no confirmation from the said party was placed on record, ld. CIT(A) arrived at a conclusion that sales shown to this party are non-genuine and thus sustained the disallowance made by the ld. Assessing Officer, dismissing the ground raised by the assessee. 10.2. On the rejection of books of accounts and adopting a GP percentage of 4.76%, ld. CIT(A) noted that profit margin in bullion trading ranges from 0.05% to 0.1% and thus restricted the profit estimation made by the ld. Assessing Officer from 4.76% to 0.1% which resulted in net profit e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and has been pierced to bring out the true intent and purpose of explaining unaccounted money of the assessee. 11.2. Having perused orders of the authorities below, coupled with corroborative documentary evidences placed on record in the paper book, we do not find any reason to interfere with the conclusion drawn by the ld. CIT(A) in respect of deposit of cash in the various bank accounts of the assessee. Accordingly, the addition made u/s. 69A of Rs. 52,45,78,500/- is sustained. Grounds raised by the assessee in this respect are dismissed. 11.3. In respect of claim of bad debts written off during the year, claim of the assessee is that sales on this account has been duly reported forming part of his total sales turnover for Assessment Year 2015-16. In this respect, he had produced copy of ledger account which was analysed by ld. CIT(A), while arriving at his findings. There is no factual dispute on the contents of the ledge accounts as well as reporting of sales in Assessment Year 2015-16. In this respect, we find that claim of any bad debts is to be allowed in terms of section 36(1)(vii) in the year in which such bad debts have actually been written off as irrecoverable in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the enhancement made by ld. CIT(A) by presuming commission without any corroborative material on record. The enhancement so made by ld. CIT(A) is solely on presumption and assumption, more importantly when net profit estimation has already been sustained in the hands of the assessee. Accordingly, notional commission added in the hands of the assessee is deleted. Grounds taken by the assessee in this respect are allowed. 11.6. On the ground raised by the assessee on applicability of provisions of section 115BBE, it is to be noted that in the present case the alleged transaction of deposit of cash in the bank account of the assessee is during the period from 09.11.2016 to 30.12.2016. This issue of imposition of increased rate of tax from 30% to 60% by way of applying provisions of section 115BBE is addressed by Hon'ble High Court of Madras in the case of S.M.I.L.E Microfinance Ltd. Vs. ACIT in WP(MD)2078 and 1742 of 2020, dated 19.11.2024 whereby it is held that Revenue is empowered to impose 60% rate of tax on transactions from 01.04.2017 onwards and not prior to the said date and for prior transaction, Revenue is empowered to impose only 30% tax, as noted in para 17. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the impugned re-assessment order passed u/s. 147, addition is made towards purchase transaction which were already analysed and verified during the course of assessment, resulting into the aforesaid addition in the hands of the assessee. Taking up exercise of re-assessment for again making an addition by disallowing the purchases which have already been examined, amounts to change of opinion which is not permissible within the provisions contained in the section 147 of the Act. 13.2. Similar is the case, in respect of addition of Rs. 57,58,527/- made towards deposit of cash in the re-assessment proceedings. We find that the issues dealt in the re-assessment proceedings for which additions have been made in the hands of the assessee have already been dealt in with in the original assessment u/s. 143(3). 13.3. Ld. CIT(A) has also deleted the said additions by taking into account the original assessment order passed u/s. 143(3). There being no dispute on the facts that the issues taken up in the re-assessment proceedings have already been dealt in the original assessment as also held by ld. CIT(A), we dismiss the grounds raised by the Revenue in this appeal, both on the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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