TMI Blog2021 (2) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... see has taken the following revised grounds of appeal:- 1. The Learned CIT (A) as well as Ld. AO has grossly erred in law and facts in making the assessment under section 153A for the assessment year while for the Assessment year 2011-12, 2012-13, 2013- 14, 2014-15, 2015-16 and 2016-17 from initiation to completion of assessment proceedings have been conducted under section 153C of the Income Tax Act therefore complete assessment proceedings for the Assessment year 2017-18 is illegal and void ab initio. 2. The Learned CIT (A) has grossly erred in law and facts in confirming the assessment order as framed by Ld. AO on behalf of erroneous findings therefore did not follow the provisions of section 34 of evidence act. (a) As Ld. AO has rejected the books of accounts of the assessee though it was regularly kept in the course of business, or (b) Without issuing any show cause notice for rejecting the books of accounts, or (c) Without mentioning the reasons of rejection of books of account in the notices, 3. The Ld. CIT(A) has grossly erred in law and facts in confirming the assessment order as framed by Ld. AO who made huge addition without issuing show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of I T Act. 2. Briefly stated, the facts of the case are that in this case, original return of income was filed on 26.03.2018 for the A.Y 2017-18 in the office of the ITO, Ward-1(3), Bikaner declaring total income at ₹ 1,01,600/-. Cash of ₹ 5,34,000/- was seized by the SHO Police Station, Shastri Nagar, Jaipur, from the possession of Shri Nand Lal Joshi and Shri Nand Lal Pandya on 21.10.2016, which belongs to Shri Om Prakash Karnani. Consequently, a requisition u/s 132A of the Income Tax Act, was issued by the Pr. DIT(Inv.), Jaipur on 27.10.2016 which was executed on 29.10.2016. The cash was subsequently seized on 29.10.2016. A search was conducted on 29.10.2016 in the case of Shri Nand Lal Joshi and Shri Nand Lal Pandya Group, Jaipur to which the assessee belongs. Cash of ₹ 5,34,000/- were found and seized as per annexure prepared during the course of search. Shri Om Prakash Karnani also in his statement dated 26.10.2016 recorded u/s 131 of the I.T. Act, 1961 has also admitted that the aforesaid cash belongs to him. During the assessment proceeding, a show-cause vide letter dt. 06/10/2018 was issued to the assessee to explain the source of cash seized. Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date on which the cash was seized, there is no withdrawal entry in the cash book either on 20.10.2016 or on the day of seizure. On the day of seizure the entry in cash books shows income tax (attachment). On the facts and in the circumstances of the case, the addition made by the Ld. AO is confirmed. Against the said finding, the assessee is in appeal before us. 4. During the course of hearing, the ld. AR submitted that the assessee Shri Om Prakash Karnani is a regular tax payer and originally filed his ITR for the Assessment year 2017-18 on 26.03.2018 by disclosing the income from Business Profession and interest from saving bank. The matter is triggered with a Search and Seizer proceedings as conducted by Police Thana Shastri Nagar under their territorial jurisdiction upon Nand Lal Joshi and Nand Lal Pandya two persons, who were carrying cash of ₹ 5,34,000/- from assessee s shop M/s Vinayak Enterprises situated at F-1, Jai Matadi Complex, Sikar House, Jaipur dated 21.10.2016. After having intimation of such proceeding, the Income Tax department had taken the statement of such persons under section 131 of Income Tax Act, 1961 on 22.10.2016 of Nand Lal Joshi and of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) and the assessee has filed present appeal before the Tribunal. 6. It was submitted that the assessment proceedings were conducted for the Assessment year from A.Y. 2011-12 to 2016-17 in pursuance to notice as issued under section153C of the Income Tax Act, 1961 while assessment proceedings for the Assessment Year 2017-18 had been conducted under section 153A (according to the Show cause notice issued on 13.11.2018) of the Income Tax Act, 1961 which should have been conducted under section 153C in consonance with the other assessment years therefore assessment proceedings for the AY 2017-18 is bad in law and liable to be null and void. In support, reliance was placed on decision of Co-ordinate Bench s in the matter of Sh. Navrattan Kothari Vs. ACIT (425/JP/17 Dt. 31.12.2017). 7. It was further submitted that the books of accounts which are kept in regular course of business should be treated as an evidence. We would like to quote the provision of Section 34 of Evidence Act; 34. Entries in books of accounts including those maintained in an electronic form], when relevant. [Entries in books of accounts, including those maintained in an electronic form], regularly kept i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espite of it Ld. AO did not ask a single question about sales bill during the course of assessment proceedings even when the assessee produced all sales and purchase bills during the course of proceeding. (c) So far as concern about opening cash balance of ₹ 595790/- as on 01.04.2016 which was questioned by Ld. AO was sufficiently backed with the statement of affairs of the assessee for the FY 2015-16 where in the same Cash balance is being shown as on 31.03.2016 along with Cash flow statement for the Financial year 2015-16 as submitted before Ld. AO during the course of assessment proceedings sufficiently described the transactions and give the strengthening the opening cash balance of ₹ 595790/-. It is also important to mention here the Ld. AO did not dispute this document which is clearly indication of acceptance at his level. (d) It is also important to mention here that the Ld. AO has made six assessment preceding to the previous year pertained to the AY 2017-18, under which during assessment proceeding of AY 2016-17 he has accepted all the Financial statement and computation of income which was submitted by the assessee and which is explicitly mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssesse in his Cash books for ₹ 5.95.790/- was fully proper and genuine. (g) Ld. AO alleged that Opening Cash balance as taken in Cash books is ₹ 5,95,790/- was not supported with the evidences and cash balance was Zero just at the end of year prior to search, both the allegation are based on surmises and perverse findings. (h) Here the Ld. AO made addition without any further enquiry about the documents and books of accounts submitted. Thus the Ld. AO was not justified in properly considering and appreciating explanations filed time to time and ignoring documents and books of accounts without any reasonable cause and therefore making addition is based merely on arbitrary manner. (i) At the time of investigation assessee has already accepted that the seized cash belongs to his firm M/s Vinayak Enterprises and the cash was generated from the day to day transactions of his business. (j) It is well settled principle that the affidavit is an strong piece of evidence if it is ignored without making necessary enquiry, here in this case Investigation Wing and Ld. ACIT both did not comply necessary action for rejecting the affidavit therefore contention as co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee along with copy of cash flow statement and the statement of affairs, the return of income was accepted. It was accordingly submitted that once the return of income for A.Y 2016-17 has been accepted by the same Assessing Officer who has passed the impugned order and that to, on the same date and no adverse finding has been recorded by the Assessing Officer, as far as opening cash balance of ₹ 5,95,790/- is concerned, the same has been duly substantiated and examined by the Assessing Officer and in absence of any adverse finding in A.Y 2016-17, no adverse finding can be recorded for such opening cash balance in A.Y 2017-18. Regarding cash sales executed during the year under consideration, it was submitted that the same are duly supported by the sales and purchase bills in respect of which no adverse finding has been recorded by the Assessing Officer. It was accordingly submitted that when the gross receipt from the business amounting to ₹ 17,88,365/- and net profit of ₹ 2,51,604/- have been duly accepted by the Assessing Officer, cash sales executed during the year have not been disputed and therefore, in absence of any adverse finding regarding sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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