TMI Blog2022 (11) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... (in short, the NFAC) dated 20/09/2021 for the Assessment year (AY) 2017-18. The assessee has raised solitary ground of appeal which reads as under : 1. The ld. CIT(A), NFAC has erred in law and on fact to confirm AO s addition being unexplained investment u/s 69A for Rs. 15,38,500/- in form of cash deposit by appellant in her two bank account with Axis Bank. 2. Brief facts of the case are that the assessee is an individual and engaged in the business of jewellery designing and shows business income. The assessee filed her return of income for A.Y. 2017-18 on 15/05/2017 declaring income of Rs. 3,64,130/-. The return of income was selected for scrutiny. During the assessment proceedings, the Assessing Officer noted that as per information available with him, the assessee has made cash deposit of Rs. 12,18,000/-, during demonetization year in her two bank accounts maintained with Axis bank. The Assessing Officer prepared a summary of cash deposit during demonetization year, during remaining period of financial year (FY) and other credit entries in the following manner: Bank Name Account No. Cash deposit during demon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29/12/2019. 4. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). The appeal of the assessee was migrated before the NFAC. Before the ld. CIT(A)/NFAC, the assessee filed detailed written submission. The submission of assessee is recorded in para 8 of order of ld. CIT(A)/NFAC. In the submission, the assessee stated that she has derived income from jewellery making/designing from gold received by her customers on labour basis. The assessee furnished details of cash deposited during demonetization year and non- demonetization year in both the bank accounts in the following manner: Name of Bank Cash deposit during the demonetization on period Cash deposit during the nondemonetization on period Total Rs. Axis bank 915020009055079 9,68,000/- 1,05,500/- 10,73,500/- Axis bank 913010054129047 2,50,000/- 2,15,000/- 4,65,000/- Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the appellate proceedings, the assessee did not bring any material on record to establish genuineness of cash deposit. Further aggrieved, the assessee has filed the present appeal before this Tribunal. 8. We have heard the submission of learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (Sr. DR) for the Revenue. The ld. AR of the assessee submits that during the year, the assessee has declared profit @ 25.78% on total labour receipt of Rs. 16,92,935/-, though the deemed profit under Section 44AD could be only Rs. 1,35,435/-. The assessee has made cash deposit as per instruction of Reserve Bank of India (RBI) during the impugned period. The cash deposited by assessee during pre-demonetization year as per post-demonetization year was not abnormal. The assessee has deposited cash out of business/labour receipt received, during the relevant period as well as cash in hand available during pre-demonetization year, the assessee has made cash deposit of Rs. 13,43,585/- during demonetization year, the assessee made cash deposit of Rs. 16,92,395/- and in post-demonetization period i.e. in subsequent financial year. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has shown labour receipt of Rs. 18,62,837/-. Comparing of such labour receipt shows, there is gradual increase in the labour receipt. 11. We further find that before the ld. CIT(A), the assessee has given complete details/month wise labour receipt and highest labour receipt were shown in the month of August and September, 2016. In the month of November (demonetization declared month), the assessee has shown merely receipt of Rs. 14,100/- and similarly in December, 2016 Rs. 29,350/- and in January, 2017 Rs. 14,685/- only. Such receipts are not disputed. The deposits in bank account also shown that the assessee was regularly making deposit in the bank account. We find that on such labour receipt, the assessee has shown substantial gross profit i.e. @ 25.78%. The assessee has also categorically contended before the ld. CIT(A) that closing the cash in hand as on 31/3/2016 with assessee was Rs. 2,56,472/- and cash in hand as on the date of declaration of prohibition of specified bank note of Rs. 500 and Rs. 1000 as on 08/11/2016, the assessee was having cash in hand of Rs. 12,31,067/-. Such details were not disputed by the ld. NFAC. The ld. NFAC simply held that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realised an amount of Rs.38,32,509/- from the debtors standing recovered as on 01.04.2016, such addition made by the A.O. which has been sustained by the Ld. CIT(A), NFAC is not justified. 7.1. I find some force in the above arguments advanced by the Learned Counsel for the Assessee. Admittedly, the assessee has filed its return of income by opting for presumptive tax under section 44AD of the I.T. Act, 1961. Further the gross sales made during the year at Rs.90,66,440/- is not in dispute. The assessee has closed down its business during the subsequent year and assessee has filed the chart showing name and address and PAN of sundry debtors from whom cash payments were received during the A.Y. 2017-18, copies of which are placed at pages 49-50 of the PB which are not disputed by the lower authorities. Therefore, I am of the considered opinion that the A.O. should not have brushed aside the submission of the Counsel for the Assessee without bringing any other material to rebut the same. I find the assessee has filed copies of ledger account and confirmations received from various debtors and also the chart showing the purchases made during the year along with copies of ledgers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 made on account of cash deposit has observed as under: 9. Further, we find the stand of the Assessing Officer to be contradictory. On one hand, he mentioned the high sea sales to be not genuine and on the other, he has accepted the business income disclosed by the assessee. Admittedly, the business income disclosed by the assessee has been worked out after considering the purchases and sales of mobile phones. The sales included the high sea sales also. Once the Assessing Officer has accepted the trading results, he has accepted the sales including high sea sales. Therefore, his stand while making the addition under Section 68 or 69C is contradictory to his stand taken while accepting the business income which is not permissible in law. 15. In view of the above, we hold that the Assessing Officer was not right in concluding that the high sea sales are not genuine. Moreover, Section 68 would also not be applicable in respect of recovery of sales consideration. Once the assessee sold the goods, the buyer of the goods becomes the debtor of the assessee and any receipt of money from him is the realisation of such debt and therefore, we are of the opinion that in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has not been doubted by the authorities below. Thus in our considered view, the impugned amount cannot be treated as unexplained cash credit under section 68 of the Act merely on the ground that the assessee failed to furnish the details of the existence of the parties. 9.6. We also note that the provisions of section 68 cannot be applied in relation to the sales receipt shown by the assessee in its books of accounts. It is because the sales receipt has already been shown in the books of accounts as income at the time of sale only. 9.7. We are also aware of the fact that there is no iota of evidence having any adverse remark on the purchase shown by the assessee in the books of accounts. Once the purchases have been accepted, then the corresponding sales cannot be disturbed without giving any conclusive evidence/finding. In view of the above we are not convinced with the finding of the learned CIT(A) and accordingly we set aside the same with the direction to the AO to delete the addition made by him . 7.6. The various other decisions relied on by the Learned Counsel for the Assessee in the case law compilation and synopsis also support the case of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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