TMI Blog2024 (4) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... ccountant Member And Sh. Anikesh Banerjee, Judicial Member For the Appellant : Sh. Rohit Kapoor, CA and Sh. V.S. Aggarwal, ITP For the Respondent : Sh. Ravinder Mittal, Sr. DR ORDER PER: ANIKESH BANERJEE, JM: The instant appeal of the assessee was filed against the order of NFAC Delhi, [(in brevity the CIT(A) ] order passed u/s 250 of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2017-18, date of order 21/11/2023. The impugned order was emanated from the order of the ld. Income Tax Officer, Baramulla, (in brevity the AO) order passed u/s 144 of the Act, date of order 22/12/2019. 2. The assessee has taken the following grounds: - 1 I. On the facts and circumstances of the case the Id. CIT(A) vide order u/s 250(6) dated 21,11,2023 has erred in confirming the addition made by the AO to the tune of Rs. 172200/- made u/s 69A on account of cash deposited during demonetization period. 2 2. That the l.d. CIT(A) has erred in confirming the addition of Rs. 1722000/.- without appreciating that the assessee was running a small business of sale purchase of electrical and other allied appliances. That the addition confirmed by the (II (A) is contrary to the fact that the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee deposited cash in bank account in J K bank in different accounts. The total cash was deposited amount to Rs. 59,05,408/-. Out of that the ld. AO found that Rs. 17,22,000/-was deposited in demonetization period. The rest amount of Rs. 41,83,408/- which was deposited other than demonetization period. The ld. AO passed the order U/s 144 with addition of Rs. 17,22,000/- U/s 69A of the Act with the total income of the assessee. Further, the ld. AO by invoking Section 44AD of the Act had calculated net profit @ 8% on the rest amount of Rs. 41,83,408/- which works out to Rs. 3,34,672/- which was also added back with the total income of the assessee. Aggrieved assessee filed appeal before the ld. CIT(A) and submitted all relevant documents. The assessee explained that the ld. AO had made the mistake in calculation of cash deposit in demonisation period. The correct figure will be amount to Rs. 6,62,400/- and not the amount to Rs. 17,22,000/-. Out of the amount to Rs. 6,62,400/- some cash were deposited in legal note. So, the balance amount to Rs. 4,31,000/- was deposited in demonetisation period in SBN. In appeal order the ld. CIT(A) has accepted the reconciliation but rejected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the table is inserted below: - DETAIL OF CASH DEPOSIT DURING THE DEMONETISATION PERIOD J K GRAMEEN BANK '3538020100000217 DATE DEMONETISATION NUMBER AMOUNT TOTAL AMOUNT 10.11.2016 1000 27 27000 101500 500 149 74500 12.11.2016 1000 28 28000 145000 500 234 117000 13.11.2016 1000 10 10000 64500 500 109 54500 15.11.2016 1000 5 5000 57500 500 105 52500 16.11.2016 1000 11 11000 62500 500 103 51500 01.12.2016 2000 6 12000 13000 100 10 1000 02.12.2016 2000 12 24000 24000 06.12.2016 2000 78 156000 156000 20.12.2016 2000 5 10000 28400 500 3 1500 100 64 6400 20 50 1000 19 500 9500 TOTAL 652400 652400 7. The ld. AR further argued that the assessee is registered under VAT Act , bearing TIN-01922094101 and declared total turnover in impugned assessment year amount to Rs. 77,36,192.33. The turnover ascertained by the ld. AO is wrong. The ld. AR also placed that the cash was deposited bank out of the sales proceed. The ld. AR further argued that the assessee is whole sellers and in earlier years the assessee had conducted Audit and net profit varies from @1.95% to @2.63%. The relevant part of the assessee s submission is reproduced as below: 12.2 The sales conducted by the assessee, as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale transaction under VAT, hence, the Assessing Officer is precluded from making contrary findings on the issue when the sales are not doubted. The other contention of the ld DR is that the assessee has not maintaining stock register properly and date wise stock position are not given. The Assessing Officer made the said observation without rejecting the books of account form which true profit and loss accounts could be ascertained and there is no quarrel on this issue. The lower authorities cannot place reliance on the circumstantial evidence which is only conjectures and surmises and the said approach of the ld CIT(A) is devoid of merit it deserves to be rejected. Further, the income of the assessee has to be computed by the Assessing Officer on the basis of available material on record and it is very important to have direct evidence to make an addition rather than circumstantial evidence. When the assessee gives any reply or submission or any documents to the Assessing Officer, it is duty of the Assessing Officer to examine the same in the light of the available evidence. In the present case the Assessing Officer and the ld CIT(A) have concluded the findings on the basis of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income notwithstanding anything to the contrary contained in sections 28 to 43C of the Act. This income is to be deemed to be the profits and gains of said business chargeable of tax under the head profits and gains of business. However, the said provisions are applicable where the gross receipts paid or payable does not exceed Rs. 40 lakhs. 8. Once under the special provision, exemption from maintaining of books of account has been provided and presumptive tax at the rate of 8 per cent of the gross receipt itself is the basis for determining the taxable income, the assessee was not under obligation to explain individual entry of cash deposit in the bank unless such entry had no nexus with the gross receipts. The stand of the assessee before the Commissioner of Income-tax (Appeals) and the ITAT that the said amount of Rs. 14,95,300 was on account of business receipts had been accepted. Learned counsel for the appellant with reference to any material on record, could not show that the cash deposits amounting to Rs. 14,95,300 were unexplained or undisclosed income of the assessee . 8.4. Hon ble High Court of Punjab And Haryana Commissioner of Income-tax v. Rajinder Parshad Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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