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2023 (2) TMI 1236 - AT - Income TaxAddition u/s 68 - Bogus cash sales - AO rejecting the Cash Sales being claimed to be made out of Opening Stocks and purchases made during the year duly supported with the VAT paid on such cash sales as per the VAT returns of the period under consideration - HELD THAT:- Admittedly, the assessee has made cash sales out of the opening stock and purchases made during the year duly supported with audited stamen of account and VAT Return. The authorities below has neither pointed out any discrepancy in the audited books of account nor rejected assessee’s books. CIT(A) has made contradictory observation in one para that there was no cash sale in the earlier year FY 2015-16 whereas in another para he observed that there was cash sale of Rs. 560204/- in FY 2015-16. Merely, making a comparison of cash sales with the preceding assessment year in hypothetical manner bases on assumption, surmises and conjectures without supporting corroborative documentary evidence to disprove disputed cash sales as bogus sales cannot be approved. There is no bar in making cash sales by the manufacturer. AO has also admitted that there was cash sale of Rs. 560204/- in Financial Year 2015-16. Thus, the AO wrongly held that no goods in cash was sold during the earlier Financial Year 2015-16. The AO failed to appreciate that there was no excess sale of 546 kgs of shoddy yarn in the range of Rs. 105/- to Rs. 145/-. AR explained that the goods were sold out of balance stock of shoddy yarn and even at the year end, the unsold stocks of shoddy yarn was 2960 kgs with the support of Paper book placed on record. In the case of “Principal Commissioner of Income Tax, 20, Delhi v. Akshit Kumar”, [2020 (11) TMI 873 - DELHI HIGH COURT] held that the quantum figure and the closing stock which stood accepted in the earlier years had to be taken as actual stock available with the Respondent-Assessee. In view of these facts, the sales made by the Respondent-Assessee out of its opening stock were not treated as unexplained income, to be taxed as income from other sources. In another case of ‘Anantpur Kalpana v. Income-tax Officer’, [2021 (12) TMI 599 - ITAT BANGALORE] observed that since the sale proceeds for which cash was received from the customers was already admitted as income and if the cash deposits are added under section 68 of the Act that will amount to double taxation once as sales and again as unexplained cash credit which is against the principles of taxation. On similar fact, in the case of Hirapanna Jewellers [2021 (5) TMI 447 - ITAT VISAKHAPATNAM] as observed that since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of.Kailash Jewellery House [2010 (4) TMI 1070 - DELHI HIGH COURT] and Vishal Exports Overseas Ltd. [2012 (7) TMI 1110 - GUJARAT HIGH COURT] We hold that the disputed cash sales by the appellant assessee were made out of Opening Stocks and purchases made during the year which are offered for Taxation as revenue receipts as per audited books of accounts and financial statements filed before the authorities below and before us, duly supported with VAT Return. As such, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. Therefore, the addition is deleted. Assessee appeal allowed.
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