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2023 (12) TMI 867 - AT - Income TaxAddition u/s 68 - unexplained cash credit - unexplained cash sales proceeds/receipts received from the customers - addition based on the statement u/sec 131 - CIT(A) deleted addition - HELD THAT:- The assessee has submitted the details of cash sales/receipts and party wise details of sales above and below Rs. 2 lakhs was submitted. Further the Ld.AR demonstrated the sample Tax Invoice below Rs. 2 lakhs in the demonetization period and the invoice contains, name and address etc and the Ld.AR referred to the details of deposits made out of the cash sales and the assessee has been consistently maintaining the stock of Rs. 21.10 crs for the F.Y 2015-16 and for F.Y 2016-17 it was maintained at Rs. 17.69crs as per the audited financial statements, further the cash sales are part of the stocks maintained by the assessee which is not disputed. Since the cash sales proceeds/receipts received from the customers are reflected in the Audited Profit & Loss account as income/ receipts and again if the cash deposits are added under section 68 of the Act, it will amount to double taxation once as sales and again as unexplained cash credit which is against the principles of taxation. AO has not pointed out any specific adversity but made a generalize additions covering the demonization period, cash deposits and RTGS credits without considering the factual aspects and primary evidences. A.O has failed to make further enquiries on the information filed and the assessee has discharged the initial burden placed by submitting the information and details. AO has not disputed on the quantity of stocks maintained in the register, and stock valuation in the Audited financial statements and also the turnover reflected by way of cash sales and bank credits. The assessing officer has accepted the sales and corresponding nexus with the purchases and closing stock of goods. We find the CIT(A) has dealt on the facts, provisions of law, submissions and judicial decisions and has passed a conclusive and reasoned order. Accordingly, we do not find any infirmity in the order of the CIT(A) on the disputed issues and uphold the same and dismiss the grounds of appeal of the revenue. Estimation of profit on the sale value/ receipts - CIT(A) has granted relief to the assessee on the alleged additions made by the A.O, but estimated the profit element on sales/receipts - We find the books of accounts are Audited and the assessee has disclosed the sales under the heading revenue from operations in the Profit & Loss account, whereas the A,O has not accepted certain sales value transactions and rejected the books of accounts u/s 145(3) of the Act. Whereas the CIT(A) having deleted the additions considering the submissions, provisions and evidences produced in support of cash sales deposits in the bank accounts, which are based on the invoices and stocks maintained and is not disputed. But the CIT(A) having granted the relief to the assessee on the sales which are already offered and credited to the Profit & Loss account and the profit embedded is part of sale value. Again estimating the profit element @1.35% on the sale values is subjected to double taxation, which is not acceptable/permissible in law. We considering the facts, circumstances and material evidences substantiating the sale values are of the view that the estimation of income @1.35% on the sales value is not warranted. Accordingly, we direct AO to delete the addition of impugned estimation of income on percentage basis on sales values and allow the grounds of appeal filed by the assessee.
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