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2018 (9) TMI 1992

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..... r Rajesh Kumar, Accountant Member: The present appeal has been preferred by the assessee against the order dated 18.02.2015 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2008-09. 2. The grounds raised by the assessee are as under: 1) The Learned Commissioner of Income Tax Appeals-24 erred in confirming that the Learned Assessing Officer was justified in reopening the Assessment U/s 147 of the Income Tax Act, 1961. 2) The Learned Commissioner of Income Tax Appeal -24 erred in sustaining an addition of ₹ 56,19,155/- on account of unexplained cash credit being the peak negative cash balance found during the course of survey. 3) The Learned Commissioner of Income Tax -24 erred in not appreciating the following facts (which were already explained to the Deputy Commissioner of Income Tax during the Assessment Proceedings ) in the case of Your Appellant which were submitted before him during the course of Appellate Proceedings Quote a) That there was no negative cash balance during the financial year 2007-08 b) During the financial year 2007-08, there was cash sales of Fabrics amounting .....

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..... balance on any day. l) Unfortunately, the submissions made by Your Appellant were not considered in the right prospective and the Dy. Commissioner of income Tax proceeded with his own calculations based on conjecture and surmise. m) When Your Honor goes through Para 5.3 of the Assessment Order, Your Honor would observe that as per the Dy. Commissioner of Income Tax the peak negative balance was ₹ 49,71,209/- but still he proceeded to make an addition of ₹ 56,19,155/-. Unquote 4) The learned Commissioner of Income Tax Appeal erred in disallowing a sum of ₹ 2,52,500/- being ROC Charges incurred for increasing the authorized capital. 3. We would like to deal with the ground No.2 as raised by the assessee on merit against the confirmation of addition of ₹ 56,19,155/- by Ld. CIT(A) as made by the AO on account of unexplained cash credit being peak negative cash balance found during the course of survey. 4. The facts in brief are that the assessee filed the return of income on 29.09.2008 declaring income of ₹ 1,96,33,826/- which was processed under section 143(1) of the Act accepting the income returned. A survey was conducted under se .....

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..... 6,19,155/- of negative cash balances which was added to the income of the assessee on account of negative cash balances which remained undisclosed by framing assessment under section 143(3) read with section 147 of the Act. However no defects were pointed out in the books of accounts produced before the AO which were also not rejected. 5. The Ld. CIT(A) dismissed the appeal of the assessee after considering the explanation/reply of the assessee by observing that the separate bill book in which cash sales amounting to ₹ 69,29,954/- was recorded for F.Y. 2007-08 was not brought to the notice of the AO either at the time of survey or immediately after the survey and also that no documentary evidences were furnished before the first appellate authority. According to the Ld. CIT(A) the indigenous sales of ₹ 1,20,84,704/- comprising local sales of ₹ 51,54,750/- and sale of fabrics in cash ₹ 69,29,954/- were not doubted by the AO whereas the total sales including export were ₹ 32,56,64,199/-. According to the Ld. CIT(A) the entire cash sales was accounted for on the last day of the accounting year and he came to the conclusion that there was negative cash .....

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..... ained cash in the books of accounts of the assessee the same should be deleted. Alternatively the issue may be restored to the file of the AO to re-examine the facts and decide the same accordingly. 7. The Ld. D.R., on the other hand, relied heavily on the orders of AO and Ld. CIT(A) and submitted that at the time of survey the material gathered and seized showed that assessee has negative cash balance though the Ld. D.R. candidly admitted that cash sales of ₹ 69,29,954/- was made through a separate bill book which was not considered on the various dates on which the cash sale was made. The Ld. D.R. further submitted that the AO has clearly brought out the negative balance of the cash monthwise and therefore submitted that the order of Ld. CIT(A) should be affirmed as the negative cash balance was not explained. On the issue of non rejection of books of account by the AO the ld DR submitted that these discrepancies were noticed in the documents seized at the time of survey. 8. We have heard the rival submissions of both the parties and perused the material on record including the impugned order. The undisputed facts are that the books of accounts of the assessee were au .....

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..... it Closing Balance Opening Balance 82230.60 D April 3260368.15 3338195.00 4403.75 D May 1985508.00 425507.00 1564404.75 D June 1016848.00 2002279.00 578973.75 D July 4481200.00 1031427.00 4028746.75 D August 3754003.00 5549986.00 2232763.75 D September 3291051.00 4868492.00 655322.75 D October 1303745.00 630902.50 1328165.25 D November 258264.00 219777.00 1366652.25 D December 595370.00 230783.00 1731239.25 D January 1416976.00 343629.00 .....

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