TMI Blog2022 (4) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... n raised by the assessee, however, the same relate to the order of the Ld. CIT(A) in upholding the addition of ₹ 39,60,000/- made by the A.O. under section 68 of the I.T. Act, 1961. 3. Facts of the case, in brief, are that the assessee is an individual engaged in the business of trading of footwear. He filed his return of income on 30.11.2017 declaring income of ₹ 6,36,270/-. The case of the assessee was selected for scrutiny for abnormal increase in cash deposit during the demonetization period as compared to pre-demonetization period. Accordingly, statutory notices under section 143(2) and 142(1) of the I.T. Act, 1961 along with centric/specific questionnaire/query was issued by the A.O. The assessee in response to the same filed details as called for from time to time. 3.1. During the course of assessment proceedings, the A.O. noted that the assessee is involved in the business of manufacturing and wholesale dealing of footwear in the name and style of M/s. A.N. International. From the perusal of the bank account filed by the assessee, he noted that there was regular cash deposit into the bank account. On being questioned by the A.O. to explain the source of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny cash book showing the day-to-day receipt of cash as well as cash expenditure to substantiate the cash-in-hand as on 07.11.2016. Mere filing of details of cash deposit in bank and list of debtors from whom cash had been received do not prove the availability of cash-in-hand as on 07.11.2016. c) Cash transactions in Bank Statement of ICICI Bank and the summary of cash deposited does not match. For example, the ICICI Bank statement shows cash deposited on 23.05.2016 14.09.2016 whereas in the summary of cash deposit in ICICI during FY 2016-17 does not show this deposit. Further, the month-wise cash deposit in ICICI bank in earlier year as well as subsequent year does not show cash deposit in such magnitude. d) The appellant has not furnished any authentic documents to explain it s source of cash deposit such as (i) identity confirmations from debtors, (ii) cash book of current as well as last year subsequent year to justify that such huge cash-in-hand is the feature of its cash book always, (iii) profit loss accounts to justify its turnover in cash last year, current year and subsequent year, (iv) Balance Sheet to show the magnitude of sundry debtor as well as sund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . g) Total deposit transaction during FY 2015-16 and 2016-17 is more than the tax audit limit but the appellant did not furnished any auditable financial statement to substantiate the declaration of nature of transactions and the outstanding opening debtors opening creditors in financial statement. h) Most of cash deposited during demonetisation period was utilized to transfer the money to SMFOOTWARE but the appellant did not furnished the nature of such payment with documentary evidence. Keeping in view the above facts, the circumstantial evidences do not support the contention of the appellant. The Hon ble Supreme Court has held in several cases such as Sumati Dayal [1995] 214 ITR 801(SC) that while deciding any issue surrounding circumstance/evidence and test of human probabilities should also be looked into. In the instant case, it is an undisputed fact that the appellant has made huge cash deposits during the demonetization period, which is found not a regular feature in earlier period as well as subsequent period in the instant case. Also, the appellant fails to substantiate its claim that these money were received from debtors without furnishing the day-to-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as under: 5.1. He submitted that the A.O. has not given any reasonable and justifiable basis for disputing the cash deposits made and arising out of sale proceeds and treated the cash deposits made during the demonization period as unexplained without any valid logic and without taking into consideration demonetization notification. 5.2. So far as the allegation of the A.O. that assessee has not submitted any documents/details to establish the source of cash deposits made in the bank account is concerned, he submitted that the assessee has duly submitted the complete details of debtors along with PAN Addresses along with few confirmations and, therefore, it is not known to the assessee as to why the A.O. has made this addition without appreciating the documents already on record. Learned Counsel for the Assessee referring to pages 49-50 of the PB drew the attention of the Bench to the chart showing the name, address and PAN of sundry debtors from whom cash payments were received during the A.Y. 2017- 18. Referring to page nos.51-117 of the paper book, the Learned Counsel for the Assessee drew the attention of the Bench to the copies of the Ledger accounts and confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NFAC and, therefore, the same is not in accordance with law. It is also his submission that when the assessee has opted for presumptive tax under section 44AD and the total sales as declared by the assessee at ₹ 90,66,440/- is much more than the cash deposits made in the bank account and when the assessee has realised an amount of ₹ 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 ₹ 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. sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has already offered the sales for taxation hence the onus has been discharged by it and the same income cannot be taxed again. 7.4. I find the Coordinate Bench of the Tribunal in the case of M/s. Singhal Exim P. Ltd., vs., ITO (supra) while deleting the addition made under section 68 of the I.T. Act, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be attracted where there is a credit found in the books of accounts and the assessee failed to offer any explanation or the offer made by the assessee is not satisfactory in the opinion of the assessing officer. The assessee has explained to the authorities below that the impugned amount represents the sale which 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 convin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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