TMI Blog2022 (9) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 parties were selected by the AO for verifying the genuineness of the transaction. Three parties directly appeared before the ld. AO and filed the replies. Eight parties furnished the replies to the assessee and those replies were also submitted by the assessee before the ld. AO. These facts were not controverted by the Revenue before us by bringing any contrary evidences. AO had not brought any cogent evidence on record to disbelieve the details furnished by the parties and the assessee. The banks had fixed the maximum limit of making deposit in cash up to Rs.5,00,000/- in a day during the demonetization period commencing from 09/11/2016 to 31/12/2016. This had mandated the assessee to make frequent cash deposits less than Rs.5,00,000/- during the period 09/11/2016 to 31/12/2016. Accordingly, we hold that the entire cash deposits made by the assessee during the period 09/11/2016 to 31/12/2016 in Specified Bank Notes stood properly explained by the availability of cash balance in its books and hence, no addition thereon could be made u/s.68. Disallowance of depreciation of immovable property - HELD THAT:- As it could be seen that the sale deed has been registered in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as ld. AO). 2. At the outset, we find that there is a delay in filing of appeal by 85 days by assessee before us. We find that the order is passed by the ld. CIT(A) during the Covid Pandemic period and accordingly, in view of the relaxation granted by the Hon ble Supreme Court, we are inclined to condone the delay of 85 days in filing of appeal by the assessee. Accordingly, the appeal of the assessee is admitted for adjudication. 3. The ground No. 1 5 raised by the assessee are general in nature and does not require any specific adjudication. 4. The ground No. 2 raised by the assessee is challenging the action of the ld. CIT(A) in confirming the addition made in the sum of Rs.2,48,87,000/- being Specified Bank Notes deposited in the bank account of the assessee, in the facts and circumstance of the case. 4.1. We have heard rival submissions and perused the materials available on record. We find that the assessee is engaged in the business of freight forwarding for handling perishable, general and time sensitive cargo and handling general and other kinds of cargo. The ld. AO observed that the assessee had credited to the profit and loss account re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of total cash receipts from customers. The assessee also submitted that it is a clearing and forwarding agent having 13 branches situated at Delhi, Bangalore, Kochi, Calicut, Hyderabad, Ahmedabad, Lucknow, Kolkata, Trivendrum, Mumbai, Mangalore, Goa and Chennai. It was specifically pointed out that assessee assists in sending perishable and time sensitive cargo through air transport. It receives various components for this purpose from its customers such as freight, customs duty, loading and unloading charges, Barai charges etc., which are incidental to the transportation of the cargo apart from earning agency commission from its customers. It was also submitted that freight paid to airlines has a credit period of one month, accordingly, the assessee accords credit of one month in relation to the said charges to its clients. However, assessee receives cash from some of its clients for meeting daily charges for handling their cargo which included loading and unloading, Barai and other ancillary expenses connected to transportation of cargo. It was also pointed out that the cash received for this purpose is expended for incurring the aforesaid expenses, however, consequent to demone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger confirmation of the customers of having made the payment to the assessee in cash; (f) Cash deposits made prior to 08/11/2016. 4.4. The ld. AR before us submitted the business model adopted by the assessee regarding the process of handling shipment and reasons for cash withdrawal as under:- i. First, the assessee book space with Airlines before 24 hours for subject destination with description of Commodity. ii. Then negotiate Rate from different Airlines based on buy rate, assessee take confirmation for sell rate from Customer. iii. After final confirmation is received from Exporter for execution of shipment, assessee block space with respective Airline base on Export invoice copy packing List. iv. Once customer shipment has been approved, assessee have to do AD code registration of Exporter with Approval of custom officer. v. The assessee have to arrange Transportation service from exporter warehouse to cargo terminal, where assessee have to pay cash to Truck Driver for Diesel Expenses trip Expenses of the Driver. vi. To transport cargo from customer warehouse, assessee have to pay Mathadi workers (Hamal or Loader) to load cargo in vehicle. Mathadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h cash requirement would have to be met for meeting day to day expenditure. We find from the perusal of the bank statements for the whole year and the cash book for the whole year which is already forming part of records, the assessee has regularly withdrawn cash from its bank account throughout the year and has been making deposits in bank throughout the year in the bank account. Since remaining balance of the amounts withdrawn from bank after meeting its business expenses that were lying with the assessee had lost its validity of being classified as a legal tender pursuant to announcement of demonetisation policy by the Government of India, the assessee had no choice but to deposit the cash available with it both in the form of cash surplus withdrawals and also the cash received from customers in the designated bank account in Specified Bank Notes during the period 09/11/2016 to 31/12/2016. All cash that has been deposited in Specified Bank Notes during the demonetisation period i.e.09/11/2016 to 31/12/2016 cannot be classified as unexplained income of the assessee. What is to be seen is as to whether the assessee had sufficient cash balance in its books for making the said depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions and perused the materials available on record. The ld. AO from the perusal of the return of the assessee together with the financial statements observed that there was an addition to the block of building amounting to Rs.5,67,30,000/- during the year under consideration. The assessee vide submission dated 27/11/2019 filed a copy of agreement in respect of purchase of the said property situated at 702, Pramukh Plaza. This agreement was entered for purchase of property on 31/03/2017. The ld.AO vide notice u/s.142(1) of the Act dated 07/12/2019 asked the assessee to explain why depreciation amounting to Rs.28,36,500/- on the said immovable property should not be disallowed as only agreement for purchase of property was entered into and only part payment was made during the year. In response to the said notice, the assessee explained that it had entered into an agreement for purchase of property as on 31/03/2017 and the property was registered in the name of the company on 06/04/2017 i.e. within six days from the agreement date. The assessee already had a physical possession of the property as the same property was taken on rent by it immediately prior to the date of purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced herein below:- Section 23 in The Registration Act, 1908 23. Time for presenting documents.-Subject to the provisions contained in sections 24, 25 and 26, no document other than a will shall be accepted for registration unless presented for that purpose to the proper officer within four months from the date of its execution: Provided that a copy a of a decree or order may be presented within four months from the day on which the decree or order was made, or, where it is appealable, within four months from the day on which it becomes final. Section 47 in The Registration Act, 1908 47. Time from which registered document operates.-A registered document shall operate from the time which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. 5.3. From the perusal of the aforesaid provisions it could be seen that the sale deed has been registered in the name of the assessee before six months from the date of execution of the agreement, hence, effectively the ownership relates back to the date of agreement to the assessee. It is not in dispute that assessee was enjoying the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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