9911796707
TMI Blog2023 (3) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... sist the assessee to furnish the details in support of the source for cash deposits to allow the assessee's claim. 2.4 The CIT(A) failed to consider the fact that the assessee had furnished only the reconciliation statement that too confirms only the closing balance of trade receivables as per the books of accounts and the balance sheet of the assesses. 2.5 The CIT(A) ought to have appreciated the fact that the addition was made u/s.68 towards cash deposits for non-furnishing of evidence for the source for the same, whereas the assessee has tried to substantiate the above said claim only through reconciliation statement which is not acceptable. 2.6 The CIT(A) ought to have appreciated the fact that the addition was made by the AO after considering the very same reconciliation statement furnished during the course of assessment proceedings, which was not considered as a proof for assessee's claim of source for the cash deposits. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the Order of the learned Commissioner of Income Tax (Appeals) be set aside and that of the Assessing Officer be restored. 3. The brief facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2013, then, there is a receipt of Rs.14,71,51,480/- which includes a sum of Rs.5,14,32,192/- cash receipts from various parties. The assessee further submitted that the assessee had also filed confirmation from various parties, including M/s.Sri Baba Trading Co., to prove that advance has been received for supply of materials. The AO without appreciating facts, simply made additions towards cash deposits u/s.68 of the Act. The Ld.CIT(A) after considering relevant submissions of the assessee and also taken note of reconciliation filed by the assessee to explain the position of trade receivables as on 01.04.2012 & as on 31.03.2013 opined that the assessee has filed all evidences to prove cash receipts from various parties, including M/s.Sri Baba Trading Co. The Ld.CIT(A) further observed that the assessee has received a sum of Rs.5,14,32,192/- from various parties in cash has also received a sum of Rs.2.20 Crs. from M/s.Sri Baba Trading Co. Therefore, the Ld.CIT(A) opined that there is no basis for the AO to consider cash deposits u/s.68 of the Act, as unexplained cash credit and thus, direct the AO to delete addition made towards cash deposits u/s.68 of the Act. The relevant findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with cash book and trade receivables, individual ledger accounts and sales accounts of all the parties. He has further stated that appellant has failed to substantiate their claim, hence, he proceeded to consider cash deposits amounting to Rs.7,26,80,135/- as unexplained cash credit. For this purpose, he has given following working: Opening Balance of Trade Receivables 10,07,97,897 Addition: Sales during the year 9,77,30,840 Total 19,85,28,737 Less: Receivables received as stated by representative 5,14,32,192 Balance 14,70,96,545 Less: Cash receipts as stated by representative 2,20,00,000 Closing balance of Trade Receivables 12,50,96,454 AO has further stated that appellant has shown trade receivables as on 31.03.2014 at Rs.4,93,65,705/-. As per the AO, the closing balance of trade receivables as on 31.03.2014 should be at Rs.12,50,96,454/- but appellant has accounted for only Rs.4,93,65,705/-. Thus, he has held that there is a huge difference of Rs.7,57,30,749/- which indicates appellant's books of accounts have not been maintained properly and not reliable. In the circumstances, AO has considered entire cash deposits of Rs.7,26,80,135/- u/s.68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o his own admission of producing sales ledger and trade receivables account. Therefore, in my considered opinion, there is no basis to considered cash deposits u/s.68 as appellant has substantiated the source of cash deposits made in the bank account. In my considered opinion, appellant has explained entire cash deposits found in the bank account by way of producing evidences before the AO. in the circumstances, AO is directed to delete the addition made u/s.68. The grounds taken by the appellant are allowed. 4.6. During the appellate proceedings, Ld.AR has filed reconciliation statement with regard to trade receivables which is given as under: Particulars Rs. Rs. Opening Balance of Debtors as per Balance sheet 01.04.2012 - 10,07,97,897 Sales as per Profit & Loss A/c 2013 - 9,77,30,840 Total 19,85,28,737 Less: Collection - Cheques and Cash (A) Cash from Debtors as per Assessment order 5,14,32,192 - (B) Advance taken from Baba Trading Company as per order and Cash receipts statement 2,20,00,000 - (C) Cheque from 3 Debtors as per order not taken by AO 4,73,31,108 - Collections from Debtors (Working =Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding M/s.Sri Baba Trading Co. The assessee had also explained how the AO fundamentally went wrong in arriving at closing balance of trade receivables and as per which, the AO had considered only opening balance of trade receivables as on 01.04.2012 and closing balance of trade receivables as on 31.03.2013 by taking figures from the balance sheet without going into the individual ledger account copies in respect of parties which resulted in arriving at wrong conclusion that there is a difference between trade receivables. But, fact remains that while arriving at closing balance of trade receivables, the AO had omitted to consider sales made for FY 2013-14. The assessee has reconciled the figures and explained before the Ld.CIT(A). The Ld.CIT(A) after considering relevant facts has rightly deleted additions made by the AO and their orders should be upheld. 7. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The sole basis for the AO to make additions towards cash deposits to bank account maintained with M/s.KVB u/s.68 of the Act, is self-reconciliation made by the AO towards trade receivables appeared in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt of Rs.5,14,32,192/- from trade receivables. 9. As regards advance received from M/s.Sri Baba Trading Co., the AO is not in dispute with regard to the fact that the assessee has filed confirmation from the parties to substantiate its claim. In fact, the AO never disputed the fact that the assessee has filed ledger extract along with confirmation to prove claim of advance received from M/s.Sri Baba Trading Co. However, the AO has rejected the explanation of the assessee only on the ground that cash received on various dates, is not matching with cash deposits into bank account. In our considered view, the AO failed to understand the issue because, it is not necessary to match dates of cash receipts from party to date of cash deposit into bank account when the assessee has furnished cash books to explain the receipt of the cash from various parties and deposit of cash to bank account. In this case, the AO misunderstood the issue without considering cash book maintained by the assessee and come to the conclusion that cash received from M/s.Sri Baba Trading Co., cannot be source for cash deposits found in bank account maintained with M/s.KVB. Therefore, we are of the considered vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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