TMI Blog2023 (3) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar , Sr - DR ORDER PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as NFAC/Ld.CIT(A) ] dated 15.03.2022 for assessment year 2017-18, which in turn arises from the addition made by the Income Tax Officer, Ward-1(2)(4), Surat / Assessing Officer in assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 27.12.2019. The assessee has raised the following grounds of appeal:- 1) The learned Commissioner of Income Tax (Appeals) NFAC has erred in law and on facts in confirming ads made by Ld. AO as per order passed u/s 143(3) of the Act. i. Addition u/s 68 r.w.s. 115BBE of the Act amounting to Rs.13,65,241 as unreconciled cash deposited in Bank accounted as cash sales during demonetization period. ii. Addition u/s 68 of the Act amounting to Rs.10,00,000 received from debtors as unaccounted cash deposited in bank during demonetization period. 2) The learned Commissioner of Income-Tax(Appeals), NFAC has erred in law and on facts by not taking into consideration and giving judgment on ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed would be filed within five days. The Assessing Officer on further perusal of return, noted that assessee has deposited cash of Rs.3.73 crores during monetization period in their bank account of Surat Peoples Co-operative Bank Ltd. The Assessing Officer issued show cause notice on various points to assessee. 3. The contents of said show cause notice are recorded in para-3.2 of assessment order. For appreciation of fact, the contents of such show cause notice is reproduced below: (i) During the course of survey conducted at the business premises cash-in-hand was found at Rs.4,38,620/- whereas as per books of account there was a negative balance in cash book as on 21.03.2017 of Rs.18,35,55,117/-. You have assured during the statement u/s 131 that the reconciliation will be submitted to the department within 5 days. The same is still pending. Please provide the reconciliation and the reasons for appearing cash short of Rs.18,35,55,117/-. (ii) During the course of survey proceedings it was stated that cash deposited during the demonetization period was Rs.3,73,46,565/- whereas the position emerged from the Annexure at page no. 147 shows total deposits was of Rs.56,45,08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the book of Swastik Transport Service Udhna no such payment was appearing. As per the information furnished, in response to notice under section 133(6). Further as per ledger account of Swastik Transport Service Udhna, they have paid Rs. 16,000/- on nineteen times i.e., total of Rs.3.04 lakhs from 01.12.2016 to 20.12.2016, which were not reflected in the books of assessee. 6. The Assessing Officer further recorded that on perusal of ledger account of Swastik Logistics Udhana, he noted that assessee claimed to have received Rs.56,571/- on 11.11.2016 in cash from Swastik Logistics Udhna. However, in the book of Swastik Logistics Udhna, such figure is not reflected on 11.11.2016. The Swastik Logistics Udhana has shown in its books of account, the payment of Rs. 19,500/- in cash on 15.11.2016, Rs. 18,000/- on 25.11.2016 and Rs.19,071/- on 28.11.016 respectively. On comparing both the ledgers there are many more inconsistencies i.e., assessee claimed to have received Rs.18,000/- cash on 1st, 2nd, 3rd, 4th, 5th 6th December, 2016, whereas no such cash payments were made by Swastik Logistics Udhana as per copy of ledger accounts produced under section 133(6) of the Act. 7. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10.00 lakh allegedly received from Swastik Transport Udhna and Swastik Logistics Udhna was introduced as unaccounted income in the assessees books of account. Further, aggrieved the assessee filed present appeal before the Tribunal. 10. I have heard the submission of Ld. Authorized Representative (Ld.AR) for the assessee and learned Senior Departmental Representative (ld. Sr DR) for the Revenue. The Ld. AR for the assessee submits that assessee is a dealer of IOC and selling petrol and diesel and other petroleum and chemical products whereas 75% to 80% of sales of assessee made in cash. On 08th November 2016, SBN of Rs.500/- and Rs.1000/- denomination was ban by Government of India. However, it is known fact that petrol pumps, hospital and medical stores were allowed to accept SBN of Rs.500/- and Rs. 1,000/- notes respectively. Due to allowing such SBN, there was jump cash sales of assessee particularly in SBN. As there was survey under section 133A on 21.03.2017 in assessees premises, therefore, the return of assessee was selected for scrutiny. During scrutiny assessment, assessee filed its reply from time-totime. The assessing officer also issued show cause notice about cash- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank, Udhna dated. 12.04.2016 is filed at page-40 of paper book No.2. The Ld. AR for the assessee submits that similar discrepancy that the assessee could very well be explained. However, no opportunity to explain such discrepancy was given to assessee. 13. To support his submissions, the Ld. AR for the assessee relied on the following case laws; ITO Vs Mohammedarif Ibrahim Bhai Shaikh (ITA No.115/AHD/2019) dated 31.05.2022, Maruti Suzuki India Limited Vs Additional Commissioner of Income Tax in Writ Petition No.6876 of 2008, 14. The ld AR for the assessee submits that in both the cases it was held that addition made without giving any show cause notice vitiate the principal of naturel justice and such addition are unjustified and un-called for. 15. In other alternative submission, Ld. AR for the assessee submits that sales of assessee was not disputed by the Assessing Officer though the books of assessee was not rejected. Therefore, without disputing the sales, the addition made by Assessing Officer under section 68 is not justified. The Ld. AR for the assessee further submits that petroleum products are essential commodity and its quantity is measured at diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. I have also deliberated on the case law cited by Ld. AR for the assessee. There is no disputes that as per Reserve Bank of India (RBI) guidelines, the assessee was allowed to accept the SBN of Rs. 500/- and Rs. 1000/-. It is also in the common knowledge that cash sales of entities, which were allowed to accept SBNs were increased for certain period. The case of assessee throughout the proceedings are that major part of his business is in cash sales. Such fact is not otherwise in disputes that majority of transactions of petrol pumps are in cash. I find that during the assessment, the assessing officer in order to verify the receipt of cash from sundry creditors, issued notice to both the sundry creditors and obtained the copy of ledger accounts of the assessee. The assessing officer compared the ledger accounts of the assessee in the books of sundry creditors and find certain discrepancy and added Rs. 10.00 lakhs. The assessing officer nowhere recorded that the information and the evidences obtained by him from sundry creditors were shares with the assessee or any show c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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