TMI Blog2023 (5) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... njoy Sarma, Judicial Member] For the Assessee : Shri Siddarth Agarwal, Advocate For the Revenue : Shri Vijay Kumar, Addl. CIT ORDER PER SONJOY SARMA, JM: This is an appeal filed by the revenue against the order of ld. CIT(A)-15, Kolkata dated 23.09.2020 for the A.Y. 2017-18. The revenue has raised the following grounds of appeal: i. Whether Learned Commissioner of Income Tax (Appeals)-15, Kolkata was justified in deleting the entire addition made by the Assessing Officer amounting to Rs. 1,65,17,000/- on account of cash deposit made by the assessee during the demonetization period i.e. from 09.11.2016 to 30.12.2016 being treated as unexplained money u/s 69A of the Income Tax Act, 1961. ii. That the department craves leave to add modify or alter the above ground of appeal and/or adduce additional evidence at the time of hearing of the case. 2. Brief facts of the case are that the assessee is an individual and filed its return of income for the A.Y. 2017-18 on 31.10.2018 by declaring total income of Rs. 10,48,160/-. The case of the assessee was selected for complete scrutiny and notices u/s 143(2) and 142(1) was issued for the purpose of verif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as Annexure: H, I and J. Therefore, the allegation of the A.0. that no books of accounts were submitted, does not stand. 5.4.2 The A.0. has not pointed out any defect in the books and/ or details. He accepted the purchases but the cash received against sale which had been Subsequently deposited was not accepted on irrelevant considerations. The appellant has rebutted the adverse comments raised by the A.O. in the assessment order. As regards non service / non compliance from the sundry debtors, it is observed on perusal of the debtors' ledger uploaded on portal that all the debtors were trade debtors and the entire cash receipts were against the sales made to them in the relevant year. Needless to say, sales have formed part of the credit side of the trading account on which tax has been paid. The appellant has placed reliance upon various decisions for the proposition that no adverse inference can be drawn in case of unverifiable sales if proper books are maintained. I find the decisions referred to in the submissions viz., Kanpur Steel Co. Ltd. vs. Commissioner of Income-tax (1957] 32 ITR 56 (ALL.), CIT v Kailash Jewellery House, ITA No. 613/2010 (Delhi High Court) de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and surmises and acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, or the finding was. in other words, perverse and this court is entitled to interfere. In Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax 26 ITR 775, Hon'ble Supreme Court has held that there must be something more than bare suspicion to support the assessment under section 143(3). 5.4.6 It is observed that there are various decisions rendered by the courts and ITAT, which have examined the issue from the perspective of applicability of sec 68 to sales offered to tax in the regular books of accounts. The findings of such cases are reproduced hereunder a) New Pooja Jewellers v. ITO (Kolkata ITAT) ITA No. 1329/Ko/2018 Be it as it may, in the normal course, we would have restored the issue to the file of the A0 for fresh verification of the claim of the assessee that it had received advances from customers on the occasion of Ramnavami Nayakhata. In other words, we would have given the AO more time to conduct enq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee, or where the method of accounting provided in sub-section(1) or accounting standards as notified under sub-section (2), have not been regularly followed by the assessee. In the instant case, it is seen that the A.0. has alleged that books of accounts were not produced but the appellant has demonstrated that books were uploaded in the portal from time to time. Further, it is seen that from the tax audit report that complete set of books is maintained by the appellant and the same are audited by the Chartered Accountant. It is observed that all the details as asked by the A.O were uploaded on portal from time to time by the appellant and the A.0. has nowhere pointed out that the accounts produced/uploaded were not correct or complete or that the method of accounting or accounting standards as notified have not been regularly followed. Further, by passing the assessment order under section 143(3), there is tacit admission on the part of the AO that the books were properly maintained In view of the above, I hold that the rejection of books by the A.O is not sustainable law. 5.4.7 Further I find that the A O invoked the provisions of section 69A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that the addition of Rs. 6,30, 000/- made under section 694 of the Act is bad in law in the facts and circumstances of the case on hand and therefore delete the addition of Rs.6,30, 000/- made thereunder. The AO is accordingly directed. 5. Aggrieved by the above order passed by the ld. CIT(A), the department is in appeal before the Tribunal by raising the exclusive ground in respect of deposit of cash made during the period of demonetization amounting to Rs. 1,65,17,000/- by treating it as unexplained money u/s 69A of the Act. 6. At the time of hearing before us, ld. DR argued the matter and contended that the claim of the assessee arising out of sales made during the period of demonetization could not able to substantiate before the AO at the time of hearing and assessee even did not produce the necessary supported document in reference to such sale before the AO, therefore, the ld. AO correctly treated the cash deposit during the period of demonetization as unexplained transaction u/s 69A of the Act. 7. On the other hand, ld. AR submitted that the order passed by the ld. CIT(A) is a reasoned order and the assessee has produced necessary books of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gives credibility to such an estimation. All these assumptions and calculations carry AO s own figment of imagination. We note that the assessee has countered all the assertions and assumptions made by the AO by submitting the details from its audited books of accounts and stock registers by providing all the relevant details from time to time. We note that the assessee had given all the explanations which are reasonable and there is no other material except for the estimation of probable sales value done by the Ld. AO for the purpose of treating the deemed income as unexplained money in the hands of the assessee. We also note that assessee has duly recorded in its books of accounts all the sales made on the date of announcement of demonetization in the time window available on that day which has been credited in the P L Account. It is also noted that the assessee had stock in hand to meet the sales demand, all of which is duly recorded in the stock register furnished before the authorities below. It is also noted that there is no specific discrepancy pointed out in respect of the books of account, more particularly when the purchases have not been doubted in the assessment. Ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, or the finding was, in other words, perverse and this court is entitled to interfere. 7.3 Ld. Counsel pointed out that assessee had all the capabilities, infrastructure, manpower, process and procedures to handle and deal with high volume of customers during small time window available to it. For comparability of the circumstances which existed on the day of demonetization announcement, he pointed to the occasion of Dhanteras which is a festival wherein similar kind of high traffic volume of customers happens for the purchase and sale of gold/bullion/jewellery, it being an auspicious day for making such investments. It was placed on record that on the day of Dhanteras which fell on 28.10.2016 i.e. prior to the day of announcement of demonetization, sales bills to the tune of 229 numbers were generated while dealing with those many customers which was also during the smaller time window available on that day depending on the muhurats. It was also pointed out that the VAT returns filed by the assessee for the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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