TMI Blog2023 (6) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 5,65,88,512/- made by the AO on account of unexplained transaction without considering the fact the creditworthiness of alleged creditors were not established and genuineness of the transaction. 2. That on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs. 25,84,23,427/-made by the AO u/s 68 of the Income Tax Act on account of unexplained cash credits, the eleven copies of confirmation from creditors submitted by assessee reveals that the signatures by Authorised Signatory for the assessee were all signed on the same date i.e. 01.04.2011 but none of these signatures matches another. These documents lack authenticity and credibility and are not genuine but bogus documents. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,25,00,000/- on account of cash deposits when the genuineness of cash sales as well as its correlation with cash deposits into banks was not established especially no names PAN nos and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p including the assessee company. The AO also observed that the firm deposited various amounts in its bank account through RTGS or through banking transactions and almost identical amounts were immediately transferred to different entities and most of the transactions were either in credit side or in debit side revealed that the transactions are made with the firms associated/sister concerns namely M/s Jinni Gold Ltd., M/s Gold Exim Pvt. Ltd., M/s Shri Raj Mahal Jewellery, M/s Goyal Impex Pvt. Ltd. and the assessee company. 3. The Assessing Officer in order to collect further information a letter was written to assessee company on 22.03.2018 to furnish the details with respect to the transactions made with M/s Radha Jewellery House. However, there was no reply received from the assessee and the sources of transaction made with M/s Radha Jewellery House remained unverifiable and unexplained. 4. On examination of the information received from DCIT (Inv.) and on perusal of the information on the ITBA/ITD System, the details available on the MCA website portal and as per the enquiries conducted in the case of the assessee the Assessing Officer believed that income of Rs. 5,65,88, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income was filed by the assessee for the immediately preceding assessment year. The Assessing Officer noticed that the trade liabilities shown in the balance sheet are created only during the year under consideration. He also noticed that the assessee company was incorporated on 27.04.2010 and in order to verify the trade liabilities noticed u/s 142(1) of the Act along with detailed questionnaire was issued to the assessee and served through mail and speed post and has given the date for compliance on 20.11.2018. The assessee neither furnished any details nor any explanation in response to the said notice. Therefore, the AO came to the conclusion that since the onus on the assessee company to prove the identity and credit worthiness of the parties and the genuineness of the transactions which the assessee failed to discharge the said trade liabilities created in the balance sheet to the tune of Rs. 25,84,23,427/- has been treated as unexplained. Accordingly, the same was added u/s 68 of the Act. 8. The Assessing Officer further as per the information available on the record in ITBA, noticed that in the year under consideration assessee has deposited total cash amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the ground no. 3 is concerned the Ld. AR submits that all sales are less than Rs. 5,00,000/- made in cash and, therefore, there is no requirement of maintaining PAN and addresses of the purchasers. The Ld. Counsel for the assessee further submits that on an application by the assessee u/s 46A and the additional evidences furnished before the Ld.CIT(A), remand report was called for and after considering the remand report and the rejoinder submitted by the assessee and after examining the evidences furnished by the assessee, the Ld.CIT(A) has rightly deleted the additions. The Ld. Counsel strongly supported the order of the Ld.CIT(Appeals) and reiterated the submissions made before the Ld.CIT(Appeals). 11. Heard rival submissions, perused the orders of the authorities below. We observe that the AO completed the assessment u/s 143(3) r.w.s. 147 of the Act making the following additions for the reason that the assessee did not respond to the notices issued nor any explanations or evidences were furnished: 1. unexplained expenditure Rs. 5,65,88,512/- 2. unexplained cash credit Rs. 25,84,23,427/- 3. unexplained cash deposits Rs. 1,25,00,000/- 12. Before the Ld.CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,466/- during the F.Y. 2012- 13 respectively from the various entities including the appellant. The appellant by filing the documents proved that M/s Radha jewellery House was dealing in gold and diamond jewellery and the transactions of the jewellery was not only made with the appellant but also with other entities. The appellant has also filed the documents related to VAT/ sales tax and also copy of ITR of M/s Radha Jewellery House to prove the fact that M/s Radha Jewellery House was dealing with jewellery and the transactions the appellant had with it was genuine. 5.4. The appellant has also filed copy of ledger account, bank statement, copies of invoices in respect of sale/ purchases made and copy of stock register of M/s Radha jewellery House. It was also submitted that M/s Radha jewellery House is one of the group concerns of the appellant. It was further submitted that M/s Radha Jewellery House has shown its income for the year under consideration of Rs. 14,26,630/- and for the AYs 2010-11 and 2012-13 of Rs. 3,69,939/- and Rs. 14,64,774/- respectively. The entire payment with reference to sale made by the appellant to M/s Radha Jewellery House was received by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the facts as discussed above, I find that there were trade liabilities shown by the appellant in the balance sheet as on 31.03.2011 but all the payments were made to the parties concerned in the immediate succeeding year, therefore, there was no cessation of any liability, under these circumstances, the AO was not justified to make addition u/s 68 of the IT Act, hence, the same is directed to be deleted. 15. The Ld.CIT(A) while deleting the addition of Rs. 1,25,00,000/- made on account of unexplained cash deposits held as under: 7.3 On perusal of the rejoinder (supra) of the appellant and the facts of the case as discussed above, I find that there was sale in cash made by the appellant during the year as well as in the subsequent assessment year which is verifiable from the copies of cash book filed by the appellant in this regard. The cash was available with the appellant to deposit the same into the bank account. The source of the cash available with the appellant as explained by it is reproduced as under:- a) Opening balance of cash in hand as on 01.03.2011 was Rs. 1,76,508/-. b) The assessee had made cash sales amounting to Rs. 13,23,675/- as on 03.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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