TMI Blog2023 (9) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the assessee is ruled out then we do not find any reason for not admitting the additional evidence produced by the assessee. As noted from the monthly details of purchase made by the assessee as well as the payments as reflected in the bank account statement of the assessee that the quantity of the purchase and corresponding payments are duly matched without any discrepancy whereas in the ledger account maintained by the IOCL the factual mistakes are apparent regarding the quantity of purchases as shown only 6 kl instead of 12 kl and in some cases it is shown only 3 kl or 9kl. Therefore, these quantities as shown in the IOCL statement are not even matching with the value shown in the same documents. Comparative chart as reproduced by the CIT(A) clearly manifest these factual mistake in the IOCL statement regarding the quantity of purchase and hence, the assessment order is entirely based on incorrect facts without verifying the correct details and the facts from the supporting documents being the invoices issued by the IOCL and corresponding purchase consideration paid by the assessee. Accordingly in the facts and circumstances of the case as discussed above we do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing stock of various months in comparison to details shown in the ledger account of the assessee with IOCL. Accordingly the AO made addition of the entire cash deposit in bank accounts of Rs. 1,37,25,500/- as unexplained cash credit u/s 68 of the Act. On appeal the assessee explained that there are factual mistakes in the ledger account maintained by the IOCL regarding purchase made by the assessee during the year and particularly for the disputed period. The Ld. CIT(A) called for a remand report and after considering the remand report has deleted the addition made by the AO. 3. Before the Tribunal the Ld. DR has submitted that the assessing officer has given the details of large cash deposited by the assessee in the two bank accounts during the demonetization period between 10.11.2016 to 30.12.2016. The assessee was asked to explain the source of cash deposit during the demonetization period and finally the assessee produced the details in response to the show cause notice issued by the AO. On verification of cash book, the AO noted that there are discrepancies in the cash book and the bank accounts of the assessee regarding the cash deposit as there is a gap of one or two days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Ld. AR has pointed out that in the details of the purchases as per ledger account maintained by the IOCL, the quantities of certain purchases are wrongly mentioned. For example he has referred to page 71 of the paper book and submitted that in the said ledger quantity of purchase is shown as 6 KL of MS whereas as per the invoice of purchase dated 27.04.2016 placed at page no.113 of the paper book the quantity is 12 KL. Therefore, the discrepancies as noted by the AO are due to the factual errors in the entries of ledger maintained by IOCL. He has further submitted that the assessee has purchased both HSD and MS of 6 KL each, total quantity comes to 12 KL per order. Similarly, he has referred all the entries in the ledger maintained by the IOCL which was considered by the AO and reconciliation was made with the details given in the invoices of purchase. Ld. AR has referred to the page 20 of the CIT(A) where a comparative chart giving the correct details as well as incorrect details shown in the ledger maintained by the IOCL is reproduced which clearly shows that there are factual mistakes regarding the quantity of purchase of HSD MS during the year under consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertinent to note that the AO has even not considered the undisputed normal purchase and sale made by the assessee during this period of demonetization. On appeal the assessee has produced additional evidence in shape of the invoices of purchase, bank account statements to show that there are factual mistake in the ledger account maintained by the IOCL showing incorrect quantity of purchase made by the assessee. We find from the details of ledger account maintained by IOCL that in most of the cases the IOCL is showing purchase of only one product/commodity either HSD or MS whereas as per the invoices and payment of purchase consideration by the assessee it is evident that the assessee has purchased mix quantities of diesel and petrol in the ratio of 6 kl each or 9:3 Kl of diesel and petrol respectively. From the details of purchase shown in the invoices it is clear that the capacity of the vehicle fetching the petrol and diesel is 12 Kl and therefore, in one trip the assessee is purchasing total quantity of 12 kl in the ratio of 6 kl each or 9 kl to 3 kl diesel and petrol respectively. These factual details are clearly evident from the invoices which were produced by the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o verify the availability of cash in the cash book. The appellant before me as well as AO has submitted copy of cash book for the relevant period which shows the availability of cash due to cash sales in the cash book. The source of cash withdrawal is cash sales. Hence, cash deposited in the bank account prior to demonetization period or after demonetization is found to be out of cash sales. Thus, such discrepancy has been duly explained by the appellant and cannot become the reason for rejection of books of account and treating the cash deposited as unexplained. Therefore, the basis taken by the AO is, hereby, rejected. 4.1.4 . Now coming to the issue of inflation of purchases and introduction of unaccounted cash under the garb of bogus sales, the AO has made a comparative chart which is based upon monthly quantitative purchase statement of IOCL and monthly quantitative purchase detail mentioned in the books of account of the appellant. The AO found huge variation between the both. Quantitative purchase from IOCL was found much lesser than the purchase entry made in the books of account. For this reason, the AO has worked out negative closing balances in quantity for both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0687438405 14.05.2016 MS EURO 6 705600 0687438405 14.05.2016 MS EURO 6 705600 HSD 6 0687568190 20.05.2016 HSD 6 703288 0687568190 20.05.2016 HSD 6 703288 MS EURO 6 0687602276 21.05.2016 HSD 6 703288 0687602276 21.05.2016 HSD 6 703288 MS EURO 6 06877 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.09.2016 MS EURO 6 738067 0690062551 27.09.2016 MS EURO 6 738067 HSD 6 0691039250 12.10.2016 MS EURO 9 774910 0691039250 12.10.2016 MS EURO 9 774910 HSD 3 0691099709 14.10.2016 MS EURO 9 774910 0691099709 14.10.2016 MS EURO 9 774910 HSD 3 0691123967 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HSD 3 791519 0692593129 12.12.2016 MS EURO 9 791519 HSD 3 0692646672 14.12.2016 HSD 6 758611 0692646672 14.12.2016 MS EURO 6 758611 HSD 6 0692688554 15.12.2016 MS EURO 3 725704 0692688554 15.12.2016 MS EURO 3 725704 HSD 9 0692772195 19.12.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 753567 0693004193 28.12.2016 MS EURO 3 753567 HSD 9 0693034523 29.12.2016 HSD 9 753567 0693034523 29.12.2016 MS EURO 3 753567 HSD 9 0693058116 30.12.2016 MS EURO 6 788250 0693058116 30.12.2016 MS EURO 6 788250 HSD 6 0693087117 31.12.2016 MS EURO 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05065 0693430193 14.01.2017 MS EURO 6 805065 HSD 6 0693437069 14.01.2017 HSD 6 805065 0693437069 14.01.2017 MS EURO 6 805065 HSD 6 0693536347 19.01.2017 HSD 9 781799 0693536347 19.01.2017 MS EURO 3 781799 HSD 9 0693698811 25.01.2017 HSD 6 815636 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.03.2017 MS EURO 6 815636 HSD 6 0694707486 06.03.2017 MS EURO 6 815636 0694707486 06.03.2017 MS EURO 6 815636 HSD 6 0694857789 11.03.2017 MS EURO 6 815636 0694857789 11.03.2017 MS EURO 6 815636 HSD 6 0695024860 18.03.2017 MS EURO 6 815636 0695024860 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MS EURO 6 815636 HSD 6 From the above few instances, it is evident that the appellant had purchased MS and HSD quality of petrol/diesel, but, in the statement of IOCL only one item and quantity thereof has been shown. Whereas, values of items sold has been taken correctly as per invoices. Thus, the contentions of the appellant that the statement of IOCL was incorrect, are found acceptable. If purchases as per invoices are considered, month wise closing stock of petrol and diesel will be as under: Month Opening stock (Litre*) Quantity Purchased as per AO (Litre) Add: Purchases not shown in the statement of IOCL but mentioned in purchase invoices (Litre) Total Purchase (Litre) Purchase as per books of account (Litre) Sales (Litre) Closing Stock (Litre) April 14454 78000 0 78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orked out above are tallied with the entries made in the books of account of the appellant. Month Opening stock (Litre*) Quantity Purchased as per AO (Litre) Add: Purchases not shown in the statement of IOCL but mentioned in purchase invoices (Litre) Total Purchase (Litre) Purchase as per books of account (Litre) Sales (Litre) Closing Stock (Litre) April 14353 96000 6000 102000 102000 99929 16424 May 16424 132000 18000 150000 150000 154226 12198 June 12198 108000 0 108000 108000 107305 12893 July 12893 36000 12000 48000 48000 50705 10188 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been found inflated. Accordingly, the addition of Rs. 1,37,25,500/-, being cash deposit in the bank accounts does not come under the purview of unexplained cash deposit u/s 68 of the Act. Therefore, the above addition is hereby deleted . The appeal on the above grounds is allowed . 7. We further noted from the monthly details of purchase made by the assessee as well as the payments as reflected in the bank account statement of the assessee that the quantity of the purchase and corresponding payments are duly matched without any discrepancy whereas in the ledger account maintained by the IOCL the factual mistakes are apparent regarding the quantity of purchases as shown only 6 kl instead of 12 kl and in some cases it is shown only 3 kl or 9kl. Therefore, these quantities as shown in the IOCL statement are not even matching with the value shown in the same documents. Comparative chart as reproduced by the CIT(A) clearly manifest these factual mistake in the IOCL statement regarding the quantity of purchase and hence, the assessment order is entirely based on incorrect facts without verifying the correct details and the facts from the supporting documents being the invoices issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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