9911796707
TMI Blog2023 (12) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... Multi-State Co-Op. Credit Society Limited and without considering the statement of Shri Nilesh Kamble wherein it is stated that "as per the instructions of Mr. Akhilesh Joshi, the overall head of Mumbai Branch of the society, the total cash of Rs. 2 crores was deposited into the bank account of the society and thereafter an equivalent amount was transferred through RTGS to the assessee in four tranches" 2. "The Ld. CIT(A) erred in restricting the addition of Rs. 79,00,000/- to Rs. 1,06,650/- considering only Rs. 53,94,245/- difference in Net Profit on entire sale vis-à-vis Net Profit on this sale without appreciating the fact that the assessee has not submitted documentary evidence of actual delivery and sale of the Gold." 3. "The Ld. CIT(A) erred in deleting the addition of Rs. 5,00,000/- being unexplained expenditure without appreciating the fact that Shri Ashit Doshi in his statement u/s. 132(A) of the Act has stated that the assessee had given Rs. 84,00,000/- to Shri Ashit Doshi and had brought back Rs. 79,00,000/- as bogus sale bills in its books, further, commission of Rs. 5,00,000/- paid to Shri Ashit Doshi for arranging the transaction is an unexplained expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained cash credit. 5. The second disputed issue is with respect to sale of bullion to four entities, (i) Aman Trading of Rs. 17,99,550; (ii) Aman Trading Enterprises of Rs. 17,99,500/-; (iii) Marina Trading of Rs. 21,50,500/-; Pradip Trading of Rs. 21,50,000/- all aggregating to Rs. 79,00,000/-. The AO has dealt on the statement of Mr. Ashit Doshi, and on the sale bills of the assessee provided to the aforesaid entities. Whereas the AO has not accepted the contentions of the assessee that, the transactions of sale of bullion to the parties are genuine and supported with the documentary evidences i.e photocopies of sales invoices and bank statements evidencing receipt of sale consideration vide letter dated 21.11.2019. Further contentions of the assessee are that there is a violation of the principles of natural justice as the statement of Mr. Ashit Doshi was recorded behind the back of the assessee and the AO ought to have provided a copy of statement to confront the parties, but the A.O has relied on the statement recorded and made an addition of Rs. 79 lakhs. 6. On the third disputed issue, The AO alleged that the assessee must have paid commission for obtaining the bogus bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of facts, submissions of the assessee, findings of the AO and dealt extensively on the facts and provisions of the Act and judicial decisions and directed the Assessing officer to delete the additions and partly allowed the assessee appeal. Aggrieved by the CIT(A)order, the revenue has filed an appeal before the Hon'ble Tribunal. 10. At the time of hearing, the Ld. DR submitted that the CIT(A) has erred in directing the AO to delete the addition to the extent of Rs. 1.97 crores though the assessee has not proved actual sale of gold. The Ld. DR also emphasized that the CIT(A) has erred in allowing the relief to the extent of Rs. 77.93 lakhs as against of Rs. 79 lakhs being added by the A.O. though the assessee has not submitted any documentary evidence of actual delivery of gold and on the third disputed issue, the CIT(A) has erred in deleting the addition of Rs, 5 Lakhs made by the AO on account of unexplained expenditure on accommodating entries obtained from third parties. Further the CIT(A) has erred in deleting the deposits of Rs. 5.53 crores in the bank accounts by the assessee during the demonization period overlooking the observations of the Assessing Officer. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson who delivered the bullion to the Society; 3.2.3. Mr Ajit Jain did not remember the name of the person receiving the bullion 3.2.4. P.A. No of the Society does not bear a photograph; 3.2.5. The office of the Society though located in Zaveri Bazar, which is the hub of gold and bullion trade, purchased such bullion from the appellant-company in Vile Parle; 3.2.6. The appellant-company has taken signature of an unknown person on the bill of the Society without any name or identification. 3.2.7. The appellant-company has delivered the gold bars to an unknown person at the office of the Society and the appellant company does not have any documentary evidence of actual delivery of the gold bars to the Society 32.8. Statement of Mr Nilesh Kamble Mr Nilesh Kamble in his statement on oath dated 07.04.2017 stated that he does not remember whether the Society has purchased bullion from the appellant-company; 3.2.9. In the statement on oath, Mr Nilesh Kamble stated that "as per the instructions of Mr Akhilesh Joshi, the overall head of Mumbai Branch of the society, the total cash of Rs 2 crores was deposited into the bank account of the society and thereafter an equivalent amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made the delivery to the Society. However, he may not be very, sure due to the passage of time of nearly 5 months from the date of transaction. It would not be out of place to mention that confirmation of delivery in today's day and age is simpler and fool proof telephonically with the help of smart phones. (c) PAN card of a non-individual person does not bear a photograph The Assessing Officer ought to have thus, known the fact that PAN card of the Society would not bear a photograph and that a PAN card is issued by the Income-tax Department; (d) The parties to a transaction are entitled to arrange their affairs in such a manner that are most convenient to them and the Assessing Officer cannot sit in the armchair of a businessman and decide the manner in which the business should be f conducted 3.5 The appellants submit that the Assessing Officer in making the impugned addition relied on the statement on oath of Mr Nilesh Kamble, branch manager of the Society, recorded under section 131 of the Act - in this, we submit that - 3.5.1 There is gross violation of the principles of natural justice inasmuch as the said statement recorded on 07.04.2017 at the premises of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidentiary value of the statement on oath of Mr Ajit Jain, which in law is not correct. 3.5.5. The statement is not recorded in the presence of the appellants, and hence, the same cannot be treated as conclusive evidence unless confronted to the appellants, for rebuttal. The Assessing Officer has not allowed cross examination by the appellants of Mr Nilesh Kamble. It could well be that due to prevailing adverse situation, Mr Nilesh Kamble was compelled to accept something which is not the fact or he must have stated something to put himself out of harm's way of any future legal proceedings or he would have stated as instructed. In view of the above, the appellants contend that the impugned addition is baseless and ought to be deleted." 13. Whereas the CIT(A) has dealt on the facts and the information and has deleted the addition as the assessee has filed the material evidences in support of claims in the proceedings and observed at Para 8.2 to 8.9 of the order as under: Decision on Ground No. 2 "8.2 Briefly the facts related to the issue under consideration are that a Search and Seizure action was carried out in the case of the appellant company on 07/04/2017. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the appellant, since the statements of other parties were not recorded in the presence of the appellant, that cannot be treated as conclusive evidence unless confronted. The statement of Mr. Nilesh Kamble was neither confronted with any responsible person of the appellant co. nor was cross examined in appellant's presence. It is further contended that there are T. of possibilities that there were adverse situation or Mr. Nilesh Kamble had compelling situation to accept something which was not the fact or to put themself out of the part of any legal proceeding in future or they would have stated as instructed. According to the appellant, it was as per natural law & justice that the AO would have offered the assessee an opportunity of cross examination & the statement was duly confronted. It is further stated that Mr. Ajit Jain, Director of the appellant company had asked before the AO for cross examination opportunity before framing any opinion against Mr. Ajit Jain & M/s Mangal Royal Jewels Pvt Ltd. 8.3.4 The appellant has consistently taken the stand that there was no discrepancy found between physical stock and stock in the books of accounts while stocks were physica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant has only received RTGS amounting to Rs. 2 crore and no gold bar was actually sold/delivered against the said receipt. 8.6 Against these observations, the appellant has argued before the undersigned that- 8.6.1 During the Search & Seizure action carried out at appellant's premises on 08.04.2017 by Investigation Wing, Mumbai, the search team had physically verified the entire stock. The stock available at the time of search was also valued by an independent Government appointed Registered Valuer. No discrepancy was found between the physical stock and the stock in the books of accounts. In the assessment order, I do not find any remark made by the AO with respect to any divergence between physical sale of gold during the impugned year & sales as recorded in the books of accounts 8.6.2 According to the appellant, the A.O. has not doubted the genuineness of the purchases made by the appellant. It is also contended that when the stock register has been accepted by the A.O. during the assessment proceedings doubting the sales cannot be justified on the basis of a third-party statement or other circumstantial evidences viz, no photograph of the recipient or unk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h value transactions, it can be that the name of the person be not remembered who has just visited once for a one off transaction. Further, the appellant is engaged in retail trade and hence, came in contact with so many persons that it may be difficult to remember the name of each and every person with whom transactions have taken place. 8.6.6.2 Moreover, it is difficult for any person to remember precisely things not so important, viz., name of delivery boy who has delivered goods to one-off customer, that too, under the daunting pressure of an on-going search action. Mr Ajit Jain, after some efforts, recollected the name of the delivery boy: Mr Shankar Kumavat, who would have made the delivery to the Society. However, he may not be very sure due to the passage of time of nearly 5 months from the date of transaction. 8.6.6.3 photograph. PAN card of a non-individual person viz., the Society does not bear a 8.6.6.4 The parties to a transaction are entitled to arrange their affairs in such a manner that are most convenient to them and the A.O. cannot sit in the armchair of a businessman and decide the manner in which the business should be conducted. 8.6.6.5 Apart from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing on record which suggest that the RTGS of Rs. 2 crores was returned back by the appellant company to the Society or used for a purpose other than its business purpose. Logically, the Society will not leave such a huge amount in the bank account of the appellant company had the amount not utilised for purchase of gold or bullion. 8.9 If the statement of Mr Nilesh Kamble is taken on it's face value, where he has stated that no gold or bullion was purchased by the Society against the said cash, the next logical inference is either the cash was returned back to the Society or equivalent amount of gold or bullion was sold in the name of some other entity. There is nothing on record, which suggest that cash was thereafter returned back to the Society. This situation will not arise normally since the AO has neither doubted the corresponding purchases of the gold & bullion as recorded in the books of accounts nor any excess stock was found by the Search team. Now the only remaining possibility is that the equivalent amount of gold or bullion was sold in the name of some third party resulting into some benefit to the company. As claimed by the appellant, this sale of Rs. 2 Crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a broker Mr Mahesh Mangal to deposit in the bank accounts of his aforesaid proprietorship/ partnership firms, old currency notes of denomination Rs 500 and Rs 1000 which have ceased to be legal tender effective from 09.11.2016; 4.22. He further stated in his statement that he received Rs 84,00,000 in cash and after deducting his charges of Rs 5,00,000, made RTGS from the aforesaid accounts aggregating Rs. 79,00,000. 4.2.3. Receiver signature on the sale bills are different from each other, though allegedly controlled by the same person Mr Ashit Doshi; 4.3. the appellants contend that the impugned transaction of sale of bullion to the parties mentioned in Sr no 4.1 above is supported by documentary evidences being photo copy of sale invoice of each buyer and bank statement evidencing receipt of sale consideration. All these documents are filed before the Assessing Officer - refer letter dated 21.11.2019 of the appellants filed with the Assessing Officer page nos 51 to 106 of the paper book. 4.4. The appellants contend that the reasons given by the Assessing Officer in point no 4.2 above are legally not tenable inasmuch as 4.4.1. There is gross violation of the principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent people. If what Shri Aiit Jain has stated is true all the four signatures should be of Shri Ashit Doshi" (emphasis ours). Thus, from the above it can be inferred that the event of purchase of goods and actual delivery are at two different points of time and that the delivery of goods taken at Sion may be by different persons working for different proprietor/ partnership concerns, under the authority of Mr Ashit Doshi. The Assessing Officer thus, misinterpreted the relevant facts and made the impugned addition. 4.4.4. The appellants further contend that there being contrast views expressed by Mr Ajit Jain and Mr Ashit Doshi, the Assessing Officer has conveniently accepted the version of Mr Ashit Doshi ignoring the evidentiary value of the statement on oath of Mr Ajit Jain, which in law is not correct. In view of the above, the appellants contend that the impugned addition ought to be deleted." 15. The CIT(A) after considering the facts, submissions and information has granted the partial relief and dealt at Para 9.2 & 9.3 of the order as under: "9.2 On careful verification, it is observed that nature of addition as highlighted in ground of appeal no. 3 i.e., additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of unexplained expenditure U/sec 69C of the Act on accommodating entries obtained from third parties. The Ld. DR contentions are that the AO has considered the nature of the accommodation entry and also incurring of expenditure in obtaining the benefit to the assessee. Whereas the CIT(A) relied on the written submissions dealt in the appellate order at Para 10.1 of the order as under: " 10.1 During the course of the appellate proceedings the AR of the appellant had submitted under: 5. Re-ground of appeal No.4, addition under section 69C-Rs. 5,00,000/- 5.1. The Assessing Officer has made an addition of Rs. 5,00,000 under section 69C, being alleged commission paid in cash to Mr Ashit Doshi for obtaining the alleged amount of Rs 79 lacs through bank without any corresponding sale of bullion. 5.2, The appellants contend that the Assessing Officer erred in making the impugned addition inasmuch as there is no evidence brought on record to substantiate that the appellants have paid cash of Rs to Mr Ashit Doshi. It is pertinent to note that during the course of search action on the appellants the Investigation team has not found any material or document that would indicate that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not given any specific reason or adverse remark to allege the sales made to such parties as fictitious and the amount received from such parties as unaccounted money of the appellants. 7.2.2 during the course of assessment, the appellants filed documentary evidences, being sales invoice, ledger account of such parties and bank statements to prove the genuineness of the transactions - refer letter dated 21.11.2019 of the appellants filed with the Assessing Officer page nos 51 to 106 of the paper book. The Assessing Officer has not disproved the documentary evidences filed by the appellants. In view of the above, the appellants contend that the impugned addition made under section 68 of the Act ought to be deleted. 7.3. Regarding parties mentioned in Table A in para 7.1. above, the appellants contend that 7.3.1. The sales made to abovementioned parties are supported by documentary evidence like photo copy of sales bill, PAN card and bank statements filed with the Assessing Officer - refer letter dated 21.11.2019 of the appellants filed with the Assessing Officer page nos 51 to 106 of the paper book. 7.3.2. It is pertinent to mention that the Assessing Officer has not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the buyer has weak financials, their Directors have failed to appear before the SEBI adjudicating authority, is fined by the SEBI, are irrelevant considerations. Further, the financials of the said entity referred to by the Assessing Officer are for the period prior to 31" March, 2015 and the year under reference is previous year ended 31 March, 2017, hence, irrelevant. The fact that such company is listed itself proves the identity of the purchaser company and the Assessing Officer cannot expect the appellants to verify the credentials of an entity and then decide to sell goods to them when the fact is that the appellants are getting the sale consideration immediately before the delivery of goods. 7.3.5.4. Heema Infocom Ltd and Al Commodities Pvt Ltd - the appellants have submitted P.A. No of the companies under reference and as such, the identity is proved. The appellants cannot be expected to verify the credentials of such entities when the buyer(s) has given the sale consideration over-the counter in retail trade. 7.3.5.5. Mr Rupesh Doshi, proprietor of R.R. Steel - The appellants have submitted P.A. No of the customer and as such, the identity is proved. The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Customer 11.3.5 No need-to-know address of the customer 11.3.6 No need to check whether the customer is tax compliant or not 11.3.7 No need to know about legal background of customer 11.4 Apart from the above, the appellant, during appellate proceedings has stated about these entities in the following manner. 11.4.1 In the case of transaction with M/s ACIL Cotton Industries Ltd, we had a CASH/RTGS payment mode deal with this company. And in such deals, we as a business man have constraints which have already discussed in reply to show cause notice It is not possible to verify all such details, as expected by the Ld. AO, in over the counter sale transaction which got settled in RTGS mode. 11.4.2 In the case of transaction with M/s R C F Finance Private Limited & M/s Girish Hotel and Health Resorts Private Limited, it was not possible to ascertain whether potential customer is regular in filling its income tax return or a non-filler of return. Further, it is not mandate in any law in force to get declaration whether the customer is regular in filing income tax return. We have got a valid PAN of the buyer & discharge our liability casted upon us u/s 272B. 11.4.3 In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of any legal proceeding in future he would have stated as instructed, may be. It will be as per natural law & justice if the Ld. AO offer the assessee an opportunity of cross examination & the statement should be confronted. Hence, Mr. Ajit Jain had asked for cross examination opportunity before framing any opinion against Mr. Ajit Jain & M/s Mangal Royal Jewels Pvt Ltd. Mere placing angeliance upon the statement of servant & driver and without offering any cross examination by the AO to Mr. Ajit Jain & without confronting the statement upon which reliance is being place will not be truly justice in the eye of law. And it will be against the doctrine of "Audi alteram partem". 11.5 Apart from the above, the appellant has also made identical submissions as that made for ground no. 2. Circumstances and findings of the AO also remain the same except the issue of poor financial of the 14 entities which have been dealt in the preceding paragraphs. Hence, the undersigned observations and findings for ground no. 2 would mutatis mutandis apply to this ground of appeal no. 6 as well. Hence, it is held that difference in the NP on the entire sale vis-à-vis NP on this sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned addition under section 68 of the Act. 6.5. The appellants contend that the reasons mentioned by the Assessing Officer are misplaced for the following - 6.5.1. It is a known fact that sales increase in festive seasons in India. As per the customs and traditions in India, gold and/ or jewellery is usually bought on auspicious days or during festive season. Diwali is considered as the most auspicious festival and there is a tendency of high demand in gold/ jewellery during pre and post-Diwali festival. Further, for the year under reference, Diwali festival commenced from 28th October, 2016 to 1" November, 2016, thus, there is high sales in the month of October, 2016 and November, 2016. The Assessing Officer in his zeal to make the impugned addition clearly ignored this vital fact that Diwali festival had just gone by when the demonetisation was announced by the Government of India. This explains the high sales in October, 2016 and till 08.11.2016. 6.5.2. The allegation of the Assessing Officer that the same customers have purchased gold or jewellery from different entities belonging to the same group (on facts, from the appellant-company and Shree Mangal Jewels Pvt Ltd) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12.3.6 Multiple bill books have been utilised by the appellant. 12.4 It is observed that elaborate reply has been made by the appellant before the AO (extensively quoted in the assessment order too) as well as before the undersigned on this issue. My observations on the same are - 12.4.1 According to the appellant, during the relevant year, Diwali festival had commenced from 28th October, 2016 to 1st November, 2016, thus, there was high demand and sales in the month of October & November, 2016. The demonetisation was announced by the Government post-Diwali season. This explains the high cash sales in October, 2016 and till 08.11.2016. In this regard, it is observed that demonetization was announced by the Govt. on 8th November, 2016. The cash sales shown by the appellant, pre & post demonetization were- Month Cash Sales (in Rs. ) October, 2016 1,43,25,194 November, 2016 4,22,27,302 These sales are shown in the cash book and regular books of accounts of the appellant. It is further explained before the AO that cash book of M/s MRJPL was provided to the search team, which reflected opening balance of Rs. 1,42,65,096/- on 01.11.2016 and closing balance of Rs. 5,60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once there is no requirement in the Income Tax Act for checking the Tax return filing status of the buyer by the sellers, no adverse inference can be drawn against Comm the appellant on this count. Hence, the AO's observations in this regard, is unfounded. 12.4.3 On the observation of the AO that the same customers have purchased gold or jewellery from different entities belonging to the same group (on facts, from the appellant company and Shree Mangal Jewels Pvt Ltd) is also without any basis. The appellant has submitted that the customers may buy the jewellery of their taste, whether it is of the appellants or a group company of the appellants. 12.4.4 Further there is no merit in the suspicion of the AO that there were some delays in depositing the cash, in the bank account. In para 8.6 of the assessment order, the AO has shown deposit of cash of Rs. 3.65 crores & Rs. 1.70 Crores on 10th & 12th Nov., 2016 respectively. After that Rs. 7 lakh, Rs. 8.30 lakh and Rs. 5 lakh were deposited on 19th & 28th Nov., & 15th Dec., 2016. When the AO him self observed that the next possible date for deposit of the cash after demonetization, was 10th Nov., 2016, depositing total cash of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or such financial year." (emphasis ours) 9.3. From a cursory glance of the provisions of section 69A, it is crystal clear that the provisions can be invoked only when the appellants are found to be the owner of any money, bullion, jewellery or valuable article or thing which is/are not recorded in the books of account. However, on the facts of the case, it is submitted that the sales are recorded in the regular books of account and hence, the provisions of (Section 69A are not applicable. 9.4. It would not be out of place to mention that there was a search action on the appellants on 07.04.2017, and during the course of search no evidence was found that appellants are owner of any unaccounted money/assets. 9.5. Further, the impugned addition can be made only if the alleged unaccounted money/ asset is not recorded in the books of account or if recorded, no explanation or satisfactory explanation is given. However, on the facts of the case, the appellants have explained that the aforesaid amounts in respect of which addition is made, is sales credited in the regular books of account during the year under reference. In view of the above, the appellants submit that the aggregat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the assessment order that the Assessing Officer has accepted the annual accounts prepared by the appellants inasmuch as the starting point of the computation of income prepared by him is the income per computation of income filed with the return of income which is based on the profit and loss account of the appellants. Further, while adjudicating other issues such as, addition under section 68 of the Act the Assessing Officer has relied on the figures as appearing in the books of account. 10.5. The appellants further, submit that unless any specific defects are pointed out in the books of account by the Assessing Officer, the same cannot be summarily rejected. In this regard, reliance is placed on the following decisions- (a) CIT v. Symphony Comfort Systems Ltd. [216 Taxmann 225 (Guj)] (b) CIT v. Ceramic Industries [396 ITR 509 (Raj)] (c)PCIT v. Garden Silk Mills Ltd. [388 ITR 237 (Guj)] (d) CIT vJacksons House [198 Taxman 385 (Del)] (e) CIT v. Jananamandal Ltd. [214 Taxman 49 (All)] (f) CIT v. Salochana Bhatia [208 Taxmann 224 (P&H)] 10.6. The appellants further, submit that merely because an addition is made in the assessment order, it does not mean that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... netization period and also the details of quantity purchases, sales & stock in F.Y.2016-17 and also the VAT returns were filed. The assessee has also submitted the details of cash sales reflected in the books of accounts and the comparative statement of F.Y. 2015-16 & F.Y. 2016-17. Whereas, the Assessee has made cash deposits in the bank account aggregating to (Rs. 23.73. crs) in the F.Y. 2016-17 and out of which (Rs. 13.27.crs) pertaining to demonetization period. The assessee has obtained the PAN of customers and was filed on record or in other cases, were PAN is not available, the assessee has obtained Form No.60 and complied with the Income Tax provisions. The CIT(A) has considered all the material evidences filed from time to time, the tax audit report and quantitative tally of stocks. The Ld. AR further submitted that the demonetization period preceded by the Diwali sales on 30th October 2016 and there was increase in sale of jewellery. The assessee had filed the details of party wise sales in cash above Rs. 2 Lakhs from 120 parties disclosing date of sale, PAN, Sale bill amount and all aggregated to Rs. 3,86,06,598. Similarly, in the cases were the cash transaction of sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s argued that if there is any violation of the statutory provisions, the consequences will be only under the relevant provisions of RBI Act, 1934 and those violations cannot lead to any addition under section 68 of the Act. The learned Counsel also placed reliance on the following judicial pronouncements rendered on identical facts of the case as that of the assessee. Hon'ble Kolkata Tribunal in the case of CIT v. Associated Transport (P) Ltd. [1996] 84 Taxman 146/[1995] 212 ITR 417 wherein the Hon'ble Tribunal found that the assessee had sufficient cash in hand in the books of account of the assessee, therefore, held that there was no reason to treat this amount as income from undisclosed sources and it was not a fit case for treating the said amount as concealed income of the assessee. The revenue moved to Hon'ble Calcutta High Court against the order of the Hon'ble Tribunal and the Hon'ble High Court has confirmed the order of the Tribunal while deleting the penalty; the Hon'ble High Court of Calcutta held as under: "8. The Tribunal was of the view that the assessee had sufficient cash in hand. In the books of account of the assessee, cash balance was u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... double taxation once as sales and again as unexplained cash credit which is against the principles of taxation. It is also on record that the assessee was having only one source of income from trading in beedi, tea power and pan masala and therefore provisions of section 115BBE of the Act will have no application so as to treat the income of the assessee as income from other sources. Hon'ble Kolkata Tribunal in the case of Associated Transport (P) Ltd. (supra) on identical facts took the view that when cash sales are admitted and income from sales are declared as income, wherein the Hon'ble Tribunal found that the assessee had sufficient cash in hand in the books of account of the assessee, that there was no reason to treat the cash deposits as income from undisclosed sources. The Hon'ble Vishakapatnam Tribunal in the case of Hirapanna Jewellers (supra) on identical facts held that when cash receipts represent the sales which the assessee has offered for taxation and when trading account shows sufficient stock to effect the sales and when no defects are pointed out in the books of account, it was held that when Assessee already admitted the sales as revenue receipt, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in business of selling dry fruits Assessing Officer made addition on - account of bogus purchases at rate of 25 per cent of purchases made by assessee from certain parties but sales made to these parties were completely ignored It was - found that purchases and sales with alleged bogus parties were supported by bills and vouchers as well as stock register was maintained in Tally accounting software by - Also, payment of purchase consideration and receipt of sale consideration from these parties were made through account payee cheque Whether thus, if - purchases were to be removed then corresponding sales were also required to be removed from regular books of account, which would lead to assessee's income falling below income declared/returned by it - Held, yes - Whether thus, impugned addition made on account of bogus purchases was to be deleted Held, yes [Paras 15.9] [In - favour of assessee] IV. Section 68 of the Income-tax Act, 1961 - Cash credit (Bank deposits) - Assessment year 2017-18 - Assessee- company was engaged in business of selling dry fruits Post-demonetization, assessee deposited cash amounting to Rs. 180.53 crore in its bank accounts - Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made from the cash balance available in the books of account, in my view, there is no question of treating the said deposits as unexplained cash deposit as opined by the Assessing Officer. 5. The Ld A.R relied on certain case laws which are relevant to the issue under consideration. In the case of Lakshmi Rice Mills v. CIT [1974] 97 ITR 258 (Patna), it has been held that, when books of account of the assessee were accepted by the revenue as genuine and cash balance shown therein was sufficient to cover high denomination notes held by the assessee, then the assessee was not required to prove source of receipt of said high denomination notes which were legal tender at that time. In the case of Asstt. CIT v. Hirapanna Jewellers [2021] 128 taxmann.com 291/189 ITD 608 (Visakhapatnam Trib.), it was held that when the cash receipts represented the sales which has been duly offered for taxation, there is no scope for making any addition under section 68 of the Act in respect of deposits made into the bank account. 29. The CIT(A) has considered the details of sales, the stock register and the consistency of the turnover. The assessee has submitted the details of cash sales/receipts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,153 under section 68 of the Act, received through banking channel on sale of stock recorded in the regular books of account, details of which are given below- (a) Rs 2,70,000, being 1.35 per cent of the sale consideration of Rs 2 crores received from Dyaneshwari Multi State Urban Co-Op Society; - (b) Rs 1,06,650, being 1.35 per cent of the sale consideration of Rs 79 lacs received from entities controlled by Mr Ashit Doshi; (c) Rs 4,42,503, being 1.35 per cent of the aggregate sale consideration of Rs 3,27,77,981 crores received from various customers. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the impugned addition inasmuch as the CIT(A) has not correctly appreciated the facts of the case in its entirety. The appellants further, contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have sustained the impugned addition since the provisions of section 68 of the Act are not applicable inasmuch as the entire amount received on sale of stock is accounted for in the regular books of account and as such, there is no unexplained credit, which is a pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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