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TMI Blog2023 (8) TMI 1484X X X X Extracts X X X X X X X X Extracts X X X X ..... t correct in law and facts. 2. That on the facts and circumstances of the case, Ld. CIT (A) has erred in deleting addition of Rs. 3,43,50,000/- made by AO on account of unexplained cash credit u/s 68 r.w.s. 115 BBE of the Income Tax Act, 1961. 3. That the Ld CIT (A) has erred in ignoring the analysis of month-wise sales during the period F Y 2015-16 and F Y 2016-17. During the month of November, 2016, the assessee has declared Cash Sales of Rs. 3,44,86,905/- whereas in the corresponding period of November, 2015, the assessee declared Cash Sales of Rs 60,32,556/-. The steep jump in sales within a little span of time i.e. just before demonetization period stands unexplained. Moreover, customer details to whom such sales were made also stand unverified. 4. Whether the learned CIT (A) erred in holding, that he purchases of old gold was adjusted against sales made to the very same person, when neither the name and address of the parties from whom old gold was purchased was produced nor any evidence to show how the same was set off against any disclosed sales. 5. Whether the Ld. CIT (A) erred in accepting the genuineness of the purchases of old gold when neither the ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished by the banks u/s 133(6) of the Act, the ld. AO tabulated the dates on which various cash deposits were made in both the banks in page 18 of the assessment order. The assessee was asked to explain the source of those cash deposits made during demonetization period. The assessee replied that the cash deposits were sourced out of cash sale collection, advance received from customers and available cash in hand. The assessee also replied that pursuant to the demonetization announced by the Government of India, it seized the business opportunity to make huge cash sales in the night of 8th November 2016 but did not provide details of customers or their PAN by stating that the personal details of retail customers are to be collected only when the cash sale invoice exceeded the specified threshold and that all the cash sales were made on 8th Nov 2016 below the threshold limit, there was no obligation for the assessee to collect the personal details. The assessee explained by way of cash book and details of cash sales that as many as 211 customers were entertained on 8th Nov 2016 as under:- a) 67 customers had bought items with sale value less than Rs 1.20 lacs per bill which als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... month of November 2016 at Rs 3.44 crores but no supporting evidence of customers to whom sales have been made was furnished. The ld. AO also compared the cash sales made in the corresponding period in earlier year and noticed that there was steep increase in cash sales in November 2016. The ld. AO also observed that VAT returns for the financial year 2016-17 was called for and examined and there were some discrepancies seen in the turnover as per ITR and VAT return in the quarterly return filed. The ld. AO also noticed that assessee had revised the VAT returns for all the 4 quarters after the announcement of demonetization. The assessee also explained the said discrepancy before the ld. AO by stating that there were over reporting of sales in first two quarters and under reporting in third quarter, having a net effect of over reporting of Rs 1.06 lacs in the Tax return as compared to accounts. Tax effect of the same was negligible and hence returns were not revised, more particularly because GST was launched in next year. With these observations, the ld. AO disbelieved the explanations offered by the assessee and proceeded to treat the cash deposits of Rs 3,43,50,000/- as unexplai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o note that cash book of the assessee was accepted by the ld. AO, stock registers were accepted by the ld. AO and cash sales reported by the assessee were also accepted by the ld. AO. We find that the assessee had duly proved the fact of corresponding reduction in stock to the extent of cash sales made by it on 8th November 2016. We are unable to appreciate the observation made by the ld. AO in para 8 of his order that cash book was prepared by the assessee only after receipt of notice u/s 143(2) of the Act. In the instant case, the notice u/s 143(2) of the Act was issued on 24.09.2018. Whereas in the return of income filed by the assessee on 30.10.2017 itself, the assessee had disclosed cash sales made on 8th November 2016 and included the same in the cash book and the entire cash book was duly placed before the statutory and tax auditors of the assessee company and return filed after due conduct of audit thereon. As stated earlier, no discrepancies whatsoever were found by the ld. AO in the cash book, stock registers, sales book etc except entertaining suspicion in his mind with a pre-conceived notion in order to reach a pre-determined destination. Moreover, we find that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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