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TMI Blog2024 (11) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... sustaining addition of Rs. 2,00,000 on the count of unexplained cash credit into bank account u/s 68, is unjustified and is liable to be deleted." 3. "On the facts and circumstances of the case and in law, the Id CIT(A) has erred in sustaining the application of sec 115BBE." 4. "The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing." Additional Grounds of appeal (dated 12.07.2024, submitted on 19.07.2024) Additional Gr. No. 1: "On the facts and circumstances of the case and in law, addition made by AO of Rs. 85,78,000 as unexplained cash credits u/s 68 is invalid; books of account rejected by applying sec145(3); after rejecting the books, profit ought to have been estimated by applying flat rate of profit on turnover of Rs. 93,17,434; AO cannot rely on rejected books for making addition on cash deposits into bank which is sourced out of cash sales of Rs. 93, 17,434; addition is liable to be deleted; relied on KY Pilliah & Sons (1967) (SC); ISMT Ltd (2022) (Pune-Trib); Malpani House of Stones (2017) (Raj); Gian Chand Labour Contractors (2008) (P&H); Indwell Constructions (1998) (AP)." Additional Gr. No. 2: "On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le transactions are done with the persons not having PAN, even the complete postal/ contact details of such persons were not made available by the assessee. Therefore, the AO arrived at the conclusion that the sale and purchase transactions of the assessee are doubtful. Learned AO further observed certain deformities in the cash balance shown by the assessee in his books of account as against in ITR filed for the assessment year 2016-17. Assessee's balance in the books of M/s Arshi Dal Mill, Bhatapara was found to be at Rs. 25,35,720/-, whereas the books of assessee had shown total debtors at Rs. 75,500/-, in explanation assessee admitted such anomaly, but have resorted to the excuse by stating that it was only a clerical mistake. Having privy to such defects and doubts, Ld. AO rejected the books of the assessee u/s 145(3) of the Act and treated the entire sale / purchase transactions as ingenuine and have concluded that the entire cash deposited by the assessee for Rs. 85,78,000/- in his bank account is nothing but unexplained cash credit of the assessee and added back the same to assessee's income u/s 68 of Act. 5. Further the cash of Rs. 2,00,000/- deposited by the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant including relevant judicial decisions in the matter. It is seen from the appellant's own submissions that the total annual turnover of the appellant is Rs. 93,17,434/- and sales of Rs 75,69,500/- have been made b/w 13/1 1/2016 to 16/12/2016 alone. This clearly raises doubts about a regular business of purchase and sale. The AO has also noted this fact on page 6 of the assessment order - "It is also surprising to note that the assessee has done the entire alleged business only during demonetization period without creating a single debtor. " 6.2.6 The AO had specifically asked for details of month wise stocks, sales and purchases along with details of cast) deposited, vide notice u/s 142(1) dated 04/09/2019, The details furnished by the appellant have been analysed in detail by the AO in the assessment order from Page 3 to 10. The discrepancies noted and the fact that the business was almost exclusively with sister concerns and that the Income Tax Inspector was not able to locate the parties even after physical address verification all point to the entire purchase and sales being a bundle of fictitious transactions. In view of the above, I uphold the assessment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not open upon the Ld. AO to rely upon the information emanating from the books of accounts to make the additions. 11. Ld. Sr. DR, Dr. Priyanka Patel, representing the revenue, on the other hand had reiterated the observations of Ld. AO, decision of the Ld. CIT(A) and vehemently supported their orders. 12. We have considered the rival submissions, perused the material available on record and case laws relied upon by the Ld. AR. On perusal of the judgment in the case of CIT vs. Bahubali Neminath Muttin (supra), it is revealed that in the said case the books were rejected u/s 145(3) by the Ld. AO and at the same time the addition on account of trade creditors, also for the purpose of arriving at a closing stock, books of accounts of the assessee were relied, whereas in present case, Ld. AO have not resorted to the estimation of profit of the assessee, also the books of account of the assessee are rejected, but the quantification of additions qua the cash deposits during the demonetization period was as per undisputed information available from the bank statement of the assessee. It can be safely concluded that the rejected books of accounts have never been relied upon by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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