9911796707
TMI Blog2025 (3) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter referred to as "AO"] under Section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as "the Act"]. Facts of the case: 2. The assessee, Ms. Bela Kirtikumar Nahta, an individual engaged in the business of jewellery manufacturing and trading under the proprietorship concern M/s Belu Jewellers, filed her return of income for the Assessment Year 2017-18 on 06/11/2017, declaring a total income of Rs. 10,83,000/-. The return was processed under Section 143(1) of the Act and subsequently selected for scrutiny under the Computer Aided Scrutiny Selection (CASS) due to significant cash deposits during the demonetization period (09/11/2016 to 31/12/2016). A notice under Section 143(2) of the Act was issued on 21/08/2018 and se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019, determining the total assessed income as Rs. 2,21,48,950/-. 3. Aggrieved by the additions, the assessee filed an appeal before the CIT(A). The CIT(A) accepted the submissions made by the assessee and found that the AO failed to acknowledge the documentary evidence submitted. The CIT(A) observed that several notices were not properly served, depriving the assessee of an opportunity to defend her case. It was further noted that the total cash deposits were Rs. 1,11,88,500/-, not Rs. 1,96,27,000/- and were duly reflected in the turnover disclosed in the P&L account. The CIT(A) deleted the addition under Section 68 and allowed the cost of improvement, holding that the assessment order was contrary to the principles of natural justice and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. ii. Copy of the cash book for period from 01/04/2016 to 31/03/2017. iii. Copies of the VAT returns. iv. Details of the cash sales during the FY 2016-17. 6.1. Therefore, as stated by the AR, the observation made by the AO to the effect that no reply/explanation has been furnished by the assessee is factually incorrect. 7. We have heard the submissions made by the DR for the Revenue and the AR for the assessee. We have also carefully perused the orders passed by the AO and the CIT(A) along with the documents placed on record. 7.1. We find merit in the submissions of the AR that all relevant details were furnished to the AO during the assessment proceedings. The CIT(A)'s order explicitly lists the documents submitted by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts during the demonetization period. However, the CIT(A) found that the AO's calculations were erroneous and included a fictitious deposit of Rs. 84,39,000/- in Nutan Nagrik Co-op Bank, which was not reflected in the bank statements. The actual deposits during the relevant period amounted to Rs. 1,11,88,500/-, as supported by the bank statements. The CIT(A) also observed that the opening cash balance of Rs. 1,20,33,505/- on 09/11/2016 was more than sufficient to cover the cash deposits made during the demonetization period. The cash deposits were consistent with the day-to- day cash sales recorded in the cash book. 7.5. The assessee had claimed Rs. 14,38,950/- as the cost of improvement for calculating STCG on the sale of an immovable prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd were subjected to statutory audit under Section 44AB of the Income Tax Act. The independent auditor's tax audit report certified that the books of accounts were complete and properly maintained, and all cash transactions were duly recorded. The AR rightly contended that the AO overlooked this key evidence and made arbitrary additions without rejecting the books of accounts under Section 145(3). The CIT(A) correctly observed that the AO's inclusion of a fictitious deposit of Rs. 84,39,000/- reflected a lack of diligence in verifying the facts. The actual cash deposits during the relevant period, totalling to Rs. 1,11,88,500/-, were corroborated by the bank statements and supported by the sales records. The cost of improvement of Rs. 14,38 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
