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TMI Blog2025 (5) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... e got the information regarding cash deposits in his bank accounts. Consequently, the case was selected for limited scrutiny under CASS (Computer Aided Scrutiny Selection) category to verify the huge cash deposits. As per second para of the order of the Ld.AO dated 24.12.2019, the assessee was found to have deposited Rs. 52,35,500/-. It was also noted that assessee had shown sales of Rs. 1,99,39,848/- as against receipt of Rs. 2,55,29,653/- in form 26AS. The Ld. AO show caused the assessee to explain the source of Rs. 52,35,500/- and difference of Rs. 55,89,805/-( Rs. 2,55,29,653/- minus Rs. 1,99,39,848/- ). There was no compliance from the assessee leading the Ld. AO to draw the conclusion of impugned differential amounts being unexplained. The Ld. AO made addition of impugned amounts. The Ld. AO had also invoked provisions of section 69A r.w.s. 115BBE of the act while making the impugned additions. The assessment order reveals that the Ld.AO had also recorded that the assessee had made payment of Rs. 36,93,132/- to one M/s. Sage Metal Ltd for Goods & Services. In the absence of any reply coming from the assessee, a presumption of the above hit by provisions of section 40A(3) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be concluded that there was no element of cash sales. As regards the issue of enhancement of addition on account of cash deposits, from Rs. 52,35,500/- to Rs. 57,25,500/-, we have noted that section 251(1)(a) empowers a CIT(A) to enhance the addition made by the Ld.AO, however, section 251(2) of the act mandates that while doing so he has to give a reasonable opportunity of being heard to the assessee. We have noted from order of the NFAC that no such opportunity was given. Accordingly, we have no hesitation in concurring with the arguments of the assessee. The enhancement made by the Ld.CIT(A) from Rs. 52,35,500/- to Rs. 57,25,500/- is therefore deleted and the ground of appeal No. 4 raised by the assessee is allowed. As regards the issue of addition of Rs. 52,35,500/- on account of unexplained cash deposits, as indicated above, the amounts seem to have a close nexus with sales of the assessee. 6.1 The Ld. AR also contested invocation of section 115BBE in its case. We are of the considered opinion that provisions of section 115BBE would not be applicable in this case. In this regard we draw strength from decision of Hon'ble madras High Court from its judgement dated 19/11/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal tender", there have been suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the Government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean so that not only the Government gets additional revenue for undertaking activities for the welfare of the poor but also the remaining part of the declared income legitimately comes into the formal economy. In this backdrop, an alternative Scheme namely, 'Taxation and Investment Regime for Pradhan MantriGaribKalyanYojana, 2016' (PMGKY) has been proposed in the Bill. The declarant under this regime shall be required to pay tax @ 30% of the undisclosed income, and penalty @10% of the undisclosed income. Further, a surcharge to be called 'Pradhan MantriGaribKalyan Cess' @33% of tax is also proposed to be levied. In addition to tax, surcharge and penalty (totaling to approximately 50%), the declarant shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the RBI under the 'Pradhan MantriGaribKalyan Deposit Scheme, 2016'. This amount is proposed to be utilised for the schemes of irrigation, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee drew our attention to para 5.1 & 5.2 of the Ld. NFAC order. It is the case of the assessee that it is regularly dealing in cash and that therefore no addition was liable to be made. The Ld. Counsel for the assessee drew our attention to another aspect of the case claiming it to be an incurable mistake which has vitiated the assessment order. It has been argued that this case was selected for limited scrutiny for the purpose of verifying cash deposits. The Ld. Counsel has argued that it was not legally permissible for the Ld.AO to have made addition on any other head without converting the case into a complete scrutiny case, an action which required written approval of concerned supervisory CIT. It has been argued that in the absence of the same no addition whatsoever was required to be made. On the issue of enhancement it was reiterated that the Ld. NFAC has not given any opportunity of being heard before making the impugned enhancement available u/s 251(2) of the act. The assessee has also placed on record a paper book to substantiate its claim. 8.0 The Ld. DR argued in favour of the lower authorities. 9.0 We have heard rival submissions in the light of material ..... X X X X Extracts X X X X X X X X Extracts X X X X
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