Cash deposit during demonetization: Addition of Cash sales as unexplained deleted by Raipur ITAT
Here is an interesting case wherein judgment was delivered in favour of the Assessee in respect of Cash deposit during demonetization & Addition of Cash sales as unexplained was done by the Assessing Officer. The same is now deleted by Raipur ITAT.
The case details is as under:
आयकर अपीलय अधकरण यायपीठ रायपर
IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR
BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER
AND
SHRI ARUN KHODPIA, ACCOUNTANT MEMBER
आयकर अपील सं. / ITA No. 82/RPR/2017 CO. No. 02/RPR/2022
नधारण वष / Assessment Year : 2008-09
The Income Tax Officer-1, Raigarh (C.G.)
…….अपीलाथ / Appellant बनाम /
V/s. Shri Parmanand Gupta, Alochan Agrawal,
L/h. of Late Shri Parmanand Gupta,
Prop. M/s. Balaji Handloom, 19/48, Palace Road,
Raigarh (C.G.)
PAN : AFDPG4961L
……यथ / Respondent
Assessee by :Shri R.B Doshi, AR
Revenue by :Shri Sanjay Kumar, Sr. DR सनवाईकतारख /
Date of Hearing : 26.07.2022 घोषणाकतारख /
Date of Pronouncement : 04.08.2022
The present appeal was filed by the department against the order of the CIT (A) on following grounds of appeal:
- Whether on the facts and circumstance of the case and on the points of the law Ld. CIT(A) was justified in deleting the addition of Rs.5,22,81,663/- made by the AO on account of unexplained cash deposits in the various bank accounts of the assessee ?
- Whether on the facts and circumstances of the case and on the points of the law Ld. CIT(A) was justified in concluding that addition of Rs. Rs.5.228 Crores was part of turnover of the assessee, as against the finding of the AO that the assessee has failed to provide names and address of the parties who had purchased yarn from him, thereby the assessee not being able to establish the genuineness and authenticity of the transactions of cash deposits in its various bank accounts?
- Whether on the facts and circumstances of the case and on the points of the law Ld. CIT(A) was justified in concluding that cash deposits in the bank accounts of the assessee represents the sale proceeds from various sundry debtors, as against the findings of the AO that the assessee has failed to establish the genuineness and authenticity of the cash deposits in the bank accounts of the assessee in spite of several opportunities?
- Whether on the points of law and on facts and circumstances of the case, the Ld. CIT(A) has erred by giving a finding which is contradictory to the evidence on the record, as the Ld. CIT(A) has accepted the submission of the assessee that the alleged unexplained cash deposits in the bank accounts of the assessee are part of the assessee’s turnover, which is factually incorrect, thereby rendering the decision, which is perverse?
- Whether the Ld. CIT(A) has erred in law by holding the decision in favour of the assessee and against the revenue, though there is no nexus between the conclusion of the fact and primary fact upon which that conclusion is based?
- Whether the Ld. CIT(A) has erred in law in drawing a conclusion which cannot be drawn by any reasonable person or authority, on the material and facts placed before it?
- The order of the Ld. CIT(A) is erroneous both in law and on facts.
- Any other ground that may be adduced at the time of hearing of appeal?
Addition of cash deposited during demonetisation is one of the most feature of assessment of that period.
The court here observed as under:
“After having given a thoughtful consideration to the aforesaid observation of the CIT(Appeals), we find no reason to take a different view. At this stage, we may herein observe that it is a matter of fact borne from record that the assessee had duly accounted for the aforesaid amount of Rs.5,22,81,663/- as his sale proceeds for the year under consideration. As observed by the CIT(Appeals), it is a matter of fact borne from record that the assessee had imported silk yarn from China, which, thereafter, had been sold to the various weavers etc. who were spread across the country. Although the A.O had dubbed the aforesaid amount of Rs.5,22,81,663/- as unexplained cash credits u/s.68 of the Act, however, we find that at the same time he had accepted the sales as were duly accounted by the assessee in his books of account. In sum and substance, though the A.O had on the one hand accepted that the amounts in question were the sale proceeds that stood credited in the books of account of the assessee and had brought the profit resulting therefrom as disclosed by the assessee to tax in his hand, but at the same time had held the said amounts as unexplained cash credits within the meaning of section 68 of the Act. Apart from that, the re-characterization of the duly accounted sales of the assessee which were earlier accepted by the AO in the original assessment that was framed by him vide his order passed under Sec. 143(3), dated 18.06.2010, without rejecting his books of accounts under Sec. 145(3) of the Act is beyond comprehension. In sum and substance, the recharacterisation of the duly accounted cash sales of the assessee as unexplained cash credits u/s 68 by the AO without rejection of the books of account of the assessee u/s 145(3) of the Act is beyond comprehension. As stated by the ld. AR, and rightly so, the acceptance of the cash sales as disclosed by the assessee a/w simultaneous re-characterization of the same as unexplained cash credits u/s 68 had clearly subjected the assessee to a double tax jeopardy.”
Raipur ITAT - Rs. 5 Cr addition of sales new
