SAJAL NEMA ,NARSINGHPUR vs PRINCIPAL COMMISSIONER OF INCOME TAX 1 JABALPUR, JABALPUR

Income Tax Appellate Tribunal, BENCH “DB” JABALPUR

Before: SHRI OM PRAKASH KANT & SHRI PAVAN KUMAR GADALE

For Appellant: Mr. Dhiraj Ghai, FCA

For Respondent: Mr. Saad Kidwai, DR

Hearing: 22/09/2023Pronounced: 20/10/2023

This appeal by the assessee is directed against order dated 18.01.2022 passed by the Ld. Pr. Commissioner of Income-tax-1, Jabalpur (in short ‘the Ld. PCIT’) for assessment year 2017-18 u/s 263 of the Income-tax Act, 1961 (in short ‘the Act’) setting aside the order of the Assessing Officer , which was passed u/s 143(3) of the Act on 9.12.2019.

2. The assessee has raised many grounds challenging this revision order mainly that sufficient inquiry were made by the Sajal Nema 2 ITA No.247/JAB/2022 Assessing Officer on the issue of cash depos Assessing Officer on the issue of cash deposits. The relevant its. The relevant grounds raised by the assessee are reproduced as under: grounds raised by the assessee are reproduced as under: grounds raised by the assessee are reproduced as under:

1. On the facts and circumstances of the case, the order passed by the On the facts and circumstances of the case, the order passed by the On the facts and circumstances of the case, the order passed by the learned Principal Commissioner of Income Tax (Pr. CIT) under Section learned Principal Commissioner of Income Tax (Pr. CIT) under Section learned Principal Commissioner of Income Tax (Pr. CIT) under Section 263 of the Act is bad, both in the eyes of 263 of the Act is bad, both in the eyes of law and on facts.

2. On the facts and circumstances of the case, the order passed by the On the facts and circumstances of the case, the order passed by the On the facts and circumstances of the case, the order passed by the learned Pr. CIT under Section 263 of the Act is bad, both in the eyes of learned Pr. CIT under Section 263 of the Act is bad, both in the eyes of learned Pr. CIT under Section 263 of the Act is bad, both in the eyes of law and on facts, having been passed without giving assessee an law and on facts, having been passed without giving assessee an law and on facts, having been passed without giving assessee an opportunity of being heard on opportunity of being heard on adverse opinion drawn from the reply adverse opinion drawn from the reply submitted to notice submitted to notice under section 263 in violation of principle of natural violation of principle of natural justice. 3. On the facts and circumstances of the case, the learned On the facts and circumstances of the case, the learned Pr.CIT has On the facts and circumstances of the case, the learned erred both on facts and in law erred both on facts and in law assuming jurisdiction under secti assuming jurisdiction under section 263 in the absence of twin conditions of the order passed by the in the absence of twin conditions of the order passed by the in the absence of twin conditions of the order passed by the A.O. being erroneous as well as prejudicial to the interest of the Revenue, being well as prejudicial to the interest of the Revenue, being well as prejudicial to the interest of the Revenue, being satisfied. 4. On the facts and circumstances of the case, the order passed by the On the facts and circumstances of the case, the order passed by the On the facts and circumstances of the case, the order passed by the learned Pr.CIT Pr.CIT assuming jurisdiction under section 263 is bad in law jurisdiction under section 263 is bad in law having been initiated initiated at the instance of audit objection only instance of audit objection only and merely on presumption presumption and assumptions. 5. On the facts and circumstances of the case, the learned On the facts and circumstances of the case, the learned Pr.CIT has On the facts and circumstances of the case, the learned erred both on facts and in law in erred both on facts and in law in ignoring the fact that the issue raised ignoring the fact that the issue raised by her in notice under Section 263 was before the A.O. and as such the by her in notice under Section 263 was before the A.O. and as such the by her in notice under Section 263 was before the A.O. and as such the jurisdiction on this issue under Section 263 cannot be assumed by him. jurisdiction on this issue under Section 263 cannot be assumed by him. jurisdiction on this issue under Section 263 cannot be assumed by him. 6. On the facts and circumstances of the case, the learned On the facts and circumstances of the case, the learned Pr.CIT has On the facts and circumstances of the case, the learned erred both on facts and in d both on facts and in law in ignoring the fact that the proceeding law in ignoring the fact that the proceeding under Section 263 cannot be used for substituting opinion of the A.O. by Section 263 cannot be used for substituting opinion of the A.O. by Section 263 cannot be used for substituting opinion of the A.O. by that of the PCIT. that of the PCIT. 7. On the facts and circumstances of the case, the order passed by Pr. On the facts and circumstances of the case, the order passed by Pr. On the facts and circumstances of the case, the order passed by Pr. CIT under section 263 of t CIT under section 263 of the Income Tax Act is unsustainable as power unsustainable as power to revise can be invoked in the case of lack of enquiry, not in the case of to revise can be invoked in the case of lack of enquiry, not in the case of to revise can be invoked in the case of lack of enquiry, not in the case of inadequate enquiry. inadequate enquiry. 8. On the facts and circumstances of the case, the learned Pr. On the facts and circumstances of the case, the learned Pr. CIT has On the facts and circumstances of the case, the learned Pr. erred both on facts and in law in setting erred both on facts and in law in setting aside the matter to the file of aside the matter to the file of the AO without giving a finding as to the error and prejudice caused to the AO without giving a finding as to the error and prejudice caused to the AO without giving a finding as to the error and prejudice caused to the revenue by the assessment order, and as such the order passed is the revenue by the assessment order, and as such the order passed is the revenue by the assessment order, and as such the order passed is bad in law and liable to be quashed. bad in law and liable to be quashed. 9. On the circumstances of the case, Pr CIT ha circumstances of the case, Pr CIT has erred both on facts and s erred both on facts and in law in setting aside the issue of cash deposition in law in setting aside the issue of cash deposition in law in setting aside the issue of cash deposition during demonetization period to the file of the Ld AO demonetization period to the file of the Ld AO without without properly appreciating the the explanation of assessee given during the assessment during the assessment

Sajal Nema 3 ITA No.247/JAB/2022 proceedings brought on record to prov proceedings brought on record to prove source of cash in hand available source of cash in hand available including that of cash including that of cash withdrawal on 8/12/16 itself.

10. Considering the fact that the assessment order dated Considering the fact that the assessment order dated 19/12/19 19/12/19 is not erroneous so far so far as prejudicial to the interest of revenue hence the prejudicial to the interest of revenue hence the ld Pr. CIT-was not justif was not justified in initiating revision proceeding by issuing proceeding by issuing show cause notice on 15/7/21. show cause notice on 15/7/21.

11.

The revision order dated 18/01/2022 is bad in law for other The revision order dated 18/01/2022 is bad in law for other The revision order dated 18/01/2022 is bad in law for other reasons also hence reasons also hence may kindly be cancelled.

Briefly stated facts of the case are that the return of income Briefly stated facts of the case are that the return of income Briefly stated facts of the case are that the return of income filed by the assessee was selected for scrutiny on two grounds. One filed by the assessee was selected for scrutiny on two grounds filed by the assessee was selected for scrutiny on two grounds of the ground was for verification of the ground was for verification of the undisclosed income for cash of the undisclosed income for cash deposits during demonetization deposits during demonetization of currency notes of Rs. 500/ of currency notes of Rs. 500/- and Rs. 1000/-by the Reserve Bank of India. by the Reserve Bank of India. The Assessi The Assessing Officer completed the assessment u/s 143(3) of the Act on 19.12.2019 after completed the assessment u/s 143(3) of the Act on 19.12.2019 after completed the assessment u/s 143(3) of the Act on 19.12.2019 after accepting the explanation of the assessee regarding source of the accepting the explanation of the assessee regarding source of the accepting the explanation of the assessee regarding source of the cash deposits. Subsequently, the Ld. PCIT called for record and cash deposits. Subsequently, the Ld. PCIT called for record and cash deposits. Subsequently, the Ld. PCIT called for record and after examination the same after examination the same, issued show cause no issued show cause notice to the assessee as why the order passed by the Assessing Officer might assessee as why the order passed by the Assessing Officer assessee as why the order passed by the Assessing Officer not be held as erroneous in so far as prejudicial to the interest of ld as erroneous in so far as prejudicial to the interest of ld as erroneous in so far as prejudicial to the interest of the Revenue. After considering the submission of the assessee, the the Revenue. After considering the submission of the assessee the Revenue. After considering the submission of the assessee Ld. PCIT invoked Explanation Ld. PCIT invoked Explanation -2 below section 263 of the Act n 263 of the Act holding that the Assessing Officer has not holding that the Assessing Officer has not carried out the inquiry carried out the inquiry which sould have been carried out in the facts and circumstances ould have been carried out in the facts and circumstances ould have been carried out in the facts and circumstances of the case and set aside the order of the Assessing Officer for de of the case and set aside the order of the Assessing Officer for de of the case and set aside the order of the Assessing Officer for de novo consideration by the Assessing Off novo consideration by the Assessing Officer and pass a fresh icer and pass a fresh assessment order. The finding of the Ld. PCIT is reproduced as assessment order. The finding of the Ld. PCIT is reproduced as assessment order. The finding of the Ld. PCIT is reproduced as under:

Sajal Nema 4 ITA No.247/JAB/2022 “9. I have considered the written submission of the assessee and have 9. I have considered the written submission of the assessee and have 9. I have considered the written submission of the assessee and have perused the documents available on records. On perusal of the written perused the documents available on records. On perusal of the written perused the documents available on records. On perusal of the written submission of the assess submission of the assessee and on examination of records, it is seen ee and on examination of records, it is seen that during the course of assessment proceedings, the A.O. has that during the course of assessment proceedings, the A.O. has that during the course of assessment proceedings, the A.O. has enquired about the cash deposits in Bank during the F.Yr. 2015 enquired about the cash deposits in Bank during the F.Yr. 2015 enquired about the cash deposits in Bank during the F.Yr. 2015-2016 and F.Yr. 2016 and F.Yr. 2016-2017 vide notice under section 142(1) dated 2017 vide notice under section 142(1) dated 04/10/2019, the said 04/10/2019, the said information was sought for in certain predefined information was sought for in certain predefined formats wherein it was specifically asked to provide the details of "Total formats wherein it was specifically asked to provide the details of "Total formats wherein it was specifically asked to provide the details of "Total cash deposit in Bank from 01/04/2016 to 08/11/2016 & Total cash cash deposit in Bank from 01/04/2016 to 08/11/2016 & Total cash cash deposit in Bank from 01/04/2016 to 08/11/2016 & Total cash deposit in Bank from 09/11/2016 to 31/12/2016 in column number (b) deposit in Bank from 09/11/2016 to 31/12/2016 in column number (b) deposit in Bank from 09/11/2016 to 31/12/2016 in column number (b) & (c) of point number 1.2 of table number 1 respectively". (c) of point number 1.2 of table number 1 respectively". It is worthwhile to mention here that the information sought for about It is worthwhile to mention here that the information sought for about It is worthwhile to mention here that the information sought for about total cash deposit during the period mentioned therein irrespective to total cash deposit during the period mentioned therein irrespective to total cash deposit during the period mentioned therein irrespective to the cash available/cash available/cash-in-hand consisting of / sourced from sales or from sales or sourced from receipts of sundry creditors or even from the customers sourced from receipts of sundry creditors or even from the customers sourced from receipts of sundry creditors or even from the customers being advance in cash, whatever the source it may be. In the said table, being advance in cash, whatever the source it may be. In the said table, being advance in cash, whatever the source it may be. In the said table, the A.O. nowhere restricted to the assessee to furnish the desired the A.O. nowhere restricted to the assessee to furnish the desired the A.O. nowhere restricted to the assessee to furnish the desired details of total cash deposit aft details of total cash deposit after excluding the cash received from er excluding the cash received from sundry creditors and advance received from the customer in cash. sundry creditors and advance received from the customer in cash. sundry creditors and advance received from the customer in cash. In continuation to the above, the assessee failed to furnish the true and In continuation to the above, the assessee failed to furnish the true and In continuation to the above, the assessee failed to furnish the true and correct information of cash deposit during demonetization period correct information of cash deposit during demonetization period correct information of cash deposit during demonetization period because the simp because the simple question was asked wherever applicable either in le question was asked wherever applicable either in ITR or in response form) that the quantum of cash deposit during ITR or in response form) that the quantum of cash deposit during ITR or in response form) that the quantum of cash deposit during demonetization period irrespective to the cash deposit in old currency or demonetization period irrespective to the cash deposit in old currency or demonetization period irrespective to the cash deposit in old currency or in new/valid currency, the said information was called for withou in new/valid currency, the said information was called for withou in new/valid currency, the said information was called for without any categorization.

10.

In the light of the aforesaid facts and circumstances of the case and 10. In the light of the aforesaid facts and circumstances of the case and 10. In the light of the aforesaid facts and circumstances of the case and legal findings, as the Assessing Officer has failed to make enquiries as legal findings, as the Assessing Officer has failed to make enquiries as legal findings, as the Assessing Officer has failed to make enquiries as well as apply his mind and proper application of law, it is held that the well as apply his mind and proper application of law, it is held that the well as apply his mind and proper application of law, it is held that the assessment order passed u/s 143(3) of the Income Tax Act, 1961 on assessment order passed u/s 143(3) of the Income Tax Act, 1961 on der passed u/s 143(3) of the Income Tax Act, 1961 on 19/12/2019 is erroneous in so far as it is prejudicial to the interest of 19/12/2019 is erroneous in so far as it is prejudicial to the interest of 19/12/2019 is erroneous in so far as it is prejudicial to the interest of revenue. Accordingly, the said order is SET ASIDE FOR DE revenue. Accordingly, the said order is SET ASIDE FOR DE revenue. Accordingly, the said order is SET ASIDE FOR DE-NOVO CONSIDERATION, with the direction to the Assessing Officer to pass CONSIDERATION, with the direction to the Assessing Officer to pass CONSIDERATION, with the direction to the Assessing Officer to pass a fresh Assessment Order. The A.O. is further directed to pass a suitable fresh Assessment Order. The A.O. is further directed to pass a suitable fresh Assessment Order. The A.O. is further directed to pass a suitable order by making proper investigation and enquiries and applying the order by making proper investigation and enquiries and applying the order by making proper investigation and enquiries and applying the correct provisions of the Act, after giving adequate opportunities of being correct provisions of the Act, after giving adequate opportunities of being correct provisions of the Act, after giving adequate opportunities of being heard to the assessee. heard to the assessee. The assessment The assessment order is accordingly set-aside with the above aside with the above directions.”

We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The Ld. PCIT dispute and perused the relevant material on record. The L dispute and perused the relevant material on record. The L has invoked Explanation has invoked Explanation-2 to section 263 of the Act. A Act. According to said explanation if the Assessing Officer has not carried out the if the Assessing Officer has not carried out the if the Assessing Officer has not carried out the Sajal Nema 5 ITA No.247/JAB/2022 inquiry which ought to have been carried out in the facts and inquiry which ought to have been carried out in the facts and inquiry which ought to have been carried out in the facts and circumstances of the case, the assessment order is deemed to be circumstances of the case, the assessment order is deemed to be circumstances of the case, the assessment order is deemed to be erroneous in so far as prejudicial to the interest of the Revenue. But erroneous in so far as prejudicial to the interest of the Revenu erroneous in so far as prejudicial to the interest of the Revenu we find in the case of the assessee, the Ld. Assessing Officer issued we find in the case of the assessee, the Ld. Assessing Officer issued we find in the case of the assessee, the Ld. Assessing Officer issued query letter u/s 142(1) of the Act on 30.08.2019 wherein he raised query letter u/s 142(1) of the Act on 30.08.2019 wherein he query letter u/s 142(1) of the Act on 30.08.2019 wherein he specific query regarding the source of specific query regarding the source of the cash deposits the cash deposits. The copy of the relevant query available on page the relevant query available on page 78 of paper book of paper book is reproduced as under:

17. Please furnish the detail of cash deposit during demonetisation 17. Please furnish the detail of cash deposit during demonetisation 17. Please furnish the detail of cash deposit during demonetisation period i.e. 08/11/2016 to 31/12/2016. Source of money be period i.e. 08/11/2016 to 31/12/2016. Source of money be period i.e. 08/11/2016 to 31/12/2016. Source of money be provided, copy of bank account also be furnished. Also furnish the provided, copy of bank account also be furnished. Also furnish the provided, copy of bank account also be furnished. Also furnish the reason for large value of reason for large value of cash deposit during demonetisation period cash deposit during demonetisation period as compared to average rate of c as compared to average rate of cash deposit during pre ash deposit during pre- demonetization period. ation period.

4.1 Further, the assessee responded the said query, a copy of Further, the assessee responded the said query, a copy of Further, the assessee responded the said query, a copy of which is available on page 81 of the Paper Book which is available on page 81 of the Paper Book. For ready reference . For ready reference same is reproduced as under: is reproduced as under:

17. The details of cash deposit along with copy of relevant The details of cash deposit along with copy of relevant The details of cash deposit along with copy of relevant bank bank bank account account account in in in which which which cash cash cash was was was deposited deposited deposited during during during demonetization period i.e. 08/11/2016 to 31/12/2016 is demonetization period i.e. 08/11/2016 to 31/12/2016 is demonetization period i.e. 08/11/2016 to 31/12/2016 is enclosed herewith as page no. 70 & enclosed herewith as page no. 70 & 100 to 109 of this reply. 100 to 109 of this reply. The total deposits under relevance was from cash balance in The total deposits under relevance was from cash balance in The total deposits under relevance was from cash balance in hand as on 07/11/2016. That there was no large value of hand as on 07/11/2016. That there was no large value of hand as on 07/11/2016. That there was no large value of cash deposit during demonetization period as compared to cash deposit during demonetization period as compared to cash deposit during demonetization period as compared to average rate of cash deposit during pre average rate of cash deposit during pre-demonetization demonetization period.

4.2 Further, the Assessing Officer also asked the detail of the Further, the Assessing Officer also asked the detail of the Further, the Assessing Officer also asked the detail of the position of the stock, , sales bills and reason for increase in the sales sales bills and reason for increase in the sales as compared to the financial year 2015 as compared to the financial year 2015-16 and 2016 16 and 2016-17. A copy of Sajal Nema 6 ITA No.247/JAB/2022 the said query raised, raised, available on PB-234 ,is reproduced for ready reproduced for ready reference:

1. Please furnish position of stock monthwise from 01.04.2016 1. Please furnish position of stock monthwise from 01.04.2016 1. Please furnish position of stock monthwise from 01.04.2016 to 31.03.2017. to 31.03.2017.

2. Please furnish copy of all the sale bills of month of october 2. Please furnish copy of all the sale bills of month of october 2. Please furnish copy of all the sale bills of month of october 2016. 3. Please furnish reason for increase in sales in comparison to 3. Please furnish reason for increase in sales in comparison to 3. Please furnish reason for increase in sales in comparison to FY 2015-16 to 2016 to 2016-17. 4.3 The assessee duly responded The assessee duly responded above queries raised by the queries raised by the Assessing Officer, details details of which are available on paper book paper book page 235 to 237. For ready reference For ready reference, the said reply filed by the assessee the said reply filed by the assessee is reproduced as under: is reproduced as under:

Subject - Reply to no Reply to notice under section 142(1) of Income tice under section 142(1) of Income Tax Act, 1961 dated 09/11/2019 Tax Act, 1961 dated 09/11/2019 In context to above subject please find para wise reply as In context to above subject please find para wise reply as In context to above subject please find para wise reply as under:-

1. 1. That stock position for the financial year 2016 That stock position for the financial year 2016-17 That stock position for the financial year 2016 monthly basis is enclosed as Page no. 4 of this reply. monthly basis is enclosed as Page no. 4 of this reply. monthly basis is enclosed as Page no. 4 of this reply. 2.

2. Copy of sale 2. Copy of sale bill of month of October 2016 is enclosed bill of month of October 2016 is enclosed herewith as Annexure herewith as Annexure 1 to 16 of this reply.

3. That sales for financial year 2014 That sales for financial year 2014-15, 2015-16, 2016 16, 2016- 17, 2017 17, 2017-18 and 2018-19 was as under:- Year Sales QTY Gold Average Gold QTY Silver QTY Silver Average Rate Silver Rate 2014-15 2,74,03,582.00 2,74,03,582.00 8,343.231 2903.26 43,265.855 43,265.855 39.99 2015-16 5,80,54,665.49 5,80,54,665.49 23,164.500 2171.42 1,26,483.098 1,26,483.098 38.25 2016-17 9,42,02,857.92 9,42,02,857.92 29,286.789 3068.20 96,504.883 96,504.883 44.48 2017-18 17,73,85,786.20 17,73,85,786.20 57,402.021 2958.53 1,72,401.760 1,72,401.760 41.04 2018-19 18,97,86,201.72 18,97,86,201.72 55,147.671 3295.88 186017.110 186017.110 40.93 From the above chart it is apparent that the assessee firm is From the above chart it is apparent that the assessee firm is From the above chart it is apparent that the assessee firm is regularly increasing its sale year by year and not only in regularly increasing its sale year by year and not only in regularly increasing its sale year by year and not only in financial year 2016 financial year 2016-17 only. However as far as financial year 17 only. However as far as financial year 2015-16 and 2016 16 and 2016-17 are concern the reason for increasing 17 are concern the reason for increasing sale was on two sale was on two accounts viz

Sajal Nema 7 ITA No.247/JAB/2022

Rates of Gold has increased from Rs. 2171/42 in 2015 Rates of Gold has increased from Rs. 2171/42 in 2015- Rates of Gold has increased from Rs. 2171/42 in 2015 16 to Rs. 3068/20 in 2016 16 to Rs. 3068/20 in 2016-17 and silver of Rs. 38/25 17 and silver of Rs. 38/25 in 2015 in 2015-16 to Rs. 44/48 in2016-17. Accordingly there 17. Accordingly there was almost 41.30% of increase in gold rates and was almost 41.30% of increase in gold rates and was almost 41.30% of increase in gold rates and 16.28% of increase in silver rates. 16.28% of increase in silver rates. Henceforth the Henceforth the reason for increase in sales is increase in rates of gold reason for increase in sales is increase in rates of gold reason for increase in sales is increase in rates of gold and silver. and silver.

That the assessee business is continuously growing That the assessee business is continuously growing That the assessee business is continuously growing from assessment year 2014 from assessment year 2014-15 to 2019-20 on account 20 on account of of of good good good quality quality quality and and and range range range available available available in in in shop. shop. shop. Accordingly the profit Accordingly the profit earn by assessee and tax paid earn by assessee and tax paid thereupon has increased manifolds as per details thereupon has increased manifolds as per details thereupon has increased manifolds as per details below:- - Year Profit Earned Tax Paid Returned Income Returned Income 18,25,500.00 2014-15 26,89,129.22 3,83,829.00 18,25,500.00 1,48,04,203.00 2015-16 2,11,45,934.78 52,18,619.00 1,48,04,203.00 1,27,67,214.00 2016-17 1,36,08,588.94 44,17,424.00 1,27,67,214.00 1,55,77,461.00 2017-18 1,65,46,449.40 54,46,613.00 1,55,77,461.00 1,48,04,203.00 2018-19 1,58,38,365.89 52,18,619.00 1,48,04,203.00 3. From the explanation given in para From the explanation given in para 1 and 2 above it is 1 and 2 above it is clear that the assessee sale in 2015 clear that the assessee sale in 2015-16 and 2016 16 and 2016-17 has increased on account of increase in rates followed has increased on account of increase in rates followed has increased on account of increase in rates followed by increase in number of customers due to good quality by increase in number of customers due to good quality by increase in number of customers due to good quality products in shop. Even the profit for financial year products in shop. Even the profit for financial year products in shop. Even the profit for financial year 2015-16 was more tha 16 was more than 2016-17 henceforth no adverse 17 henceforth no adverse view may kindly be taken. view may kindly be taken. We hope above reply will satisfy your good self and in We hope above reply will satisfy your good self and in We hope above reply will satisfy your good self and in case if any further information is required the same case if any further information is required the same case if any further information is required the same may kindly be informed for onward submission.” may kindly be informed for onward submission. may kindly be informed for onward submission. 4.4 Further, the Assessing Officer also ask Further, the Assessing Officer also asked the details of the ed the details of the percentage increase in percentage increase in cash deposits and comparison of the sales cash deposits and comparison of the sales and cash deposits with the earlier years. The reply filed by the and cash deposits with the earlier years. The reply filed by the and cash deposits with the earlier years. The reply filed by the assessee is available on page 2 assessee is available on page 242 and 244 of the Paper Book. The and 244 of the Paper Book. The relevant details are reproduced as unde relevant details are reproduced as under:

“1. Detail of cash deposit in bank is ad under : Detail of cash deposit in bank is ad under :-

Details of Cash Deposit in Bank Jalgaon Jewellers 1.1 (a) Total cash deposits in Bank in F.Y. 2015 (a) Total cash deposits in Bank in F.Y. 2015-16 4,63,11,910/- (b) Total cash deposits in Bank from 01.04.2015 to 2,30,55,900/- (b) Total cash deposits in Bank from 01.04.2015 to (b) Total cash deposits in Bank from 01.04.2015 to Sajal Nema 8 ITA No.247/JAB/2022

08.11.2015 08.11.2015 (c) Total cash deposit in Bank from 09.11.2015 to 1,05,02,000/- (c) Total cash deposit in Bank from 09.11.2015 to (c) Total cash deposit in Bank from 09.11.2015 to 31.12.2015 31.12.2015 1.2 (a) Total cash deposits in Bank in F.Y. 2016 (a) Total cash deposits in Bank in F.Y. 2016-17 5,89,41,850/- (b) Total cash deposits in Bank from 01.04.2016 to 2,53,10,350/- (b) Total cash deposits in Bank from 01.04.2016 to (b) Total cash deposits in Bank from 01.04.2016 to 08.11.2016 08.11.2016 (c) Total cash deposit in Bank (c) Total cash deposit in Bank from 09.11.2016 to from 09.11.2016 to 1,29,80,000/- 31.12.2016 31.12.2016 1.3 (a) Percentage increase between 12(a) and 1.1(a) (a) Percentage increase between 12(a) and 1.1(a) 27.27% (b) Percentage increase between 1.2(b) and 1.1(b) (b) Percentage increase between 1.2(b) and 1.1(b) 9.78% (c) Percentage increase between 1.2(c) and 1.1(c) (c) Percentage increase between 1.2(c) and 1.1(c) 23.59

2. Details of Cash Sales is Details of Cash Sales is as under:-

Details of Cash Deposit in Bank 2.1 (a) Total cash sales in F.Y. 2015 (a) Total cash sales in F.Y. 2015-16 3,14,79,738/- (b) Total cash sales from 01.04.2015 to (b) Total cash sales from 01.04.2015 to 2,16,22,493/- 08.11.2015 08.11.2015 2.2 (a) Total cash sales in E.Y. 2016 (a) Total cash sales in E.Y. 2016-17 7,53,74,277/- (b) Total cash sales from (b) Total cash sales from 01.04.2016 to 4,69,51,488/- 08.11.2016 08.11.2016 2.3 (a) Percentage increase between 2.2(a) and (a) Percentage increase between 2.2(a) and 139.44% 2.1(a) (b) Percentage increase between 2.2(b) and (b) Percentage increase between 2.2(b) and 117.14% 2.1(b)

3. Analysis of month wise cash sales and cash deposits from 01.04.2015 3. Analysis of month wise cash sales and cash deposits from 01.04.2015 3. Analysis of month wise cash sales and cash deposits from 01.04.2015 to 08.11.2015 is as to 08.11.2015 is as under:

Month Wise Op. Op. Cash Cash in Cash Sales in Cash Cash Cash Closing hand deposited withdrawal withdrawal cash on in Bank from from the the hand bank bank April, 2015 5,30,441/ 5,30,441/ 56,37,611/ 59,74,700/ 10,40,000/ 10,40,000/ 32,93,562/ May, 2015 32,93,562/ 32,93,562/ 26,66,990/ 45,49,900/ 0/- 16,01,281/ June, 2015 16,01,281/ 16,01,281/ 27,14,980/ 18,46,400/ 23,55,000/ 23,55,000/ 32,14,287/ July, 2015 32,14,287/ 32,14,287/ 11,69,715/ 27,39,900/ 15,50,000/ 15,50,000/ 35,02,965/ August, 35,02,965/ 35,02,965/ 47,23,320/ 28,50,000/ 25,000/ 25,000/ 5,391,469/ 2015 September, 53,91,469/ 53,91,469/ 22,94,780/ 40,20,000/ 4,78,000/ 4,78,000/ 34,75,478/ 2015 October, 34,75,478/ 34,75,478/ 6,06,632/ 7,10,000/- 19,20,000/ 19,20,000/ 51,55,420/ 2015 November 51,55,420/ 51,55,420/- 18,08,465/- 3,65,000/- 15,66,000/- 15,66,000/ 63,56,420/-

Sajal Nema 9 ITA No.247/JAB/2022 till 08.11.2015 4. Analysis of month wise cash sales and cash deposits from 01.04.2016 4. Analysis of month wise cash sales and cash deposits from 01.04.2016 4. Analysis of month wise cash sales and cash deposits from 01.04.2016 to 08.11.2016 is as to 08.11.2016 is as under:

Month Wise Op. Op. Cash Cash in in Cash Sales Cash Cash Cash Closing cash hand deposited in withdrawal withdrawal on hand Bank from from the the bank bank April, 2016 5,07,074/- 5,07,074/ 15,04,890/- 6,40,000/- 10,19,701/- 10,19,701/ 18,93,228/- 2,24,235.09 May, 2016 18,93,228/- 18,93,228/ 38,62,765/- 44,99,350/- 0/- 20,445/- June, 2016 10,26,557/- 10,26,557/ 35,52,016/- 3,20,000/- 13,85,000/- 13,85,000/ 17,16,076/- July, 2016 17,16,076/- 17,16,076/ 34,00,835/- 1,31,800/- 11,10,000/- 11,10,000/ 42,42,683/- August, 2016 42,42,683/- 42,42,683/ 26,67,832/- 2,36,000/- 1,50,000/- 1,50,000/ 50,50,160/- September, 50,50,160/- 50,50,160/ 44,77,155/- 61,28,200/- 1,70,000/- 1,70,000/ 9,66,454/- 2016 October, 9,66,454/- 9,66,454/ 2,55,72,270/- 1,01,20,000/- 0/- 1,40,30,062/- 2016 November till 1,40,30,062/- 1,40,30,062/ 19,13,685/- 32,35,000/- 4,30,000/- 4,30,000/ 1,12,25,062/- 08.11.2016 4.5 On verification of the details filed for explanation of cash of the details filed for explanation of cash deposits, we find that the assessee , we find that the assessee was regularly showing the cash regularly showing the cash deposits and even it has shown substantial sales in pre deposits and even it has shown substantial sales deposits and even it has shown substantial sales demonetization period. Further the assessee has filed a detail of the demonetization period. Further the assessee has filed a detail of the demonetization period. Further the assessee has filed a detail of the amount which was was deposited in the new currency notes. The the new currency notes. The relevant details filed by the assessee are reproduced as under: relevant details filed by the assessee are reproduced as under: relevant details filed by the assessee are reproduced as under:

Sajal Nema 10 ITA No.247/JAB/2022 4.6 In view of the above questionnaire In view of the above questionnaires and the replies s and the replies filed by the assessee, we are of the opinion that the Assessing Officer has made assessee, we are of the opinion that the Assessing Officer has made assessee, we are of the opinion that the Assessing Officer has made the inquiry on the issue of cash deposit on the issue of cash deposit, which ought to have made ought to have made in the case of the assessee. Therefore, the Explanation-2 to section in the case of the assessee. Therefore, the Explanation in the case of the assessee. Therefore, the Explanation 263 of the Act invoked by the Ld. PCIT is not justified. In the facts 263 of the Act invoked by the Ld. PCIT is not justified. In the facts 263 of the Act invoked by the Ld. PCIT is not justified. In the facts and circumstances of the case, we set aside the order of the Ld. and circumstances of the case, we set aside the order of the L and circumstances of the case, we set aside the order of the L

Sajal Nema 11 ITA No.247/JAB/2022 PCIT passed u/s 263 of the Act and restore the passed u/s 263 of the Act and restore the assessment ord assessment order dated 9.12.2019 passed u/s 143(3) of the Act passed u/s 143(3) of the Act by the Assessing by the Assessing Officer.

In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.

SAJAL NEMA ,NARSINGHPUR vs. PRINCIPAL COMMISSIONER OF INCOME TAX 1 JABALPUR, JABALPUR