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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against the order of NFAC for the assessment year 2017-18 dated 28.8.2023. The assessee has raised following grounds:
1. The order of the ld. CIT(A) is opposed to the law, facts and circumstances of the case.
2. The order is passed in haste, without providing sufficient and reasonable opportunity of being heard, violating the principle of natural justice and is thus, liable to be quashed.
3. The ld. CIT(A) has erred in upholding the additions made in the assessment order without considering the submissions made by the appellant. The CIT(A) never called for any documents in any of the notices issued by him. However, in the appellate order, the CIT(A) has stated that the appellant has not submitted cash book, bank statements, sales details etc. These details were never called for.
4. The ld. CIT(A) ought to have passed speaking order rejecting submissions made by the appellant. The ld. CIT(A) erred in not M/s. Afrozkhan, Davanagere Page 2 of 5 discussing the submissions made by the appellant during the appellant proceedings.
5. The ld. CIT(A) ought to have appreciated the fact that the matter is duly covered by the judgement of the Hon’ble jurisdictional Bengaluru ITAT in the case of Ananthpur Kalpana reported in 138 Taxmann.com 141 (2022).
6. The ld. CIT(A) erred in not appreciating the fact that the cash deposits were made out of the sales receipts and closing cash balance as on 8.11.2016, as demonstrated during the assessment proceedings and submissions made to the Hon. CIT(A).
7. The ld. CIT(A) ought to have considered that the assessee has already admitted the sales as revenue receipt, and therefore, there is no case for making the addition u/s 69A or ta the same u/s 115BBE again. This view is also supported by the decision of the Hon’ble Delhi High Court in the case of Kailash Jewellery House and the Hon’ble Gujarat High Court in the case of Vishal Exports Overseas Ltd.
8. The ld. CIT(A) has erred in upholding the addition made u/s 69A r.w.s. 115BBE without considering the fact that the appellant has duly considered the said income in the return of income filed by including it in turnover of the appellant.
9. The ld. CIT(A) has erred in not appreciating the fact that the appellant is not having any other source of income, other than the business income which is offered in the return of income filed for the year under consideration.
10. The appellant craves leave to add, alter, substitute, and delete any or all the grounds of appeal urged above.
11. For the above and other grounds to be urged during the hearing of the appeal, the Appellant prays that the appeal be allowed in the grant of a refund.
Facts of the issue are that assessee has deposited a sum of Rs.25,61,761/- into his bank account with Karnataka Bank and Dena Bank (BOB) by using demonetized currency notes of Rs.500/- & Rs.1000/- during demonetization period from 11.11.2016 to 26.12.2016. According to the ld. AO, the assessee has not explained the nature and source of above deposit to assessee’s bank account. Same is treated as unexplained money u/s 69 r.w.s. 1156BBE of the M/s. Afrozkhan, Davanagere Page 3 of 5 Income-tax Act,1961 ['the Act' for short]. Against this assessee is in appeal before us. 2.1 Before the lower authorities, assessee has furnished the monthwise opening cash in hand/cash sales receipts/cash deposit in bank/cash withdrawals from bank/closing cash on hand from April, 2015 to 8th Nov’15, between 9th Nov’15 till 8th Nov’16 and also for financial year 2016-17. This statement was overlooked by the lower authorities and made additions sustained by the NFAC/CIT(A). Against this assessee is in appeal before us.
We have heard the rival submissions and perused the materials available on record. Similar issue came for consideration before this Tribunal in the case of Bhoopalam Marketing Services Pvt. Ltd. in dated 15.9.2022 wherein held as under: “7. We have carefully considered the rival contention and perused the orders of the lower authorities.
Admittedly the assessee has deposited Rs.298,08,080/- during the post- demonetization between 09/11/2016 and 30/12/2016. Therefore, Ld.AO made addition of INR 5,82,76,300/- as income of the assessee u/s. 68 of the income tax act, by passing assessment order u/s. 144 of the Act. The Ld.AO made such addition as the assessee could not file requisite details as the notice was issued to the email address that was not functional. In the interest of justice, we deem it proper to remand the issues back to the Ld.AO for a de novo verification. 7.1 We have carefully gone through the various standard operating procedures laid down by the central board of direct taxes issued from time to time in case of operation clean. The 1st of such instruction was issued on 21/02/2017 by instruction number 03/2017. The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II. These instructions gives a hint regarding what kind of investigation, enquiry, evidences that the assessing officer is required to take into consideration for the purpose of assessing such cases.
In one of such instructions dated 09/08/2019 speaks about the comparative analysis of cash deposits, cash sales, month wise cash sales and cash deposits. It also provides that whether in such cases the M/s. Afrozkhan, Davanagere Page 4 of 5 books of accounts have been rejected or not where substantial evidences of vide variation be found between these statistical analyses. Therefore, it is very important to note that whether the case of the assessee falls into statistical analysis, which suggests that there is a booking of sales, which is non-existent and thereby unaccounted money of the assessee in old currency notes (SBN) have been pumped into as unaccounted money. 8.1 The instruction dated 21/02/2017 that the assessing officer basic relevant information e.g. monthly sales summary, relevant stock register entries and bank statement to identify cases with preliminary suspicion of back dating of cash and is or fictitious sales. The instruction is also suggested some indicators for suspicion of back dating of cash else or fictitious sales where there is an abnormal jump in the cases during the period November to December 2016 as compared to earlier year. It also suggests that, abnormal jump in percentage of cash trails to on identifiable persons as compared to earlier histories will also give some indication for suspicion. Non- availability of stock or attempts to inflate stock by introducing fictitious purchases is also some indication for suspicion of fictitious sales. Transfer of deposit of cash to another account or entity, which is not in line with the earlier history. Therefore, it is important to examine whether the case of the assessee falls into any of the above parameters are not.”